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Could you explain all this again, or link me to an explanation that goes over all this from start to finish? Because I'm still scratching my head. You say that

by Meekro 12y ago

Could you explain all this again, or link me to an explanation that goes over all this from start to finish? Because I'm still scratching my head. You say that a company that pays me what the market says I'm worth, is "exploitative." Your coop won't exploit me, and results in me earning less. So why are they the exploiters again, and not you?

TaylorAlexander 12y ago
Actually if a normal company is to make a profit off of you, you will get paid less than what you are worth to them. There are some market forces at play that determine typical worker's pay, but they aren't really tied to what you are worth and are instead the smallest fraction of your worth the company can get away with based on what other companies offer. Because of the nature of profit seeking companies, this fraction is always dropping in a healthy market. WalMart workers, for example, are not paid what they are "worth" or the company would make zero profit on their labor. It is a frustrating misconception that workers in a capitalist market get paid what they are worth. In a coop, many people will get paid more than they would otherwise, as no one gets paid starvation wages unlike most companies in the US. Highly productive workers may get paid less in a coop than in a typically arranged company however because typical companies exploit the workers at the very bottom in order to reserve more money for those at the top. It is possible for highly technical workers to get paid more in a coop though. Apple's latest profits were something like $750k per worker per quarter (this includes apple store employees), though clearly they are exceptional. If a coop does very well, they could easily provide more money to all workers than the typical pay of a highly successful company. A coop that makes a lot of money can also contract out some work to coops that make less money, thereby taking advantage of cheaper labor without relying on exploitation of workers. A coop that ships boxes will earn less per worker than a coop that designs robots, but such a system is generally more fair to workers. So some people may get paid less than normal but most would get paid more. Traditional companies can afford to pay more to those at the top by exploiting those at the bottom. This does not happen in a coop.
- Meekro 12y ago
  I don't think it's a misconception that workers get paid what they are worth. In a capitalist system, something is only "worth" as much as someone is willing to pay for it. Few people question this notion when we're talking about the price of gold or stock market shares, but it's true of labor as well. From what I understand, Marx's definition of exploitation involves companies paying some workers less than what the fruits of their labor are worth. For example, McDonalds might pay an employee $9 an hour while getting $12 an hour in revenue from that employee's work. But, it sounds to me like your coop would be guilty of the same thing. To take an extreme example, suppose your coop includes a janitor and a heart surgeon. Both used to work as independent contractors and bill for their time to whoever needed work done, and now your coop sends the bills and takes in the money. Before joining your coop, the janitor was making $8.50 an hour and the surgeon, $500 an hour. The coop now pulls in $508.50 an hour and gets to decide how to distribute it. I gather from your comments that you find income inequality and starvation wages to be undesirable things. Therefore, you equalize things somewhat and give the janitor $20 an hour and the surgeon $488.50. Now, haven't you committed the same sin as the exploitative companies, namely paying an individual less than the fruits of their labor have produced?
  - TaylorAlexander 12y ago
    Well in basically all cases the worker can't be paid exactly as much as they produce because some of that money must be used to pay for other business costs. However in a market with excess labor, workers can get paid a very small fraction of the value they produce, keeping large sums of profit for those at the top. In a coop the workers simply won't allow this, and more reasonable pay rates can be determined. According to another commenter, many coops operate with some kind of market rate pay scale and place limits on the ratio of highest pay to lowest pay. This prevents one CEO from gobbling up half of the money used to pay workers and leaves more money to pay those at the bottom. So you are correct that in all cases workers are paid less than the value of what they produce, but in a worker-run coop the ratio of pay to value can be much higher than in a typical business. As far as workers getting paid what they are "worth", I think you are missing something. Yes, workers are only worth what someone is willing to pay for them. However I don't think workers get paid the maximum a company is willing to pay, especially in a market with excess labor. A company may be "willing" to pay programmers $180k per year before their business model fails, but due to a good supply of desperate people they may only need to pay people $80k per year. So in that situation the workers are getting paid much less than they are worth. Would you agree that workers typically do not get paid the maximum the company would be willing to pay but instead get paid the minimum the market will bear?
poikniok 12y ago
I agree with you entirely. Honestly I have to think that people with this logic don't truly believe it, the cognitive dissonance would be too high. Rather they are trying to exploit naive workers who have an idealistic understanding of the world. Meanwhile you and I will continue to be paid fairly by so called "exploitative" companies.
- TaylorAlexander 12y ago
  I hope you will read my comment adjacent to yours, rather than simply assure yourself that what you already believe is correct. You can theorize that I simply don't understand, but I offer an explanation for why this is the case in my other comment. Simply put, most workers would get paid more than they typically would, but the workers at the very top may get paid less. This would be true in any scheme that seeks to balance out the pay of those at the top, since there would no longer be huge sums of money from the exploitation of those at the bottom. If you don't believe exploitation exists, I urge you to look into the state of capitalism in the 1850's when Karl Marx was forming his opinions and compare that to the state of WalMart workers today. Exploitation is a default component of capitalism and is not simply some imagined issue made up by those who wish for a more egalitarian society. And apparently other commenters have mentioned that coops can have the same kind of pay structures as normal companies. For example someone noted that one company limits the pay to the CEO to 75x the lowest worker's pay, and he currently sits at just 60x. This is closer to pay differences we saw in the US in the 1960's. But certainly when you pay the people at the bottom a fair wage, there may be less cash to throw around at the top. This is not a design flaw.

by Meekro 12y ago

TaylorAlexander 12y ago

Actually if a normal company is to make a profit off of you, you will get paid less than what you are worth to them. There are some market forces at play that determine typical worker's pay, but they aren't really tied to what you are worth and are instead the smallest fraction of your worth the company can get away with based on what other companies offer. Because of the nature of profit seeking companies, this fraction is always dropping in a healthy market. WalMart workers, for example, are not paid what they are "worth" or the company would make zero profit on their labor. It is a frustrating misconception that workers in a capitalist market get paid what they are worth. In a coop, many people will get paid more than they would otherwise, as no one gets paid starvation wages unlike most companies in the US. Highly productive workers may get paid less in a coop than in a typically arranged company however because typical companies exploit the workers at the very bottom in order to reserve more money for those at the top. It is possible for highly technical workers to get paid more in a coop though. Apple's latest profits were something like $750k per worker per quarter (this includes apple store employees), though clearly they are exceptional. If a coop does very well, they could easily provide more money to all workers than the typical pay of a highly successful company. A coop that makes a lot of money can also contract out some work to coops that make less money, thereby taking advantage of cheaper labor without relying on exploitation of workers. A coop that ships boxes will earn less per worker than a coop that designs robots, but such a system is generally more fair to workers. So some people may get paid less than normal but most would get paid more. Traditional companies can afford to pay more to those at the top by exploiting those at the bottom. This does not happen in a coop.

Meekro 12y ago
I don't think it's a misconception that workers get paid what they are worth. In a capitalist system, something is only "worth" as much as someone is willing to pay for it. Few people question this notion when we're talking about the price of gold or stock market shares, but it's true of labor as well. From what I understand, Marx's definition of exploitation involves companies paying some workers less than what the fruits of their labor are worth. For example, McDonalds might pay an employee $9 an hour while getting $12 an hour in revenue from that employee's work. But, it sounds to me like your coop would be guilty of the same thing. To take an extreme example, suppose your coop includes a janitor and a heart surgeon. Both used to work as independent contractors and bill for their time to whoever needed work done, and now your coop sends the bills and takes in the money. Before joining your coop, the janitor was making $8.50 an hour and the surgeon, $500 an hour. The coop now pulls in $508.50 an hour and gets to decide how to distribute it. I gather from your comments that you find income inequality and starvation wages to be undesirable things. Therefore, you equalize things somewhat and give the janitor $20 an hour and the surgeon $488.50. Now, haven't you committed the same sin as the exploitative companies, namely paying an individual less than the fruits of their labor have produced?
- TaylorAlexander 12y ago
  Well in basically all cases the worker can't be paid exactly as much as they produce because some of that money must be used to pay for other business costs. However in a market with excess labor, workers can get paid a very small fraction of the value they produce, keeping large sums of profit for those at the top. In a coop the workers simply won't allow this, and more reasonable pay rates can be determined. According to another commenter, many coops operate with some kind of market rate pay scale and place limits on the ratio of highest pay to lowest pay. This prevents one CEO from gobbling up half of the money used to pay workers and leaves more money to pay those at the bottom. So you are correct that in all cases workers are paid less than the value of what they produce, but in a worker-run coop the ratio of pay to value can be much higher than in a typical business. As far as workers getting paid what they are "worth", I think you are missing something. Yes, workers are only worth what someone is willing to pay for them. However I don't think workers get paid the maximum a company is willing to pay, especially in a market with excess labor. A company may be "willing" to pay programmers $180k per year before their business model fails, but due to a good supply of desperate people they may only need to pay people $80k per year. So in that situation the workers are getting paid much less than they are worth. Would you agree that workers typically do not get paid the maximum the company would be willing to pay but instead get paid the minimum the market will bear?

poikniok 12y ago

I agree with you entirely. Honestly I have to think that people with this logic don't truly believe it, the cognitive dissonance would be too high. Rather they are trying to exploit naive workers who have an idealistic understanding of the world. Meanwhile you and I will continue to be paid fairly by so called "exploitative" companies.

TaylorAlexander 12y ago
I hope you will read my comment adjacent to yours, rather than simply assure yourself that what you already believe is correct. You can theorize that I simply don't understand, but I offer an explanation for why this is the case in my other comment. Simply put, most workers would get paid more than they typically would, but the workers at the very top may get paid less. This would be true in any scheme that seeks to balance out the pay of those at the top, since there would no longer be huge sums of money from the exploitation of those at the bottom. If you don't believe exploitation exists, I urge you to look into the state of capitalism in the 1850's when Karl Marx was forming his opinions and compare that to the state of WalMart workers today. Exploitation is a default component of capitalism and is not simply some imagined issue made up by those who wish for a more egalitarian society. And apparently other commenters have mentioned that coops can have the same kind of pay structures as normal companies. For example someone noted that one company limits the pay to the CEO to 75x the lowest worker's pay, and he currently sits at just 60x. This is closer to pay differences we saw in the US in the 1960's. But certainly when you pay the people at the bottom a fair wage, there may be less cash to throw around at the top. This is not a design flaw.