Why pay someone who produces less, or can bear a lower wage, the same as someone who produces more or can't?
There's a reason subscriptions cost a lot less in the developing world than in rich countries - and everyone seems to think this is somehow fundamentally fair.
People are happy for software engineers to earn more than burger flippers, but not happy for 3x software engineers to earn more than 2x software engineers.
Emotional reasoning abounds.
1) Why pay less productive employees the same as more productive employees (for the same position)? Because it can be hard to measure performance, and harder to demonstrate to what degree the poor performance is direct responsibility of the employee. To some degree, it is laziness and/or sentimentalism from the employer; but if pursued to the ultimate consequences you may end up expending way more in your super perfect performance measuring infrastructure than what you will end up saving in payroll. It's way easier to turn a blind eye to small inefficiencies and firing actual slackers.
2) Why pay employees with low bargaining power as much as employees with high bargaining power for the same (or better) amount/quality of work? To some degree, every employer does this unless their workforce is unionized. The problem is, greed is an actual invariant in human nature and you do not want to live in a society that lets it run unchecked. It may be nice to save on payroll by low-balling your employees, but then it will be equally nice for Microsoft to send a horde of salesmen to hardcall your client database and offer them juicy cash incentives to drop your business and sign up for their free service...
... or for the matter, for Beaves and Butthead to try and invade your home and take as much of your property as they see fit.
If it turns out that any companies are trying to do the things the article alleged --- exploitative (e.g., using intimate data to determine the minimum they can offer each individual gig worker, while they have them over a barrel) and bad-faith (e.g., blocking an individual worker from gigs when they're about to hit a bonus threshold) -- the corpus of HN comments tells us that there will always be a tech worker with logic and values aligned with making it happen.
> Emotional reasoning abounds.
Many of us would do well to be more logical in our thinking, and many of us would do well to discover more "emotional" values based wanting to lift up everyone rather than dominate them.
The right way to do this is via wealth redistribution via taxes. Not letting markets determine appropriate prices simply leads to society wide misallocation of resources.
So does wealth redistribution via taxes (and printing money, which is a significant component of wealth redistribution in all developed countries, and not to the advantage of the poorer people).
The right way to prevent exploitation is to equalize bargaining power. But doing that requires less government interference, not more; free markets aren't perfect, but they do better at equalizing bargaining power than the alternatives. For example, the reason Uber can exploit its gig workers is that its competition, taxis, is already regulated up one side and down the other by the government, and hence is horribly inefficient (and exploitative of its drivers), so Uber can compete simply by being a little bit less inefficient. Nobody has ever even tried to see what an actual free market in transit would come up with.
That is what wealth redistribution via taxes does. For example, a universal basic income gives everyone at least some amount of bargaining power.
No, it doesn't, because universal basic income doesn't create any wealth. Money isn't wealth; you still have to go buy the things you need, and what help is UBI if the things you need are so expensive that UBI won't buy enough of them?
Bargaining power in economic terms means you have the ability to create wealth.
If the problem is a society does not have enough means to produce the basics like food/housing/energy, then that is a different discussion. But I am under the impression most developed countries can and do make enough of these things to keep their populations sheltered and fed.
That doesn't solve the problem I described. It makes it worse. See below.
> If the problem is a society does not have enough means to produce the basics like food/housing/energy, then that is a different discussion. But I am under the impression most developed countries can and do make enough of these things to keep their populations sheltered and fed.
Most developed countries are that way now, but that's without UBI. If UBI were widely available, wealth creation would decrease, because much, if not most, wealth creation in any country is done by people who have to create wealth in order to earn a living. UBI means people no longer have to create wealth to earn a living--at least, that's what the sales pitch will be, and failure to achieve that in the short term will create huge political pressure to increase UBI until it appears to achieve it. But any such achievement can only be temporary.
Now if we were to use advancing technology to make the necessities of life cheaper, that would indeed be progress--but it would be progress not by giving people handouts, but by making the necessities of life cheap enough that nobody needs a handout to get them.
Yes, but it will also be removing all the sweetheart deals that companies now have with governments. (Btw, patents are a big part of this.) The power discrepancy you describe comes from those sweetheart deals. Without them large companies, being extremely inefficient producers of wealth, are open to all kinds of competition.
Btw, the labor laws you speak of do not actually favor labor. For example, minimum wage laws make it harder for people in that wage bracket to earn a living--because minimum wage laws prevent many jobs in that bracket from existing at all. Companies don't mind that: they just automate those jobs. The ones who suffer are the workers who now find jobs much scarcer.
I'm speaking of the power discrepancy between the employer and employee. Many of these sectors move towards a monopoly regardless of government interference. There's just no way a new infrastructure company is going to come in to destabilize, say, city sewers.
> The ones who suffer are the workers who now find jobs much scarcer.
This whole paragraph doesn't make a lot of sense to me. If the assumption is that a minimum wage job is the amount of money you'd need to make in order to survive (arguable) then the ability to create a ton of extra jobs below the subsistence level is useless to society but useful again to the employer.
To be more precise, I was thinking of things like laws that protect people at their workplace (work place safety) or those allowing employees to discuss their wages. The first set are obvious why they are important, and it would take a truly ghoulish argument to be against them, but the second are important as well. Without those there would be complete information asymmetry between the employer and employee. Information asymmetry is a huge problem.
Which only exists because the employer is in a privileged position due to government regulations that favor employers over employees.
That said, there is a fundamental power imbalance between someone who thinks of themselves as an employer (or more precisely, an independent wealth creator, who employs other people to help them) and someone who thinks of themselves as an employee--meaning, someone who just wants a "job" without wanting to think about the business risks that are inherent in any kind of wealth creation. That kind of employee will always be at a disadvantage in bargaining, yes. But you can't fix that problem by government regulation. You can only fix it by helping people to realize that they don't have to think of themselves as employees.
> Many of these sectors move towards a monopoly regardless of government interference.
What sectors are you talking about? Natural monopolies are extremely rare. The original meaning of the word "monopoly" was a government grant giving an exclusive right to sell a particular product.
> If the assumption is that a minimum wage job is the amount of money you'd need to make in order to survive
I made no such assumption. But it is true that many proponents of raising the minimum wage do make such an assumption, in order to argue that the current minimum wage is not enough to live on and so needs to be increased.
> the ability to create a ton of extra jobs below the subsistence level is useless to society
Nonsense. Every job I worked while I was in high school and college was below the subsistence level--I wasn't living on that money, because I was living with my parents (high school) or in a dorm the room and board of which my parents were paying for (college). I was using the money I earned to buy extras that weren't included in the room and board my parents were paying for, and to build up savings for the future. Doing that is a classic way of giving yourself a better start in life. But "you can't live on a minimum wage job" rhetoric takes all those opportunities away.
> Information asymmetry is a huge problem.
I agree. I don't agree, however, that the laws you say "protect" employees actually fix the problem. They don't. I have watched employer-union negotiations from up close. They don't actually help workers at all. In one case I saw, the union signed up to the same deal with the company on day ninety-three of a strike, that the company had offered on day two. Who suffered most because of those extra ninety-one days out on strike? The rank and file union workers. (In the next union election they voted out the union bosses who had managed the strike, but by then it was too late. Nor was the next set of union bosses any better.)
The issue is that the labor has no ability to correct the market - in the same fashion. (Ie: labor cannot exploit and downright _murder_ capital owners - like the owners can and have done. There are laws preventing that.)
If humans are not treated with a higher priority than roi or profit, the business is inherently evil. (Hint; they all are.)
If we have laws for some and not for all - that is to say privatization of all corps with no regulation - that is deplorable and will not end well.
A solution, imho, is for all services required for life, health, education, and safety to be public owned and not corporations.
All other services are owned equally by those that operate them, co-op like.
Free markets can still exist like this.
But hey. That’s not really what capitalists claim to want when they say “free market”; that phrase is a dog whistle for “legal exploitation of the labor pool.”
It is nothing of the kind. It is a perfectly valid description of what government-backed central banks do in all developed countries. It is also a very helpful description since it substitutes plain language for obfuscatory phrases like "quantitative easing".
It is ok to let people with bigger appetites to eat more; but if you cannot be civil and keep wasting food, why wouldn't the others kick you out of the table?
That's why we no longer have piece-work but hourly rates.
I think that it's probably partially due to the historical difficulty of measuring developer productivity.
Sales compensation has always been heavily commission based. And for the most part people are fine with that.
They are deeply "unfair", using the logic of objections to the original article.
The issue is that they use everything they know about you to determine the lowest possible price you’re willing to accept, on an individual basis with droves of data that exist because of as-tech.
If people freely trade something, in an ideal, spherical cow way, then they should both be better off afterwards. Therefore the trade (including trading labor as well as goods) creates value. I think this was called "surplus" value.
However, there is generally more than one price where both parties would benefit and should want to trade. Which price is agreed on in that range determines who gets what portion of the surplus value.
Therefore if one side of the transaction has superior knowledge of what price the other side will accept, then in theory they could get up to 99.99...% of the surplus value, as long as the other party "rationally" will be motivated by the remaining 0.00...1%.
A purely rational actor with no secrets is easily manipulated.
What you're describing is basically the "Subjective theory of value"[1].
> Therefore if one side of the transaction has superior knowledge of what price the other side will accept, then in theory they could get up to 99.99...% of the surplus value, as long as the other party "rationally" will be motivated by the remaining 0.00...1%.
Interestingly people don't really act like that[2].
> A purely rational actor with no secrets is easily manipulated.
Probably. Good thing that, in this case, the most important information like competing offers tends to be secret. Or at least strategically revealed.
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Because we're not living in an Ayn Rand novel.
If you pay someone widget wise - that’s entirely different.
Reminder: Capitalism will exploit any time it can.
So by this logic it's fine for a manager to be paid 2x more than a subordinate, presumably because they're 2x more important/valuable/scarce/productive/whatever, but it's not fine for a software engineer who is 2x more productive to be paid 2x more than the less productive software engineer, all because it's "the same role", and such categorisations are arbitrarily chosen. Assuming I'm not strawmanning you, I don't see why this makes sense.
All we do here is normalize employee comparisons at the employee-employee level, and not at the employee-corp level thus *keeping our working class fighting itself* while the owners ensure we help them pay as little as possible for their labor.
You measure it the same way that you measure the relative difference in compensation that a manager should make versus a SWE. You make a subjective assessment. Why is such a subjective assesment OK in the case of manager vs SWE, but not OK in the case of SWE vs SWE? Both assessments are equally prone to mistakes and difficulties of the type you are talking about.
> All we do here
Convince me of this, because to me, this is necessary to being fair and just. As an employee, I would feel ripped off if I am clearly doing more quality work than a colleague, but I am being paid the same. It's unfair, I am de facto doing work that's uncompensated if I am doing 2*X but am being paid as if I was doing 1*X, which is de facto someone stealing money I rightfully deserve. In effect and outcome, it's no different to wage theft being done to me, due to the fact that half of my output is de facto uncompensated. And let's be real, sometimes it's super obvious when one person is more productive than someone else, even if in other cases it can be hard to measure and separate the contributions of two individuals, and even if in other cases those perceptions are distorted due to narcissism and information asymmetry.