6 ms·

In our society it is very difficult (though not entirely impossible) to survive without money. If you are not in a position to withhold your labour, because you

by mrow84 13y ago

In our society it is very difficult (though not entirely impossible) to survive without money. If you are not in a position to withhold your labour, because you have no money, then you have no bargaining power when determining your wages. In this case, a prospective employer can essentially offer you any wage they like - will that be a truly "voluntary" contract, even though you have no choice other than to accept it? Simplistic solutions like "just move elsewhere" ignore both the inherent difficulties that moving poses when you are living in poverty, and the situations encountered by many people who take that option. As a new arrival you face the prospect of high initial costs trying to find a place to live and trying to find work, on top of the living costs you would have faced anyway, coupled to the fact that you are likely to have a reduced support network to help you deal with any problems you might face, and help you get on your feet. This is all after the initial expense of actually moving. You asked your parent for a proposed solution, mine is simply for Amazon to more equitably distribute revenue within the company, to spend more on low-level wages, less on high-level wages, and less on other projects if there is a shortfall. In general I suspect that some kind of employee ownership goes quite far to alleviating many problems of this nature. As a footnote, the only sense in which a market exchange is voluntary is that all parties agreed to it, which follows from the definition, and is therefore useless: "market exchange" will suffice. It is simply a disingenuous attempt to make the idea of a market exchange sound more humane, and to suggest an absence of coercion, without ever providing evidence that this is the case.

Artistry121 13y ago
To your first paragraph your point only holds if there is absolutely no competition for workers (which may be the case). And yes, it still is voluntary. I once bought a phone off craigslist. It was a decent phone, worth probably $50 but I got it for $35 because the seller needed cash right away. Just because he was illiquid does not mean it was wrong of me to buy the phone from him. Or was that immoral of me and should I have been required to give him $50? I agree moving is difficult - but so is creating efficiencies like Bezos has done. If your social views include the view that life should be easy for everyone, no matter their contribution, then we have a fundamental difference in what is realistic. If that is your view though maybe a better solution would be for those with money who share your view to support those without jobs or working with Amazon (or pay them to not work for Amazon). It is very easy to ask Amazon to change their policies, but that's because it isn't your money. (It's also worth noting that Amazon is not even profitable and runs in incredibly competitive industries. And, for every dollar they have to raise in costs they need to raise in profits.) Your solution might work but has some concerns. Although the market for unskilled work is very heavily weighted towards companies the market for skilled leadership is very competitive. There is a reason top executives at Apple, Google and Amazon are paid well. Paying 10,000 workers $1 an hour more means $20,000,000 less yearly to spend on upper level talent in a highly competitive marketplace for that talent. I am pointing out the human respecting nature of the market exchange - that it respects human choice (no matter how bad or good an individuals choice may be) rather than implying the idea that someone else knows what is best. Coercion is "the practice of persuading someone to do something by using force or threats". I have never heard a story of Amazon threatening someone to work for them or using physical force to entice them to take a job. Taxes, military drafts and certain types of crime are coercion - posting on a job board is not.
- DerpDerpDerp 13y ago
  > It was a decent phone, worth probably $50 but I got it for $35 because the seller needed cash right away. Just because he was illiquid does not mean it was wrong of me to buy the phone from him. Or was that immoral of me and should I have been required to give him $50? I was coercive of you: you used the fact that he essentially had no bargaining power to extract value in your favor. Whether or not you want to call that immoral is your business. > I have never heard a story of Amazon threatening someone to work for them or using physical force to entice them to take a job Amazon makes job offers which wouldn't be accepted without coercion, and uses the fact that benefits from social programs will be cut if the person uses the job to co-opt government coercion. They effectively threaten your current social program income to get you to accept a job you otherwise wouldn't. Is that entirely Amazon's fault? No. Is Amazon using a messed up government policy to coerce people to take jobs they otherwise wouldn't? Yes.
- massysett 13y ago
  > There is a reason top executives at Apple, Google and Amazon are paid well. Because they're friends with the board of directors which sets their salaries, which are paid for not out of the directors' pockets but from shareholder profits? Or maybe it's because the board wants the company to look like it's in the big leagues, and gee whiz, we're not in the big leagues unless we pay like we are, regardless of how the executives actually perform. http://www.slate.com/articles/business/the_dismal_science/2009/05/comparison_shopping.html http://www.slate.com/articles/business/the_dismal_science/20...
  - ahomescu1 13y ago
    Are Google executives paid well? Last time I heard about it, they received $1/year salary, and tons of company stock. That ties their income directly with company performance (through stock price).
    - mikeyouse 13y ago
      Larry & Sergey - $1 Eric Schmidt - $7,628,620 Patrick Pichette - $38,741,100 Nikesh Arora - $51,145,900 David Drummond - $31,301,900 http://www.reuters.com/finance/stocks/companyOfficers?symbol=GOOG.O http://www.reuters.com/finance/stocks/companyOfficers?symbol...
Houshalter 13y ago
>In this case, a prospective employer can essentially offer you any wage they like - will that be a truly "voluntary" contract, even though you have no choice other than to accept it? "Bargaining power" is misleading because that is not how a market works. It's not two party's haggling over what they think a "fair price" is, it's a lot of parties and prices tend towards supply and demand. Unlike the bargaining model, supply and demand still works even if one party doesn't have a choice. For example, you have no choice but to buy food. But farmers can't force you to pay extreme prices because you have no choice. They have to compete amongst each other and the price of food falls towards what it costs to produce. Messing with the supply and demand price can create problems like unemployment. It's too expensive to hire new workers at the minimum wage, or there is a much higher incentive to outsource and automate work, or just not do it at all. To continue the food analogy, if you set a maximum food price, farmers would just stop producing if it cost more than the maximum price.
- mrow84 13y ago
  Your argument seems compelling, but there are several problems I find with it. The first is that it rests on the usual assumptions of a competitive market, and we are discussing situations where this isn't the case: people are looking for work where there is none, or very little - there is no competition for their labour. The second problem is that your analogy is imperfect, because it switches round to the demand side rather than the supply side. A better analogy, I think, would be if you were a farmer who had produced a sufficient supply of food, but you had to sell it because it was going to spoil. In this case buyers, assuming that they don't strictly need your food, could apply pressure to you to lower your price fairly indiscriminately. This is a much better analogy to the original case: companies (often, and in the case we are talking about) don't need your labour, they will simply be less productive without it, but you do need a wage, or you will starve to death.
  - Houshalter 13y ago
    >The first is that it rests on the usual assumptions of a competitive market, and we are discussing situations where this isn't the case: people are looking for work where there is none, or very little - there is no competition for their labour. And this is the root of the problem I am trying to get at. The demand for labor is pretty low. Blaming the few companies that are hiring workers isn't fair, and forcing them to raise wages doesn't fix the problem. >The second problem is that your analogy is imperfect, because it switches round to the demand side rather than the supply side. I think that people thinking of supply and demand sides separately is where a lot of people get confused, especially when discussing labor markets. There really isn't any difference and the same economic principles apply to both sides. >companies (often, and in the case we are talking about) don't need your labour, they will simply be less productive without it, but you do need a wage, or you will starve to death. Another good point and what I am trying to get at. The problem I think is that people depend on the value of their labor for their income. That's hardly fair to begin with (some people are simply worth more economically than others), but it's especially problematic if some people's labor becomes almost worthless due to automation or whatever. A basic income would be an ideal solution.

by mrow84 13y ago

Artistry121 13y ago

To your first paragraph your point only holds if there is absolutely no competition for workers (which may be the case). And yes, it still is voluntary. I once bought a phone off craigslist. It was a decent phone, worth probably $50 but I got it for $35 because the seller needed cash right away. Just because he was illiquid does not mean it was wrong of me to buy the phone from him. Or was that immoral of me and should I have been required to give him $50? I agree moving is difficult - but so is creating efficiencies like Bezos has done. If your social views include the view that life should be easy for everyone, no matter their contribution, then we have a fundamental difference in what is realistic. If that is your view though maybe a better solution would be for those with money who share your view to support those without jobs or working with Amazon (or pay them to not work for Amazon). It is very easy to ask Amazon to change their policies, but that's because it isn't your money. (It's also worth noting that Amazon is not even profitable and runs in incredibly competitive industries. And, for every dollar they have to raise in costs they need to raise in profits.) Your solution might work but has some concerns. Although the market for unskilled work is very heavily weighted towards companies the market for skilled leadership is very competitive. There is a reason top executives at Apple, Google and Amazon are paid well. Paying 10,000 workers $1 an hour more means $20,000,000 less yearly to spend on upper level talent in a highly competitive marketplace for that talent. I am pointing out the human respecting nature of the market exchange - that it respects human choice (no matter how bad or good an individuals choice may be) rather than implying the idea that someone else knows what is best. Coercion is "the practice of persuading someone to do something by using force or threats". I have never heard a story of Amazon threatening someone to work for them or using physical force to entice them to take a job. Taxes, military drafts and certain types of crime are coercion - posting on a job board is not.

DerpDerpDerp 13y ago
> It was a decent phone, worth probably $50 but I got it for $35 because the seller needed cash right away. Just because he was illiquid does not mean it was wrong of me to buy the phone from him. Or was that immoral of me and should I have been required to give him $50? I was coercive of you: you used the fact that he essentially had no bargaining power to extract value in your favor. Whether or not you want to call that immoral is your business. > I have never heard a story of Amazon threatening someone to work for them or using physical force to entice them to take a job Amazon makes job offers which wouldn't be accepted without coercion, and uses the fact that benefits from social programs will be cut if the person uses the job to co-opt government coercion. They effectively threaten your current social program income to get you to accept a job you otherwise wouldn't. Is that entirely Amazon's fault? No. Is Amazon using a messed up government policy to coerce people to take jobs they otherwise wouldn't? Yes.
massysett 13y ago
> There is a reason top executives at Apple, Google and Amazon are paid well. Because they're friends with the board of directors which sets their salaries, which are paid for not out of the directors' pockets but from shareholder profits? Or maybe it's because the board wants the company to look like it's in the big leagues, and gee whiz, we're not in the big leagues unless we pay like we are, regardless of how the executives actually perform. http://www.slate.com/articles/business/the_dismal_science/2009/05/comparison_shopping.html http://www.slate.com/articles/business/the_dismal_science/20...
- ahomescu1 13y ago
  Are Google executives paid well? Last time I heard about it, they received $1/year salary, and tons of company stock. That ties their income directly with company performance (through stock price).
  - mikeyouse 13y ago
    Larry & Sergey - $1 Eric Schmidt - $7,628,620 Patrick Pichette - $38,741,100 Nikesh Arora - $51,145,900 David Drummond - $31,301,900 http://www.reuters.com/finance/stocks/companyOfficers?symbol=GOOG.O http://www.reuters.com/finance/stocks/companyOfficers?symbol...

Houshalter 13y ago

>In this case, a prospective employer can essentially offer you any wage they like - will that be a truly "voluntary" contract, even though you have no choice other than to accept it? "Bargaining power" is misleading because that is not how a market works. It's not two party's haggling over what they think a "fair price" is, it's a lot of parties and prices tend towards supply and demand. Unlike the bargaining model, supply and demand still works even if one party doesn't have a choice. For example, you have no choice but to buy food. But farmers can't force you to pay extreme prices because you have no choice. They have to compete amongst each other and the price of food falls towards what it costs to produce. Messing with the supply and demand price can create problems like unemployment. It's too expensive to hire new workers at the minimum wage, or there is a much higher incentive to outsource and automate work, or just not do it at all. To continue the food analogy, if you set a maximum food price, farmers would just stop producing if it cost more than the maximum price.

mrow84 13y ago
Your argument seems compelling, but there are several problems I find with it. The first is that it rests on the usual assumptions of a competitive market, and we are discussing situations where this isn't the case: people are looking for work where there is none, or very little - there is no competition for their labour. The second problem is that your analogy is imperfect, because it switches round to the demand side rather than the supply side. A better analogy, I think, would be if you were a farmer who had produced a sufficient supply of food, but you had to sell it because it was going to spoil. In this case buyers, assuming that they don't strictly need your food, could apply pressure to you to lower your price fairly indiscriminately. This is a much better analogy to the original case: companies (often, and in the case we are talking about) don't need your labour, they will simply be less productive without it, but you do need a wage, or you will starve to death.
- Houshalter 13y ago
  >The first is that it rests on the usual assumptions of a competitive market, and we are discussing situations where this isn't the case: people are looking for work where there is none, or very little - there is no competition for their labour. And this is the root of the problem I am trying to get at. The demand for labor is pretty low. Blaming the few companies that are hiring workers isn't fair, and forcing them to raise wages doesn't fix the problem. >The second problem is that your analogy is imperfect, because it switches round to the demand side rather than the supply side. I think that people thinking of supply and demand sides separately is where a lot of people get confused, especially when discussing labor markets. There really isn't any difference and the same economic principles apply to both sides. >companies (often, and in the case we are talking about) don't need your labour, they will simply be less productive without it, but you do need a wage, or you will starve to death. Another good point and what I am trying to get at. The problem I think is that people depend on the value of their labor for their income. That's hardly fair to begin with (some people are simply worth more economically than others), but it's especially problematic if some people's labor becomes almost worthless due to automation or whatever. A basic income would be an ideal solution.