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Comment by DevX101 | Hacker News Reader

I'm surprised it's taken this long for some tech enabled labor platform to emerge. Power is gained by coordinating some portion of the value chain into a single node. Amazon is powerful because they can centralize demand into a single node (Amazon.com) and then force suppliers to play their game. Saudi Arabia is powerful because they can centralize the supply of oil into a single node (AramCo) and then force buyers to pay their price via OPEC.

Labor doesn't have a centralizing node, and is consequently powerless. Even engineers, relatively well paid as they are, are somewhat powerless. The high salary commanded here is due to autonomous market forces, not a coordinated strategy.

Unions used to be strong before the 70s but they've gotten successfully defanged by political parties.

There's definitely room for building MASSIVE and powerful without the political corruption of yesteryear's unions.

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that's not the only option. you can strengthen the unions and amass power in yet another organization, or you can disperse the power of corporations to better equalize the footings of the various constituencies.

while not against unions prima facie, i'd encourage moderating power structures as the first-order solution over building new ones. societies should be people-first and power structures second (or third, or whatever).

You mean have them pay taxes

It doesn’t need to be wrapped in technical jargon, y’all

Aristotle wrote about this shit 2,000 years ago

This isn’t new territory to society

Look at tax rates between WW2 & Reagan and the growth in the wealth of the middle class during the same period

Ffs just accept it: you’ve been lied to so long you’ve come to believe the lie about taxes

Political unrest at every point along the path of building human society is centered around gross material inequality

Stop bloviating at your screen as mom & dad did when Dan Rather would say something stupid and get to work solving these problems

All I see is people creating a market for more of the same prioritizing rich grandpas demands

Rather than follow Andreessen, the next generation should have what he had as a kid: higher taxes funneling shit tons of resources into local communities to evolve as the people need, not as finance market speculators dictate

Pitter patter

Let's get 'atter.

> Look at tax rates between WW2 & Reagan and the growth in the wealth of the middle class during the same period

Are you talking about income taxes? Because, yes you're right that Federal income taxes are nowhere near what they were post-WW2, but...

> and the growth in the wealth of the middle class during the same period

...the wealth of the upper class has grown to historic levels because the vast VAST majority of upper-class wealth right now (top 0.1%) is 1) in unrealized capital gains, and 2) once capital gains are realized, they are taxed at the same rate that they were all the way up until the 70's, where it spent a brief decade moderately higher than it is today.

Bezos doesn't have $100B+ sitting around in a checking account, and a WW2-era marginal tax rate wouldn't really raise as much as you think it would. Most of the richest billionaires have a salary of $1.

Bezos doesn't have 100B$ sitting on a bank account, but he has a low-interest high throughput equity line against his hare portfolio that means that if he wants to cut a 5 billion dollar cheque in the next 30 minutes, he can. Which is pretty damn close to having 100B$ sitting around.

If he did pay a high tax rate every time he realized his gains in any way or tapped his equity through a financial instrument, I think things would be much better. But right now Bezos can pay a realized tax rate of under 20% if he wants.

Yes, these billionaires take collateralized loans, but that doesn't change the fact that they will eventually HAVE to pay taxes. At some point, Bezos has to realize some gain somewhere to have cash to pay back the loan — and odds are, that will be taxed as capital gains, the rate for which has been essentially constant since WW2.

Sure, but in practice the actual tax rate for the upper echelon of the world right now is much, much lower than that for common people or for the upper echelon back in WW2.

That's factually incorrect.

https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/

That is only factually incorrect if you look at the 1% in terms of households and in terms of income. In reality, a multi-millionaire might not qualify as the top 1% in household income due to their reliance on capital growth instead of straight income. One might see a million dollar increase in net worth, while paying no taxes on it, and then using that million dollar as collateral to help finance more and more growth. The only tax you might end up paying might be capital gains tax of 20%, or even 15%, eventually, while if it was household income you would pay 45% in taxes. The shift of income from dividends to capital gains for the wealthiest is not reflected in your statistics, and so I don't think they can be used to answer my earlier comment.

The data in your source indeed does not seem to consider capital gains tax, as they seem to reflect the top tax bracket on average for different states and locales, whereas if capital gains were considered in relation to the state in which they are realized, it would certainly be much lower.

> In reality, a multi-millionaire might not qualify as the top 1% in household income due to their reliance on capital growth instead of straight income. One might see a million dollar increase in net worth, while paying no taxes on it, and then using that million dollar as collateral to help finance more and more growth. The only tax you might end up paying might be capital gains tax of 20%, or even 15%, eventually, while if it was household income you would pay 45% in taxes. The shift of income from dividends to capital gains for the wealthiest is not reflected in your statistics, and so I don't think they can be used to answer my earlier comment.

Except this was true during WW2, also. You have to do an apples-to-apples comparison of what the top 1% of income earners paid then vs now. The shift in income to capital gains tax doesn't matter since the capital gains tax is the same, and the shift would have simply happened quicker with income taxed the way it was.

Also, collateralized loans don't change anything besides simply delaying when the tax is paid. One needs to realize some gain somewhere to be able to pay back the loan eventually.

> The data in your source indeed does not seem to consider capital gains tax, as they seem to reflect the top tax bracket on average for different states and locales, whereas if capital gains were considered in relation to the state in which they are realized, it would certainly be much lower.

Yes, but capital gains taxes have been the same, so in effect this source undercounts the intensity of this effect. It doesn't matter if there are more multi-millionaires today that do not qualify as the "top 1% of income earners", because they would pay the same capital gains tax then vs now.

It’s even worse then; they truly own less than they claim and are just de facto in charge because economists (who I’m sure have nothing to gain by it) let us know this is all exactly how it works

If you see everyone as atomic agents of work, is Bezos worth so much because of cherry picked models favored by law, or is he himself distributing goods in a universally mathematically efficient way by some unknown force, invisible hands and “free markets (in a nation of laws?)”?

If he’s literally doing it, wow! Ok. But if it’s mathematical efficiency it’s mathematical efficiency. Bezos didn’t measure it. He took object distribution and abstracted it. Wow! Business innovation!

Nevermind guys like Krugman openly admit Hari Seldon like powers of bending social agency are exactly his goal

That’s great if the people in charge are truly benevolent

Old enough to wreck the planet and die before it’s a problem doesn’t really suggest to me they’re going to be motivated to voluntarily acquiesce to measurable anxiety this creates for folks that aren’t quite so old

Again more disingenuous western BS

That carbon emissions have detrimental effects on human health and the environment was pretty obvious in London and elsewhere back in the day

But since it’s not in your neighborhood, those laws of physics that matter for computers are lying to us when we annotate the inputs differently?

Ok. Yup. Shark jump achieved.

> If you see everyone as atomic agents of work, is Bezos worth so much because of cherry picked models favored by law, or is he himself distributing goods in a universally mathematically efficient way by some unknown force, invisible hands and “free markets (in a nation of laws?)”?

> If he’s literally doing it, wow! Ok. But if it’s mathematical efficiency it’s mathematical efficiency. Bezos didn’t measure it. He took object distribution and abstracted it. Wow! Business innovation!

I guess optimization of global supply chains in a way that enables anyone to practically materialize literally anything they want within 2 days might not count to you as a real “innovation”, so I’ll take a different angle.

Half of Amazon’s revenue comes from Amazon Web Services. Starting a business today is easier than it has ever been, thanks in large part to AWS. I work at a small seed-stage tech startup, and our product runs on infrastructure that, until recently, was only available to giant blue chip corporations with the resources to employ 100s of engineers to maintain datacenters, databases, tooling, monitoring & alerting, load balancing, etc. All of that is now available to our tiny little team for a simple monthly subscription fee. You can attribute the value of most startups today to the availability of this infrastructure as a service.

> That carbon emissions have detrimental effects on human health and the environment was pretty obvious in London and elsewhere back in the day

Not sure how this is relevant to income tax rates, gig workers, or labor unions — but we probably agree that carbon emissions are bad. IMO we should tax emissions as much as possible.

yes, the special rate for capital gains is ostensibly justified as an investment incentive, but it's unnecessary for that purpose. investors would still chase the highest returns for their capital.

we should instead treat all income the same for tax purposes.

I mean, no disagreements there, I'm just attacking the inaccurate and often used WW2 era vs Reagan era income tax argument.

Even back then, none of the super rich were paying that income tax rate, because the wealthiest people in the world owe their wealth to ownership in their corporations.

For every Bezos how many corporate higher-ups making millions a year from ever-rising executive salaries while tax rates on those salaries have fallen?

I'm much less concerned with one Bezos than I am with thousands of multi-millionaires.

> corporate higher-ups making millions a year from ever-rising executive salaries

Yes, the vast majority of corporate executive wealth is delivered through stock compensation vs cash compensation. Executive compensation can be in the millions of dollars per year, but that's nearly always in stock options[1]. The marginal income tax rate variation between WW2 and Reagan would not have changed this.

Also, the scary wealth disparity numbers you see floating around are typically attributed to the growth in wealth of BILLIONAIRES (usually ultra paper rich founders). Put simply, the GDP has grown at historic rates over the last 40 years, and the gains from that have gone to the founder-class. Most non-founder executives aren't billionaires.

[1] https://www.npr.org/sections/money/2016/02/05/465747726/-682...

Real taxes per capita have done nothing but increase since the end of WWII. Taxes as a percent of GDP have been stable while real GDP has increased. There are higher taxes now than there were then. The nominal "high tax rates" paid in the mid 20th century were fictional because nobody actually paid them; the effective rates were no higher than they are now.

What's different now is what we spend the money on.

Welfare mostly.

Care to provide a source?

https://en.wikipedia.org/wiki/Government_spending_in_the_Uni...

Welfare was slashed to the bone under Clinton. The largest expansion of gub'mnt care costs was under Bush when he expanded prescription drug care to the elderly.

Another $1 Trillion (not Billion, Trillion) is estimated for veterans care for those who were hurt in the endless wars in Iraq and Afghanistan.

Not a year... 1 trillion over 55 years (or what ever it is) isn't that much.

What's the effective tax rate on each quintile?

How has proportion of taxes levied from persons vs corporations changed over time?

I'm not opposed, I think it's more urgent to get money out of politics. The amount of time our reps have to spend fundraising is insane. And that money isn't free. Pre-internet, one legitimately needed a lot of money to get a message out to a nation as big as ours. That's no longer true.

There are all sorts of ways we could fix this problem. Government-funded elections. Maximum spending limits. Maximum contribution limits. Strong spending disclosure requirements. Real penalties for people who violate spending laws. Requiring all public servants to keep assets in a blind trust. Ending the revolving door. I don't much care which approaches we start with, but I'd love to see us making progress here.

Fix government? Okay.

First, corporations and private sector aren’t inherently bad. There is a need to have economic interests in a community heard in politics. They just need a counterbalance like unions have done in the workplace for labor. (Yes, I know unions are a diminished power but their legacy is still strong).

Next, let’s stop being penny wise and dollar foolish. Tech bro’s in San Fran make multiples more than people who make life or death decisions. It’s time for elected representatives to be paid commensurate for the seriousness of their jobs so they care about keeping the job and not leaving for a private sector payday they helped create. Term limits aren’t the issue, who these people really work for is. Start pay at $2M / year for a congressperson with $10M a year in capital they can spend on their local community however they want so long as they and their immediate families don’t benefit. Turn the tables on the well monied interest groups.

We also need to push for a fourth branch of government. One that has 2 people per state chosen at random (like jury duty) to serve a four year term in DC. This branch will have veto rights over any president being able to sign an executive order or a bill. Imagine how many unpopular EO’s or bills would pass (e.g. net neutrality is killed) if average people had a voice.

Also, let’s gut the entire educational system in the country and start over keeping only the actual educators and the real estate as the constants. If you want tomorrow to be better we need an education system that is the envy of the world. We need K-12 to be enough to bring people to an employable level. There is no reason every abled bodies graduate with a fully functioning mind shouldn’t be able to code at least hello world in python.

Unions aren't an alternative to corporations. They're a balance for it.

This sounds like "Instead of creating a 'Legislature', let's just disperse the power of the 'Executive'." Yeah, how do you plan to do that, without a balance?

exactly, they counterbalance. you can either have huge weights balancing each other or small ones. it’s better then to have small ones because power corrupts. it’s why we share power among 3 branches, 50 states and myriad local jurisdictions. civilizations are more resilient against small corruptions of power than large ones.

we do it by rolling back the advantages businesses have amassed over the last half century (or providing residents with all of the same advantages). we institute transparency in labor markets, nullify tax advantages and liability shields, equalize the political voice of the populace, hold companies accountable for (excessive) risk-taking, and rectify thousands, maybe millions, more such injustices. is it that hard to imagine?

The problem is it's much harder to moderate power structures, because that requires changing them from the inside, which they themselves are incentivized to prevent.

that’s true but do we keep digging ourselves further in the hole or do we start metaphorically clubbing our administrators and politicians over the head to make meaningful changes?

change takes work and we have to start somewhere. at least our political system has the levers available to make that change, however hard.

The tool most prominently featured in this article, coworker.org, launched in 2013.

One thing labor has plenty of is apps. It makes things more efficient for us, but what's needed more than anything to organize is workers willing to take risks and stand together.

I always said if sysadmins all banned together, they could change the world overnight. Let your imagination fill in the gaps.

Write a movie script, make a fortune!

Ah but then you might lose the interest in the revolution...

Banning as a group? Such as deplatforming everyone as if they're dictators even though they don't own the network?

I believe it was meant to be "banded together". My apologies if you were aware and trying to make a joke. :)

I was making a joke, I wish tone was able to come across better, have a good weekend!

> I always said if sysadmins all banned together, they could change the world overnight.

What do you think they could all agree on though?

That Lotus and all associated products should be purged from the planet.

Yes.

Also Oracle licensing.

Once they work out which text editor to use, the sky's the limit.

Any day now.

We laugh, but that's pretty much how the Mongol empire was created :)

But when the BOFH is involved in the band, he will take power and rule the world himself

The platform that needed to do this, if it were to happen, was LinkedIn. It is naturally a centralizing node, as you put it, that aggregates a lot of recruiting / talent search.

If LinkedIn had used its position to charge subscription fees of its users, not its recruiters, then it could have used that to effectively unionize its entire userbase, across a variety of employers and industries.

But Microsoft owns them now. Never going to happen.

For what it's worth, I don't think it's a good idea (Israel has it's country-wide union, Histadrut, and it's one of the poorer examples of unions), so I'm just pointing this out.

If LinkedIn charged subscription fees to its users, it wouldn't ever become popular. Unionizing users seems very different from their business model.

> If LinkedIn charged subscription fees to its users, it wouldn't ever become popular.

I wonder how unions, charging union dues, ever become popular?

Do you recommend any resources that I can read regarding the defanging of unions?

I don't study this academically so don't have any good sources offhand. But the history of union busting has a long history in this country. In the 1890s steel workers tried to unionize and strike and Andrew Carnergie sent in the Pinkerton's (private precursor to today's FBI) to spy on the unions and break up strikes. They'd do this violently and many people got killed.

Today it's less physically violent, but if you get a job as a floor worker at a big company like Walmart, you've got mandatory videos about how terrible unions are. And yes, you will be fired if the word 'union' comes out your mouth on company property.

Not just floor workers.

It isn't quite what you're asking for, but _A History of America in Ten Strikes_ by Eric Loomis is a great book of the general history of American labor.

The telling of the stories includes a lot of the strategy and tactics, legal and otherwise, of busting unions down to where they are now.

https://www.amazon.com/gp/product/B078XKHSSB

Isn't this kind of what Frank (https://getfrank.com/) is trying to achieve?

> Labor doesn't have a centralizing node

Why doesn’t the US have a Labour Party? That’s what we have in the UK. (But it’s not very popular!)

The U.S. only has two parties with meaningful amounts of support -- Republican and Democrat -- and it has been this way (with few notable exceptions) since the 1800s. I've been told this seems very weird coming from countries with multi-party governments.

Ostensibly, the Democrats are the "party of the working people," but a lot of modern leftists (myself included) would argue that the vast majority are barely more worker-friendly than the Republican party.

It's important to note that while there are only two parties, the parties clearly have sub-factions.

Trump for example is not what the GOP Republicans would be. He was his own thing and Trumpism fits within the Republicans, but has pushed out the GOP to the sides of the Republican party. Things like the Trade War would probably never have fit in with regular GOP Republicans. The brand of nationalism that Trump uses is very different from the traditional Republican nationalist rhetoric, which was generally okay with illegal immigration as long as it served the economic engine.

You have similar efforts in the Democrats - although no one has been successful like Trump has been. There is the traditional institutional Democrat (e.g. Pelosi, Obama, Clinton, now Biden) who operates with Wallstreet backing and largely benefits the neo-liberal agenda. You have the Sanders supports, who are not really Democrats at all, but Sanders implanted himself with the Democrats so now they're competing for control. Then you have the "Progressive" Democrats who are very pro-reform, identitarians, pro-socialism, bordering on very strong statism, possibly of the totalitarian variety. These are the AOCs, the Ilhan Omars, the "Squad".

All of the factions in the Democrats are trying to do what Trump achieved with the Republicans, but none have been able to dethrone the institutional Democrats so far. A lot of that is because they lack the impetus, but also because the DNC is extremely corrupt and openly aligned with the institutional Democrats.

So in short, while there are "only two parties", these parties are highly maleable and only really retain their names. If you go even further in history there are times where the parties essentially "flipped" in their entire positions on everything. Republicans, who are accused of being racist by the media were the anti-slavery party, while Democrats were pro-slavery.

This is partly due to a unique quirk of the US where someone who isn't a member of a party can run for its leadership, which is insane isn't it when you say it out loud like that.

Why do they allow outsiders to run to lead their parties?

In the UK you need to be a career member of the party to run as leader.

Because there are only 2 parties. It would be undemocratic to restrict who is allowed to run in them. More practically, the parties are not homogeneous, and there will always be factions that align more closely to groups outside the party.

The most relevent legel precedent I am aware of is Smith v. Allwright (1923), which ruled it was unconstitutional for a political party (the Democrats) to restrict primary voting to whites.

>When, as here, primaries become a part of the machinery for choosing officials, state and federal, the same tests to determine the character of discrimination or abridgment should be applied to the primary as are applied to the general election

> We think that this statutory system for the selection of party nominees for inclusion on the general election ballot makes the party which is required to follow these legislative directions an agency of the state in so far as it determines the participants in a primary election. The party takes its character as a state agency from the duties imposed upon it by state statutes; the duties do not become matters of private law because they are performed by a political party.

Granted, in this case, the court was looking at racial discrimination by the parties, which introduces direct constitutional concerns, and so has a lower bar to warrent governmental interference. However, the principle that "private" political parties are not actually private is fairly engrained in US politics (although the exact legal boundaries are still unclear).

https://supreme.justia.com/cases/federal/us/321/649/#tab-opi...

It's also funny because many working people would say the exact opposite (though I would agree that the Democratic platform, nominally, includes the policies that are in their actual interest).

America's parties have done an astonishingly good job of divvying up the country along lines that really have much more to do with personal identity than with actionable policy, and getting us focused on working against each other instead of together. There are Republican workers and Democrat workers. Both think the other party is where the out-of-touch "elites" lie. Both are mostly right.

The UK and the USA are both based on the UK establishment's greatest invention: first past the post. This forces two parties.

One party is "pro establishment". Then you only have one party who is supposedly "anti-establishment".

At this point you only have one party head to keep an eye on.

If the mood turns ugly (and it won't often because the establishment own all the press/media), you have to fix the head of the one "anti" party now and again.

UK: use the media to circulate a smear campaign against Corbyn after he nearly got in power and surprised them

USA: use the media to ignore/denigrate/belittle Sanders as some kind of insane communist.

Trudeau campaigned on removing FPTP and as soon as he got in someone, somewhere told him to drop it like a hot potato. Legalizing weed was fine, even though this was apparently hotly contested before, because it's not a real issue and is there to be sacrificed when real power issues come up.

FPTP clearly does not force two parties, given as there are three substantial parties in the UK parliament, and seven more minor parties with seats!

Lib dems are always an insignificant bit-part.

They got 7.4% of the votes at the last election and 1.9% of the seats. Smaller parties like the green party do even worse.

By design.

> Lib dems are always an insignificant bit-part ... Smaller parties like the green party do even worse.

Smaller parties... like the SNP? 7% of the seats from 4% of the vote. Seems to fly in the face of what everyone says about what is possible under FPTP. And what's more they've been effective in influencing what happens in parliament!

Most of the time it converges on two parties.

Here's the "law": https://en.wikipedia.org/wiki/Duverger%27s_law

So you might think it's possible. But it's a case of in theory, in theory and in practice are the same, in practice, they ain't.

And that is what FPTP is designed for. To over-reward those at the top of the leaderboard. It's designed to not be representative.

>And what's more they've been effective in influencing what happens in parliament!

It's actually not that different in practice There are a large range on views in both parties, but you put on the Democratic or Republican label in order to build a majority coalition. This is sort of like how the Westminster parliamentary system works: labor forms a government with the greens. Labor has more seats by far is and is mostly in charge, but the greens get some government positions and a little influence on the agenda of state.

As a recent example of this here Bernie Sanders was not at all a Democratic party member but "joined" with them to try and get enough support.

Well, one problem that unions have had is that almost every non-monopoly whose workers they successfully organize seems to fall apart. It may just be a correlation, but it is also possible that the unions are causing the failures.

There is an obvious causal chain there. Companies in non-monopoly markets have to price competitively or lose customers. If unions are actually getting anything for their workers then they would be extracting more from the company than companies with non-union workers, but companies in competitive markets don't have thick margins to pay the difference with so they would have to raise prices, which makes them uncompetitive.

This is not an argument in favor of monopolies, however, because unions can extract more from a monopoly but so can capitalists, and it all comes at the expense of the consumer, which is also you. It's better to make $2 and spend $2 than to make $3 and then have to spend $4 just to get the same stuff.

Typically it's not make $3 and spend $4, it could even be, make $3 and spend $2.01. Labor rate going up $1 doesn't mean unit price goes up $1.

The entire price paid either goes to labor or capital, and most of it already goes to labor. If you pay 1% of the workers $3 instead of $2 then the price may only need to rise by $0.01, but then you're just taking $0.01 each from a hundred workers and giving it all to 1% of them. And what happens after you do that a hundred times?

Meanwhile, again, introducing a monopoly increases the money that can be extracted from customers by labor but also by capital. So if you introduce a monopoly and it raises prices by $0.01 or $100 or whatever amount, and you're very lucky and labor gets 90% of the increase and capital only 10%, then on average workers have lost 10% of that amount. Because you still pay 100% of the price increase and then get less than 100% of it back.

There are also taxes, which make it even worse -- you get paid $1 more, the government takes 25%, you go to buy the thing that costs $1 more (so capital is getting 0% of the money) but then you owe 8% of the $1 in sales tax, and you've now lost a third of the money you used to have to Uncle Sam so they can give it to Bank of America and Halliburton.

I don't get your toy examples. It seems you're assuming laborers can only consume the products they produce? That's not how an economy works, and affordability also depends on need and scalability.

What happens when you don't increase labor rates, but keep increasing prices anyways? Maybe this is less about increasing prices and more about capital needing to decrease their share.

>but then you owe 8% of the $1 in sales tax, and you've now lost a third of the money you used to have to Uncle Sam so they can give it to Bank of America and Halliburton.

Sounds like a good argument for universal basic income

That causal chain only works in perfect competition where prices are convergent with marginal cost. In real market conditions perfect competition doesn't exist just as perfect monopolies are rare.

Google and Apple are competing on selling phones, Google and Facebook are competing on selling ads, yet all sit on billions of dollars of cash. I don't see their workers being able to "extract" more from their companies?

> That causal chain only works in perfect competition where prices are convergent with marginal cost. In real market conditions perfect competition doesn't exist just as perfect monopolies are rare.

Only "close enough" is required, not perfection. Sure, a union could negotiate a 1% raise without destroying most companies, but then they'd eat that amount in union dues and time value of doing paperwork etc. Meanwhile if they demand a 30% raise, that's more than the companies in a lot of industries could absorb.

> Google and Apple are competing on selling phones, Google and Facebook are competing on selling ads, yet all sit on billions of dollars of cash. I don't see their workers being able to "extract" more from their companies?

Are you not familiar with the level of compensation paid by these employers?

They are also hardly exemplars of competitive markets. Think restaurants or farmers.

> They are also hardly exemplars of competitive markets.

Yet in 2013 they found the necessity in colluding in no-poach wage suppression.

> but then they'd eat that amount in union dues and time value of doing paperwork etc

Finland has several software engineer unions. They still seem to be rather competitive both nationally and internationally.

> Yet in 2013 they found the necessity in colluding in no-poach wage suppression.

You find it unusual that companies in less competitive markets would collude? They're the only ones who can, because otherwise there are too many entities to coordinate. Yet another disadvantage of uncompetitive markets.

> Finland has several software engineer unions. They still seem to be rather competitive both nationally and internationally.

Finland has unions all over. They also have a different culture and different labor regulations. They're also not the first country that comes to mind as a place to hire software engineers.

> You find it unusual that companies in less competitive markets would collude? They're the only ones who can, because otherwise there are too many entities to coordinate.

I agree that it was simply easier to coordinate as a function of low number of agents in the game. But I doubt the convenience of it was the motivating factor.

> They're also not the first country that comes to mind as a place to hire software engineers.

They don’t come to mind for anything, because they are a very small country. Yet they have the ICT giant Nokia (which is not just the phones). Still with high unionization. In fact, after Nokia sold its mobile division to Microsoft, there has been an influx of ICT companies to Finland to capture the newly unemployed talent.

I take your point regarding culture and other contextual variables, but there is hardly an macroeconomic reality that makes unions unworkable as you generalized.

> I agree that it was simply easier to coordinate as a function of low number of agents in the game. But I doubt the convenience of it was the motivating factor.

Well of course the motivation was to suppress wages so they could make more money. All companies have that incentive. Which is why that's illegal independent of unions -- it's an antitrust violation.

> I take your point regarding culture and other contextual variables, but there is hardly an macroeconomic reality that makes unions unworkable as you generalized.

Let's put it a different way though: Do union software engineers in Finland get paid more or less than non-union software engineers in San Francisco?

Because it's possible for a union to make its workers globally competitive by accepting lower wages to offset the cost of dealing with the union, but that's obviously not what we're after, right?

Let's assume your premise is correct. Then it could also mean that there hasn't been any working combination of capital and labor that didn't depend on labor being exploited. I don't believe this to be the case, but your assertion actually validates the necessity of labor unions, not undermines them.

Your assumption is that all non-union labor is being exploited.

To be fair, when I know Union workers doing the same job as me are being paid nearly twice as much with medical benefits, sick time, regular raises, proper safety equipment, regulated working hours etc. It's kind of hard not to feel a bit exploited by comparison.

Meanwhile, how many non-union software developers do you know who don't have medical benefits or sick time? It's the nature of the occupation rather than the presence of a union that determines those things in the long term.

And if you go and unionize workers in an industry where the workers can't command that kind of premium, the next thing that happens is the company goes out of business or moves its operations to Mexico or similar, and then how are the unionized workers doing on the unemployment line?

> the next thing that happens is the company goes out of business

As long as the company pays its owners more than their lowest-paid employees, it can afford to pay their employees more, without going out of business.

There's plenty of profitable firms that can't just pack up and move to Mexico.

Not exactly. Its owners could always pack up and work elsewhere. Or in the case of capital, invest elsewhere. You have to beat the alternative option.

What is going to stop wherever they pack up to go to from organizing in a similar manner? Does the factory that the employees work in also disappear if the owners pack up and leave? Why would things be any different for the owners, under new ownership?

Plenty of profitable businesses can afford to pay employees more. The fact that they are profitable is testament to it. They choose not to, because their employees don't have enough leverage in the employee-employer relationship. Unions change that.

> What is going to stop wherever they pack up to go to from organizing in a similar manner?

The fact that not unionizing was how they got the work to begin with. If they tried to do the same thing there, the company wouldn't have any reason not to move back, which the workers in the new place obviously don't want.

> As long as the company pays its owners more than their lowest-paid employees, it can afford to pay their employees more, without going out of business.

If the CEO makes a million dollars a year in a company with 100,000 empoyees, wiping out that entire salary would add less than $0.01/hour to each of the employees' wages. Also, then you would not have a CEO, which you might actually need sometimes.

The CEO is rarely the owner of a company big enough to require unionization. When they are, their primary remuneration is rarely in wages.

You're basically arguing that if a company pays a CEO what good CEOs get paid then they could pay their workers more instead. But that doesn't work, because you have to pay a CEO what good CEOs get paid if you want a good CEO.

The shareholders can't just hire a random janitor at a janitor's salary to be the CEO and expect to not lose more money to unqualified decisionmaking than they would've had to pay a real CEO.

Likewise, they can't just make zero profits forever, because otherwise they couldn't raise capital. If they're a new company they need that investment in order to buy land and build the factory etc. If they're an existing company then they still need that, or the shareholders would sell their shares and the only buyer would be a corporate raider who wants to tear down the factory for scrap and sell the land to a condo developer.

Salaries and profits are relative to the market average. Unless the company is paying its executives more than the average company, or making more profits than the average company, they don't really have a surplus they can give to the workers without becoming uncompetitive.

Do you genuinely think if FAANG software engineers were to unionize, those companies would out of business with their huge cash reserves, or move to Mexico or outsource to Bangladesh?

Half of those companies are monopolies or close enough. But they also already provide very generous compensation, so what would you expect a union to negotiate for?

You would also run the risk in that case not that they outsource to Bangladesh but that they outsource to Europe, if the union started demanding things they didn't want to give. Or just let the union walk out and hire different workers.

That's the other reason unions don't really work outside of monopolies. If the company needs 100,000 workers and only 200,000 workers with that skillset exist in the world and the other 100,000 work for a competitor, you need the workers you already have. If the company needs 10,000 workers and a million workers with that skillset exist in the world, they can let you walk and hire other people. And in this case it's a real monopoly, not the soft stuff like Google and Facebook have -- Google doesn't have a lot of competition for search, but a random engineer from Facebook or Apple or Microsoft could still do most of the work they need to do, and vice versa.

> But they also already provide very generous compensation, so what would you expect a union to negotiate for?

That assumes everything that is of consideration is already priced into compensation, which is not. Wasn’t it several years ago one of them had its workers a walkout against sexual harassment, forced arbitration, manager retaliation etc?

> You would also run the risk in that case not that they outsource to Bangladesh but that they outsource to Europe

They would be in for a nasty surprise as Europe is more unionized that US.

> Or just let the union walk out and hire different workers

That assumes software engineers are fungible, which is not as much as it appears (at least there is a high cost to “funge” them en masse). Going to your manager with a competitor’s job offer is not an uncommon way to get a raise or promotion.

> That assumes everything that is of consideration is already priced into compensation, which is not. Wasn’t it several years ago one of them had its workers a walkout against sexual harassment, forced arbitration, manager retaliation etc?

That doesn't mean it's not priced in. Companies with conditions like that still need to attract employees somehow. When they get a reputation like that they either have to fix it or provide more of something else to compensate for it. Markets don't require unions to function.

> They would be in for a nasty surprise as Europe is more unionized that US.

That's why they don't do it now. If there were more unions in the US, that's no longer a relative disadvantage for the company, which then is a problem for the US workers who just lost their advantage and thereby their jobs.

> That assumes software engineers are fungible, which is not as much as it appears (at least there is a high cost to “funge” them en masse). Going to your manager with a competitor’s job offer is not an uncommon way to get a raise or promotion.

Replacing software engineers isn't free. There is a transition cost. But the transition cost isn't infinite, and it acts as a hard cap on what the union could get out of the company. And from it you immediately have to extract all the overhead costs the company has to incur in dealing with the union to begin with. Which are often difficult to predict ahead of time, so companies may choose to cut their losses immediately rather than risk even higher costs later.

I wasn't a software developer, I was a machinist manufacturing things that can't easily be offshored or exported, so that wasn't so much a concern.

The disparity between unionized and non-unionized workers in that industry is pretty high. You've got unionized workers starting at $35/h and upwards beyond $50/hour, with included benefits. I've seen non-unionized jobs advertised for as low as $14/h to start with the cap being $25-maybe $30 if you're lucky, without the benefits. The unionized job will also typically be limited to 40h/week.

There was no limit on the amount of hours I would have to work. I would regularly be expected to work 50-60 hour weeks, if I got sick, I kept working, if I hurt myself, I kept working, the level of work would always be beyond what the number of staff employed were physically capable of doing.

The way I see it, a lot of people fought over the decades so workers could have a reasonable standard of living while not having to endure ridiculous conditions. Unions were at the fore in the fight for this.

Businesses have shown time and time again that they're willing to pay as little for as much labour as possible. When it comes down to it, while workers are replaceable to an extent, they are what brings a business profit and to most businesses, they're valued among the least worthwhile of its assets. Unions force businesses to care about employees and though, I know this isn't really a crowd who can relate, but if you don't own a business and you are employed by someone, then unions have your best interests in mind.

They're probably some of the very few entities in this world that do.

It sounds like you were working in one of the industries where the employer was in a consolidated market, so they could absorb the cost of the union without becoming uncompetitive.

That can in theory benefit the union workers, but it comes at the expense of the company's customers, which at scale are ultimately the workers again.

It's also generally not a stable equilibrium, because monopolies are bad and everybody hates them. At some point the government gets around to smacking them with the righteous hammer of antitrust, or the Japanese start making decent cars and disrupt the US auto conglomerates, the internet comes around and destroys your broadcast radio payola system, and then it all turns to rust.

> Businesses have shown time and time again that they're willing to pay as little for as much labour as possible.

Well yes of course. That's what they're supposed to do, so they can charge lower prices and get more customers.

And then what you're supposed to do as an employee is to take the job you like the most based on working conditions and compensation etc. So a company can offer you $25,000/year for 60 hour weeks and no benefits, but if some other company is offering $35,000/year for 60 hour weeks and no benefits then you take that, until the first company starts offering 40 hour weeks and paid sick leave.

A company's ability to underpay people is limited by the willingness of somebody to work for that amount of money. No is a powerful word.

This is also why you get rid of the need for so much of this with a UBI. Because it allows people say no, which requires employers to make better offers.

That's not my assumption, as I explicitly stated. I wanted to show the possibility of a union-favorable explanation of the OPs premise.

In case you are curious about my actual assumption; I think there are a lot of externalities that are not priced-in in the contract, which will naturally favor the more organized side, which happens to be capital than labor most of the time. I don't know if exploitation is necessarily the right adjective for every case, but I believe there is a large potential for asymmetry in untracked disutility an individual can get out a transaction with their employer.

Huh? If you aren't assuming that then how does this fall out:

"Then it could also mean that there hasn't been any working combination of capital and labor that didn't depend on labor being exploited."

Is it not your assumption because of the so-called weasel words "could mean"??

No, because they already rejected the premise that came before "Then"

He says “assume industries where unions have gained strongholds have ended up as failed industries” (paraphrasing). Then he says this implies that no model of industry has succeeded without labor exploitation. That doesn’t follow strictly from the original premise so it must have an implicit assumption built in which is that non-union labor is exploitative.

Maybe I’m being stupid but I don’t see how else this works out. Can you expand to help me understand what I’m missing?

I could have been clearer, you are right. I was trying to engage in a thought experiment. In union = failure axiom, there can be contradicting explanations as to why. My OP implied “unions make things fail” (and I assumed due to commonly assumes reasons like inefficiency), I construed the idea that “unions might be exposing a dependence on exploitation”. I don’t necessarily ascribe truth value to either premise, just wanted to expand the possibility of explanations. I wasn’t clear on that, apologies for the confusion.

An obvious problem was offshoring and arguably the unions contributed to that by making US manufacturing more expensive.

Every so often someone suggests that software engineers should unionize. Maybe I'm too pessimistic, but I think that it would be the best thing that ever happened to Bangalore. I worry about all our jobs ending up in Bangalore eventually, I'm just hoping I can make it to retirement before that happens.

What about international worker's unions?

That is hard to imagine. If the site I've linked below is accurate, the average salary of a SW engineer in Bangalore is $20k. Glassdoor says the average salary in Silicon Valley is $112. ( which seems low to me ) Even with COL adjustments I'm not sure how you'd get both sides to agree on a 'fair' amount.

https://www.averagesalarysurvey.com/bangalore-india

I'd like to see some evidence on that because your claim seems baseless.

Look at actors, screenwriters, and musicians. These fine folk have been gig workers since before the term "gig workers" was coined. They belong to guilds, not unions, but the difference is semantic. There's no monopoly, and the industry is ticking along just fine.

There are tons of unions you've probably never heard of. TAs at your local university -- is your local university a monopoly? No. Costco isn't falling apart -- is it a monopoly? No, they compete with walmart, amazon, etc and show no signs of slowing down. Boeing -- awkward; bad management, not the union, is to blame for that downfall. Longshoremen -- no monopoly there, and no signs of business drying up. I could keep listing examples, but do you have data or just a hunch?

How about the UAW? Bad management as well?

> Even engineers, relatively well paid as they are, are somewhat powerless.

They have plenty of power, not to force their companies to do what they want, but to vote with their feet and choose to work for companies that suit their preferences. A robust job market is much more empowering than collective bargaining. With a union you only get 1/10000th of a say in what your union does, whereas you have 100% autonomy over your personal employment choices.

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