American companies are suppressing wages for many workers
nytimes.com
nytimes.com
Corporate HR policies in the modern era are essentially designed to commodify and drive down the costs of labor through information assymetry, rigid pay bands, and lawsuit mitigation.
Since most labor no longer organizes to negotiate for themselves, obviously the “Industry standard” pay bands are going to have a strong dampening effect on any wage increases even in the case of a worker shortage. Most individuals alone don’t have the power or the information edge needed to beat an “industry standard” which has essentially been decided through collusion of the largest players in the market. See the direct email correspondence of Steve Jobs and Eric Schmidt for more info.
Workers have power, too. They can refuse the offer. If you're an employer and you want good people, you'll find out real quick about their power.
Not so good for the poor chumps working in retail who've been told that unions are bad.
Enter Scrum. One of the side effects: the more effective the process, the more replaceable and interchangeable the workers are. Granted, great for planning.
That by itself is a remarkable statistic. The original purpose of non-compete laws was to honor the value of an invention or trade secret and stopping key inventors from directly running away with an invention and thus lowering the incentive for innovation.
But surely not every fifth worker with a high school degree or less in the market is a researcher or crucially involved in the generation of trade secrets. Many people are simply selling their labour, and this data point suggests that non-competes are being abused to an extreme degree simply to chain employees to a business.
I also to opt-out of Rapiscans and get pat-downs at the airport to stand up for my 'liberties'. After feeling violated after the recent 'enhanced' one where some dude rubbed every part of my bait and tackle for 2-3 min I decided to give up that fight to. No money though.
Modern America, eh?
Sorry about the sarcasm, but this kind of abuse of the contract system needs to be stopped. You can only really invalidate an individual contract (ianal) as I understand it. So the fight would have to happen for _every employee_. While case law makes it cheaper, the reality is most of these folks can't afford to higher a lawyer for a few hours, let alone a few days.
This is a huge incentive behind how our system has become so broken.
How common is this? As a child, my father changed jobs every few years, and we moved often as a result of that (until I was 10 at least). We even lived in France for three years because my dad thought it would be a good opportunity to learn about other cultures. So personally, I've never had any objection to moving for the best opportunity.
My wife on the other hand comes from a different background; she grew up in the same house in a rural town and thinks that moving hurts children's ability to develop friendships. She also believes that being close to family is more important than optimizing your career (although she has kindly agreed to move should a good opportunity arise).
Is the "stay in one spot" viewpoint becoming more common? I can see how this would lead to competitive job offers stagnating in a region if no one is willing to move into it or away from it.
It's the biggest reason people hate gentrification as well, they can quickly get priced out of an area they belong to.
If that is accurate, it makes sense that unemployment is down and still going down but wages aren't moving at all or as quickly. There's effectively "spare capacity" in the system in the form of people who were removed from the unemployment numbers but still wanted to work.
In many industries the reason employers have monopsopy power is regulations that prevents new players from eating the fat profit margins of incumbent players.
telecom, healthcare, real estate, legal services ......
Just like coders see every problem as a software problem - lawmakers tend to think any problem can be solved with more laws ! not realizing they are also playing the economic game theory charade.
In this case particularly, introducing more laws is going to make is harder for new players from gaining market share.
I am not also just making this up, France has some of the most progressive labor laws written with the best of intentions - but lawmakers failed to see the economical ramification of their laws. It made employers reluctant to hire full time workers - creating a painfully high unemployment rate.
A lot of American multinationals also have most of their growth happening outside US borders, I think stronger Unions and ill thought out reform is going to result in more aggresive offshoring.
I know supply side economic arguments has gone out of fashion - but by allowing entrepreneurs to more easily embrace globalization the same way as larger companies exploit it will more comfortably increase income without causing massive spikes in inflation.
This also includes less regulation so that workers can strike without legal trouble and cause trouble for employers, by dragging the process through the court system will just mean more money for lawyers - and large companies have deep pockets anyway to fight any potential lawsuit. Think about how things like fraud are already illegal but companies seem to get away with it anyway.
The only power labor has to collective withdraw it - which painfully show up in the balance sheet in every board room, its the only language capital understands.
In fact, all those changes reduce friction and increase competition in the labor market. These should be precisely the kind of changes I would think you would support?
And KFC would include a question on their hiring form "Are you subject to a non-compete clause?" to cover their asses. If he answers yes, he is immediately disqualified and KFC moves to the next candidate. After all, it's not like he has unique knowledge for which it is worth getting sued over, unlike Lewandowski. If he answers no and it is ever discovered he had lied, he is immediately fired.
- Warren is interested in introducing laws.
- I do not agree regarding M and A - so what if companies want to combine capital ? If Labor can also combine more freely then I do not see the problem.
Who decides what is the correct size of a company ?
We just need to get the union-busting right-to-work laws off the books, and let the free market sort things out.
Right to work laws are a restriction of free, voluntary contracts between employers, and their employees. They forbid employees from demanding to be a sole supplier of labor for an employer, and from negotiating special, union-only employee agreements.
It's absurd that someone selling cabbages to a grocery store is allowed to enter into a mutually voluntary contract that makes them the sole supplier of leafy greens for that grocery, but the people working for that store are not allowed to enter into a mutually voluntary contract that makes them the sole supplier of labor for that store.
Given the vicious opposition of business leaders against the freedom of workers to enter into meaningful collective bargaining agreements, it's clear that they are not actually interested in free markets.
You mentioned letting the free market sort things out. That is exactly what Right to work laws do. They let two independent people make an employment agreement without anything interfering with them. If the union was good and worthwhile, the employees would join. If the unions were good then employees who were not part of the union would be paid less and get less benefits. If that is not the case then that union is not a good one and should not force workers to join it.
That employer already entered a contract with another group of people, that lists them as a sole supplier of labour for said employer.
Imagine if I had a cabbage farm. I don't care about corporate politics, I just want Whole Foods to buy cabbages from me.
But they won't. They already have an exclusive supplier contract for cabbages with Dole, or Sunrise Produce, or whatever.
Is this unfair? I don't like it? That's my problem. I should not be demanding that there be a law that forbids sole suppliers, of cabbages, or labour.
If I still want to sell cabbages, I should talk to Dole, Sunrise Produce, or start my own grocery store. Or negotiate a new contract with Whole Foods, after their current contract expires.
Providing services to an organization isn't a god-given right. If you don't like the working environment, the requirements of the job, the pay, or the hoops you have to jump through to sell to a company, that's your problem. Go work for a non-union shop, or start your own company.
> They let two independent people make an employment agreement without anything interfering with them.
If one of those two people entered into an agreement with a third party, that lists the third party as a sole supplier of services for them, that's your problem. The law should allow that person to make such an agreement with said third party, to the detriment of you.
That's the libertarian response. They are bad because they stop people from entering into voluntary contracts.
The socialist argument is that they are bad because employment negotiation is not done on a person-to person level. It is done on an organization to person level. The organization has more power, and this power imbalance produces unfair contracts.
This imbalance is solved when you allow employees to negotiate as an organization. Right to work laws let scabs and freeloaders parasitically leech off the negotiations of others, without paying into the system that benefits them. The only way to deal with that is to exclude them.
If you are correct then I can see why right to work laws are not so good. However, keep in mind that there are many laws preventing people from entering certain contracts. Such as laws forbidding a person to work at a company if the company doesn't want to pay minimum wage, or offering to give someone some money but requiring that they pay back a large amount in a set amount of time.
1. Make it illegal to have an exclusivity contract.
2. Make every concession that a union gets out of their employer apply to non-union employees. [1]
This would be like Dole getting a special deal with Whole Foods... And a "Right-to-sell" law would mandate that the terms of that agreement would also apply to me - even though I was not a party to those negotiations.
> I was under the impression that a majority of the workers of a company can unionise and then require every other worker in the company to join the union.
That would be the case in a truly free market, if the employer entered into an agreement with the union that going forward, it would only employ union people. The employer's not compelled to do that - it does so by choice.
> If you are correct then I can see why right to work laws are not so good. However, keep in mind that there are many laws preventing people from entering certain contracts. Such as laws forbidding a person to work at a company if the company doesn't want to pay minimum wage, or offering to give someone some money but requiring that they pay back a large amount in a set amount of time.
I agree. You have rights, some of which you can't sign away - for instance, it would be illegal to discriminate against someone based on race, despite the existence of a contract to the contrary. Contracts aren't entirely absolute, and this gets complicated quickly. There's also questions of monopolies, which libertarians generally do not oppose, but other people do.
[1] The obvious consequence is that the game-theory optimal strategy for everyone is to not join a union.
https://www.flra.gov/exclusive_representation
http://www.hr.ucdavis.edu/elr/lr/collective-bargaining/ee_re...
The tl;dr of it is that if 50% + 1 of a workforce unionizes, the union bargains collectively for everyone. Even for free-loaders who don't pay union dues.
This is like being able to opt out of paying taxes, while still receiving all government benefits. If that were legal, then our public services would collapse by next week.
"Because most people sink roots in their communities, they are reluctant to quit their job and move to a job that is far away."
The effect of this is a wash because this is also a problem for employers too. The supply of good workers is smaller because few people are willing to move towns for one - which drives labor prices up.
"Unions used to offset employer monopsony power"
Ahh, okay, now im understanding the point of this article. Lets fight monopolies with more monopolies instead of solving the underlying issues!
I agree with the points about non-competes though.
So you don't think unions have a place in modern day society?
What is the difference between a bunch of carpenters unionizing their wages versus a bunch of small and large companies all agreeing to price-fix their products? Nothing.
When employers band together to bargain collectively, we call it a “company” and it’s not only accepted, it’s so entrenched in our culture that we can barely conceive of any other way. When employees do the exact same thing, we attack them relentlessly.
Imagine if there were 10 different smartphone suppliers but all the suppliers agreed that they were only going to let you buy from 1 of them - company X. Company X would just charge you whatever the hell they felt like because you would have no other options. It would fricken suck. It would feel the exact same as a monopoly.
Now compare this to a union. Company Y's employees are all unionized and the union forbids company Y from buying labor from anyone but them. Even if it's not forbidden , new hires are typically glad to join the union too, and in some cases the law forbids otherwise. See how similar that is? It's still a monopoly - just a monopoly against a single buyer.
This is also wrong. Your straw man union isn't true across the board.
A union is by default an organization of employees to bargain together. Anything beyond that is extra.
I'm okay with unions as long as they don't engage in monopolistic behavior - I haven't found one of those yet though. For one, if unions didn't forbid company X from who they can hire from, and were okay with company X hiring pilots from any of the 10 pilots unions concurrently, then that would often be okay. Right to work laws are a super important step towards this.
Even with that step, union-monopolies and inter-union-collusion would still sometimes be a problem just like it is with companies, and that must be stamped out.
When Alice is a hiring manager and her organization is a company, we call this “how hiring is done thousands of times every day in this country.” When Alice is a worker and her organization is a union, you call it “price fixing” and “colluding.” Why the difference?
1. Unions are not often a counter balance. They are usually just additional monopolies[0] where there was none before. The airline industry is incredibly competitive but yet airline pilots still decided to unionize and price-fix.
2. Monopolies should be fought with regulations targeted at increasing competition and lowering barriers to entry - not with more monopolies. Fighting a monopoly with another monopoly just hurts the consumer and hurts our country in the global economy.
3. unions have congressmen "on payroll" too. In fact in some states some industries have state laws that forbid people from working outside of the union. Only 27 states have right to work laws.
[0] Per-company unions are the easiest monopolies to create because the scale of them is much smaller than the scale of the whole industry. Its very easy to get all your coworkers at company X to unionize and forbid company X from hiring elsewhere - and often new hires are happy to join the union too. But its very difficult for your company X to achieve a monopoly itself because it has to dominate an often much larger global market. For an example, see here: https://news.ycombinator.com/item?id=16489013
Nobody said that unions form only when the employer is a monopoly...I'm not sure what "point" you're trying to make here.
Nobody said they were...
If a firm profits, it follows that it has paid its workers wages less than the value their labor has generated. Collective action through a union brings wages closer and closer to the true value of their labor.
Both of these situations limit the extent to which an ownership class, engaged in no productive labor itself, can siphon off the value that real work produces.
Captive markets and "right to work" shops likewise both afford this class the liberty of being as parasitic as it wishes.
five programmersworking well together together is more valuable than five programmers working independently.
you're also forgetting that companies have a lot of capital investments as well such as buildings and manufacturing plants.
there alot of reasons a company should profit while still paying their employees of the value of their work
If an opposing force of similar power is not the best strategy, what do you propose as an alternative?
There are people here who are fatalistic and think that politics is unwinnable and politicians are in people's pockets, but laws can take away unions' power too, so I don't see politics as avoidable in any case.
I think framing a union as a monopoly is odd, but they become institutions in their own right, and theirs interests diverge from the wider group's fairly quickly.
The UPS union seems to want to force UPS to not invest in drones or self-driving trucks at the expense of everyone who would benefit from significantly cheaper delivery, and this isn't exactly an isolated incident.
The construction unions in NYC have secured themselves a deal where the government must use union labor, and unions negotiate a contract with their employers, who have no incentives to keep costs down because they pass all these costs on, and we get subways that are 10 times more expensive than anywhere else in the world.
We have a similar situation with construction unions & housing in NYC leading to increased costs and .: more expensive housing for everyone in NYC.
And the list goes on forever.
The trick about laws is that they are only as strong as their enforcement. The larger an organization is, relative to the enforcer, the easier the laws are to game.
Why do you say it's a wash? They may not need "good" workers and instead only need enough workers. The attraction to "good" workers is not sufficient to drive wages up.
It’s amazing to me that the solution presented by those who are anti laissez faire are more laws to correct the past laws.
Market transactions only happen if they are mutually beneficial. Can’t force any side as this will distort it.
Please look at the supreme labor laws found in Europe to find out what happens. To note, the Spanish, French, Italians face chronic young adult unemployment with roughly 1/4 people being employed.
I think the modern assumption is that things are distorted, and they are heavily distorted in favor of business...