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Comment by cjensen | Hacker News Reader

This is a good lesson for those of us making programs who "need" to charge a certain price in order to make a living. There is something in the human psyche that really wants to make a connection between the price of an item and the living conditions of the seller or the buyer.

The lesson is this: the Law of Supply and Demand is not interested in your rationalizations or ad-hoc reasoning about "fair" pricing. In this case, the cost of living for BART employees has nothing to do with what BART should pay the employees, unless those costs cause enough employees and potential employees to quit and reduce the supply of labor.

For those of us in tech, the lesson again is that pricing has nothing to do with your costs in making a good or service. If the return is insufficient, you may either choose not to make the good in the first place, or cease making the good. It has no effect on pricing.

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As Shirley says:

> For another, what does 80k really mean? Is it the average of their base salaries or their total costs of employment? And who are included in this average? Certainly, if management salaries are included, it'd unreasonably skew the data!

I am concerned why there are 217 people in management. I am sure we can find some other people who will work in management for less. Fire the management!

If it were up to me, I'd stick to the BART compensation for everyone but the utility workers and increase their base by about 1k over current BART proposal. I'd make up for that by cutting down on management costs. I would not necessarily decrease pay outside of those with corporate title but they have to start letting some of the people in management go. My goal would be to reduce the number of management employees from 217 to 150 by the end of 2014. Nobody needs 17% of their workforce to be in management. Trim that fat.

I don't have much confidence in either the unions or the management to do their job. I bet everyone involved is very glad that I don't run BART.

A few questions:

- Why is 217 too much, and 150 is better? Presumably some organizations need lots of management, while others need very little- how do you, as an outside observer, come up with a reasonable number? - Where did you get 17%? According to [0], there are 3430 bart employees. 217/3430 = 6.3%.

0: http://www.mercurynews.com/salaries/bay-area?Entity=Bay%20Ar...

I suspect management covers all the professional grades as well you know the HR, marketing, securitty and professional engineers not just those with strict line management roles.

Hm... I guess I got a little carried away. I still don't understand why a security instructor or an engineer would be considered management. I'm sure there's a rationale. Somebody want to help me understand this concept?

Because thats how they are recorded by HR for reporting purposes and in the US to make them exempt grades.

99.99% of HN readers who work in tech will be considered management/professional grades even if you dont formally "manage" anyone

I don't mean to derail this conversation but I thought to HR I am just "Contingent Labor". How can I be considered management?

Are you considered an "exempt" grade if so HR will have to put you in the M&P (managerial and professional) group to avoid all sorts of nasty tax problems with the IRS.

In the real world, actually, this piece of union propaganda does have an effect on the union-management struggle, so actually the world is interested in questions about cost of living. Whether that decides anything is, of course, yet to be determined.

Now in general, people sell stuff to make money and so there may be a demand for a product below what I sell it for but if the costs of producing it, including some skilled labor, are such that no one can make much money selling the good cheaper, well then the "supply" part of "supply and demand" certainly cares about costs of living too. Sure, some electronic products can have their production automated and be made by anyone in the world and thus their supply can feel infinite. But other things involve multiple monopolistic positions. BART has a natural monopoly on medium-rail in the Bay, the union is aiming to preserve a monopoly on supplying labor to BART. In the real world, there no more reason that the union's monopoly should be broken any more than there's a reason to create companies competing someone competing with BART for riders. There are no lessons here, just who wins.

"All's fair in love and war"

You've got to be willing to bite the bullet though with that philosophy:

Almost the entirety of the BART management's public argument has been "BART workers get paid so much and get more benefits than you do!" And you've got to equally condemn that, because the level of healthcare you personally receive has no bearing on what BART workers should.

Back in reality, yes, the cost of living in an area does matter, and if BART workers got paid 2x the median salary, they'd be being paid too much.

You're mistaken -- that was not a condemnation of the employees. Just observing the erroneous reasoning about the problem -- which as you say, also applies to management -- which I hope people can take to heart in their own business.

I don't know enough about BART to have an opinion. I would observe that, given the liberal situation in the BART counties, that employees have probably been treated as well as possible. I also understand that management intends to break that cycle in this round. Right, wrong? That's a lifetime of understanding I lack in order to have an opinion.

Here's an interesting essay that expands on this exact point: https://medium.com/armchair-economics/ec6139b54795

it's written by a collaborator of this project and a transportation PhD student at Cal.

If we could lose jobs and still run BART safely and efficiently, I am all for fewer jobs (or even no jobs) at BART.

> Suppose there were some technology that rendered BART’s whole workforce unnecessary. Robots maybe. Or some super-efficient private contractor. The public would face a choice: we could lay off all the workers and use the savings to send trains more places, more frequently, and at a higher level of comfort and safety. Or we could carry on.

Sorry but BART does not exist to provide jobs. BART exists to run a public transit. If we don't need those people working in BART, I am sure their hard work will be useful somewhere else.

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