Hacker News Reader

By being able to influence legislators.

Just one example is public beach access. All over the us, many wealthy people buy up large beachfront mansion properties (but not the public beach nearby). But somehow there ends up being lawsuits because construction (and sometimes private guards) will close off what was previously publically accessible beach areas. It's a symbolic version of what is happening for the wealthy in many other areas - in particular the political process where dollars speak in decisions stronger than voters.

History has many examples, but outside of the illegal (see SV salary collusion case), there are many head games that are played. A common tactic is to make the employee feel insecure. For example, say that you're looking at efficiency improvements and considering going overseas to tamp down any chances people expect a raise. Get employees to feel guilty for not working harder, etc, etc...

A business's profit is the excess value created by workers. Low-skill workers don't get the true value of their labor because they have no negotiating leverage in many cases (especially with the downturn in union strength in the US). It's not a symmetric negotiation, as it's easy for the big and powerful company to find other employees, because in many cases the workers' only alternative to being underpaid is being unemployed and homeless. Business owners exploit the basic human need for food and shelter to underpay low-skill workers.

No one who is employed is paid "the true value of their labor". Every exchange, whether it's dollars for a good or dollars for labor, happens because of the subjective value the exchange provides to the exchangers.

>Business owners exploit the basic human need for food and shelter to underpay low-skill workers.

You could equally (and wrongly) say that workers exploit businesses basic need for labor. It's economic nonsense.

You're equating a business's "needs" with the human need to eat.

No, I'm equating one statement of economic nonsense with another statement of economic nonsense. It was a reductio ad absurdum. Unless there are severe external market constraints pushing down the demand of labor, an employer would never be able to "exploit the basic human need for food and shelter".

Here might be one current example. Are the first two articles related to the third one?

https://en.wikipedia.org/wiki/Wilbur_Ross#Investments https://www.forbes.com/sites/michelatindera/2017/01/18/how-w...

https://www.cnbc.com/2018/03/02/wilbur-ross-tariffs-are-nbd-...

If you are a holder of a Consumer Staples ETF (which holds Campbell Soup stock) in a retirement fund, is Wilbur Ross taking out of your pocket and putting it in his by using his personal connections with Trump and position as Commerce Secretary?

Is it truly for American competitiveness or is it going to benefit ArcelorMittal and Wilbur Ross's connection with them?

I would argue that they're not necessarily exploiting "non-rich" as much as they're exploiting the poor.

The people in power do everything they can to keep wages down. Minimum wage doesn't keep up with inflation. Pensions went away in favor of the 401(k). Unions are losing their power. A manufacturing job used to buy you a house, car, and help you raise your 2.5 children. Now, it barely gets you an apartment and a bus pass.

But the real exploitation is how the rich have convinced the poor that it's not their fault. "It's those damn, dirty Mexicans stealing jobs!" Or telling them "Hey, we'll give you a pay raise if you give us some tax relief!" or that if they want the house, they need to get a real job or something like that. Manufacturing jobs are non-skilled and don't deserve anything over minimum wage!

Of course, it's all lies, but some people eat that shit up like candy. That's the exploitation. They're fucking the poor and successfully directing the blame somewhere else.

>The people in power do everything they can to keep wages down.

Wages are set by the market through supply and demand

So infect those poor people with memes that encourage having tons of kids so that there's a lot more poor people to compete for less and less jobs (as automation moves the means of production to family owned land / equity holdings)?

I'm not convinced that memes are the primary force driving the inverse relationship between wealth/income and birthrate.

In white collar work, sure.

But the low-skill, minimum wage jobs? No. Those wages are effectively set by the government. Every time an employer hires someone at minimum wage, they're really saying "I would pay you less if I legally could." And that's where the rich are making sure minimum wage stays low.

You’re correct that minimum wage breaks supply and demand but not in the way you think. When an employer pays someone minimum wage what is being said is “someone would do this job for less but the government won’t let me hire them”.

I'm going to disagree with the second part of your comment, because it implies that the employee being hired wouldn't be willing to do it for less themselves.

In any case, without a minimum wage, low-skill wages become a race to the bottom as people become more and more desperate for work. Someone might be willing to work for $1/hour because they're fine living in a cardboard box behind their workplace and eating scraps from the garbage.

But that only allows income inequality to worsen. The rich get even richer as they sit back and laugh as the employees essentially auction themselves to lower and lower wages. Upward mobility dies as the ability to seek extra education and training disappears because you gotta work 100 hours/week just to survive.

So yeah, I suppose minimum wage breaks supply and demand for wages, but I'd argue that's a damn good thing.

> it implies that the employee being hired wouldn't be willing to do it for less themselves.

I agree the person who would work for less might even be the person taking the minimum wage job.

I disagree that this decreases class mobility though. Lowered labor costs mean lower barrier of entry to starting your own business. There’s a floor to how much it costs to start a labor dependent business and it’s based on minimum wage. That means you need substantial capital to get started. Also, lower wages means lower prices which disproportionately benefits poor people.

Few things hurt the poor, in particular unskilled minorities, like minimum wage. Those people are effectively outlawed from the labor market because their marginal productivity doesn't make the cut. This is why there is often exceptions in minimum wage laws when it comes to hiring youth and the disabled. This is also why you've seen labor unions lobbying for a $15/hr minimum wage, with exemptions for those in the union.

> Few things hurt the poor, in particular unskilled minorities, like minimum wage. Those people are effectively outlawed from the labor market because their marginal productivity doesn't make the cut.

Hogwash. Are you sincerely arguing that an hour of work doesn't produce $9-15 (or whatever the minimum wage is, plus other overhead) of revenue for the company they work for?

I'm not sure what's so hard to believe about that. It's not even a controversial statement. Are you suggesting that if labor were cheaper the market would not consume more of it?

If there's a demand for X amount of product, and it will take Y people to provide the labor to supply that product, then businesses will hire Y people. They're not going to hire more than Y just because they can.

The only time the market will consume more labor because its cheaper is if the amount of labor they already had was already insufficient, in which case if they really needed more people, they would have already hired them.

That's just wrong and demonstrates a fundamental lack of understanding of basic economics.

If labor were much cheaper, I personally might be willing to hire a maid, a gardener, a masseuse, a cook, etc. Similarly a retail business might hire more cashiers, or have more staff on the floor to answer customers questions and help them find things. A gas station might provide a full service experience for their customers. You could do this analysis for virtually any type of business and given cheaper labor they would hire more people.

Why is this so? Because the demand for labor, like goods, is infinite.

The relevant hurdle for an hour of labor is not the marginal revenue but rather the contribution margin (marginal revenue minus [non-labor] variable costs) of that hour.

> Manufacturing jobs are non-skilled and don't deserve anything over minimum wage!

Why is that a lie? If literally anyone can do the job and the potential supply for that job includes nearly everyone in the labor market, why would we expect that role to pay more than the bare minimum? At the end of the day people get paid as much as it would cost to replace them.

Keep in mind the context of another sentence earlier in my post:

> A manufacturing job used to buy you a house, car, and help you raise your 2.5 children. Now, it barely gets you an apartment and a bus pass.

The message was more about the lower buying power of a manufacturing job and minimum wage of today versus a few decades ago.

That a manufacturing job used to provide a middle class lifestyle was an anomaly based on the US being in an extraordinary position post two World Wars that devastated the rest of the globe and enriched this country. Globalization has normalized labor rates to what they’re really worth. The twentieth century consumerist lifestyle is definitely not sustainable when given to every living human on earth.

> A manufacturing job used to buy you a house, car, and help you raise your 2.5 children.

There was maybe a very brief historical moment when that was true, but I don't think it was ever the case; industrial capitalism has always been strongly grounded in the economic insecurity of the working class.

By getting market monopolies (or oligopolies) and making you pay more for your things. (This one is quite straight forward, I don't think it needs examples.)

By getting monopsonies (or oligopsonies) and making you receive less from the things you sell. (Like in combining labor prices, and non-poaching agreements.)

By taking public property or outright coercing you into a less desirable outcome. (Like taking the tax you pay, or buying laws.)

Way too many (too many to ignore) rich people got rich by doing one of the above. And even some that did get rich honestly end-up doing that once they have the power.