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Comment by duxup | Hacker News Reader

I feel like this is the sort of story you hear from a diplomat about how great it is that in some other country they can hire a gardener, nannies, and etc for very cheap. Then they move home to a different country and they bemoan their lack of cheap help.

Is this a great thing? I'm not sure for the folks getting paid very little it is ...

Granted every system somehow relies on cheap labor somewhere so there is more to it than that.

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I recently moved back from living in Ecuador for four years and I can say the inequality there is far far less than it is in the US. Your point is totally valid in many places, but Ecuador is a weak place to make it.

Carpenters seem to make a fair wage there, it is the norm to buy things that were manufactured by the shop you are buying from and that can range from inexpensive to bespoke and higher end.

As someone else mentioned Ecuador works really well as an economy for the things it gets to keep within its borders, which is a lot since they have a surplus of oil, great agricultural resources etc..

But once you start importing things the gap widens a ton. Cars are very very expensive (the few manufactured locally a bit less so) due to import tariffs. iPhones just aren't really a thing. And getting a big LCD monitor there wasn't even an option at any price, I lugged one in in a suitcase.

The craziest bit is that Ecuador is dollarized, so they don't even get to print their own money!

Cheapness of labor is not necessary for the system the author is describing to work (although it's probably a factor in how that system is able to be the present equilibrium). The system in Quito may be less efficient (i.e. there may be waste, like extra guys with trucks waiting for customers), but it's also less efficient at concentrating capital. Whether wages are "low" depends on the ratio of those inefficiencies. I can imagine a world where the latter "inefficiency" is maintained as the waste is reduced and wages rise. It would require "gig economy" coordination tools to match capacity to demand efficiently, but the market tech would need to lack power over the workers, whether because of competition or regulation.

Reminds me of Japan's "busy jobs". People paid at doing essentially nothing as a form (and instead) of welfare.

I'm not sure the gig economy really is a good example of positive things as far as wadges / benefits and etc goes.

For the "gig economy" to become a good example of positive things as far as wadges / benefits and etc goes, the market tech would need to lack power over the workers, whether because of competition or regulation. That's why I'm not saying "look at Uber, Uber is wonderful." I'm saying I can imagine a system with the best of both worlds. The American political/economic climate hasn't got us there.

I'm really skeptical of the idea that you could have everyday people hire other humans for cheap... and at the same time somehow they would make a good income / benefits / etc.

You see this a lot in VC-land too. I've lost count of the number of Twitter threads from VC "thinkfluencers" bemoaning how much more exciting the startup scene is in China, and usually when you dig into those threads you realize what they really mean is that labor in China is so cheap that it's a lot easier to start some useless delivery business with a fancy app.

Duh, of course you can do more with human labor when human labor is cheaper, but that isn't something to strive for.

Cheapness of labor is also indicative also of the purchasing power of the place. Yes you'd be able to hire people for cheap, but it also means the people getting paid little are able to afford the basic necessities. Also, cheap labor equates to more demand and therefore means a higher net income.

>Is this a great thing? I'm not sure for the folks getting paid very little it is ...

It's not like the employees in big stores in the US, IKEA, B&B, Ashley, Home Depot, etc, all the way to Walmart and Amazon have it any better...

> Every great society was built on the backs of a disposable workforce

~ Bladerunner

The question is what could those other people do instead? Are they happy with the pay?

$7/hour might seem chump change to you but as a high school kid getting $7 bucks to build websites at an agency I was fucking ecstatic. Nowadays I’d laugh at that rate and yet I still think it was the best thing I couldve done for my career at the time.

I'm not sure "happy with the pay" is a good measure if the alternative is not working / serious problems. So yeah they'll take what they can get.

I'm also not sure the cheap delivery guy is likely working themselves up to much more for each table they carry like you were with each website.

Yeah so if you pay someone $7/h in a country with $5 minimum wage. Are you paying well or not for a menial job?

This is because your parents were subsidizing that wage by covering your expenses

No $7/h was a damn good hourly rate in my neck of the woods back then. Still is for people in menial jobs.

Minimum wage is $5.2

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