I didn’t make a throwawy just for this — just happened to be logged in from last time I used it. Whatever points the article is making I’m sure are all wonderful, but I didn’t read it. I just read the headline and my immediate reaction was simply:
Why should this be obvious? Most people would assume the cost of labor is set no different than the cost of a bag of concrete or a gallon of milk - supply and demand.
I guess it depends on your definition of “most people.” I grew up poor and around poor people. No one thought wages were determined by supply and demand. It was always about what the boss could get away with.
Most employees get fired for trying that. Glibly saying "supply & demand" doesn't erase the massive power imbalance between employer and employee in most businesses.
If one goes about it like an @ss, and without doing one's homework, sure. The way to do it is to deliver value that is worth more money, and then approach management with a proven track record of you being worth more money. It worked for me.
A very large percentage of employers don't have employees worth money. They have employees as cost centers, totally devoid of worth as humans or even resources. I know a lot of people who work for these companies. They have jobs like data entry or cashiers for massive corporations that have bought out all their local competition in their particular market.
Their evaluation scale is purely "how often do they screw up?". I used to date a woman who had (for a short time) a data entry job. They were expected to make no more than 3 mistakes per month. There was no reward for fewer mistakes. Any more and your job was in jeopardy.
Employees in these situations have the power to negotiate exactly when the loss of the job is not a significant threat to their life. Most employees with these jobs have them because they needed some job, any job, to keep their life together. The employers know this. Anyone who rocks the boat isn't an employee desperate enough to accept the abuse, so they aren't wanted there anymore.
This is exactly the point the article was making. A non-negligible portion of the population has no alternative that's better than accepting this abuse.
Millions of people come to this country, legally and illegally. They come with nothing, often not even speaking English. But they seem to find decent jobs, move around the country to find those jobs, and are able to start businesses.
I find this difficult to reconcile with your claim that people are forced to work for certain employers.
That's not difficult to reconcile at all. A person with nothing has way more than a person with debts and other obligations. A person with nothing has no trouble changing their circumstances, because they have nothing to lose.
Compare that to a person who is the sole caregiver/earner for family that is dependent on them, $20k in debt from medical bills.
The sort of person for whom a one-week disruption in pay pushes them across the line from just barely keeping up to unable to pay their utility bills.
Would you really counsel them to move on at full speed, damn the cost to their loved ones?
The hundreds of thousands of "Dreamers" were brought to the US as young children. Evidently there are plenty of immigrants who bring their families with them and seem to make things work.
A coworker of mine once complained bitterly about a pay cut he was "forced" to take. I asked him why he didn't leave. He said he had no choice. I asked why. He said he had a wife, mortgage, car payments, etc., and could not afford even a week's disruption in his pay.
I suggested that he'd made all those choices himself to max out his obligations, so that he had to run to deposit his paycheck before everything bounced. The company didn't do that, he did. He was well paid, and he'd forged all those chains on him all by himself.
So... You claim that everyone trapped in these situations deserves it?
That sounds a lot like admitting the people whose existence you've been denying do exist after all. It sounds like you know it and have always known it. It sounds like you're telling me they don't count because they're only getting what they deserve.
I guess there's no point in me attempting further explanations - you already know all the same things I do. All I can do is beg you to take a few minutes to deeply and critically evaluate your position. Is shrugging and saying "supply & demand" really the best option we've got? Is there any chance at all that it's better to address this failure of the labor market instead?
Accepting responsibility is empowering, because then one can do something about it.
Blaming others for the results of ones own choices is never going to work out well.
The coworker I mentioned insisted he had no choices. Of course he had choices. He could sell the car he was making payments on, and use the proceeds to buy a car he could afford, for example. But he didn't want to hear that, he wanted to be a victim and be mad at the world.
> failure of the labor market
It's not the labor market's fault he overextended his finances.
Look to AAA game companies for a host of answers to that question. Treat your employees like burn&churn part timers, focus on assembly line kinds of output, hire them young, fire them young, etc.
That, and because most roles in most projects don’t require stellar talent, just the ability to shut up and code. If you’re willing and able to monetize a sub-par product, as so much of software from games to IoT seems to be, then it works.
It’s all part of the race to the bottom we’re getting to live through.
In my experience, “most people” simply aren’t that stupid. The assumption seems to be that greed and corruption are a default condition, and that there’s nothing we can do about it. I truly believe the average person —- who simply isn’t represented on HN —- is just resigned to this as a fact of life.
Before the cacophony of “we need better laws! More government!” Please reflect that all the wage suppression that is commented on the article comes from laws in the first place.
It’s amazing to me that the solution presented by those who are anti laissez faire are more laws to correct the past laws.
Market transactions only happen if they are mutually beneficial. Can’t force any side as this will distort it.
Please look at the supreme labor laws found in Europe to find out what happens. To note, the Spanish, French, Italians face chronic young adult unemployment with roughly 1/4 people being employed.
Nice strawman. Nobody says that, nobody is going to say that. The most commonly proposed solution to this problem is unions, but I bet that’s the one thing you hate more than laws so you won’t suggest it.
" In other words, in the labor market, effectively a small number of employers are competing for their labor"
This is not what a monopsony is. That's an oligopsony.
"Because most people sink roots in their communities, they are reluctant to quit their job and move to a job that is far away."
The effect of this is a wash because this is also a problem for employers too. The supply of good workers is smaller because few people are willing to move towns for one - which drives labor prices up.
"Unions used to offset employer monopsony power"
Ahh, okay, now im understanding the point of this article. Lets fight monopolies with more monopolies instead of solving the underlying issues!
I agree with the points about non-competes though.
I think unions should be tried for anti-competitive practices, just as any monopoly should.
What is the difference between a bunch of carpenters unionizing their wages versus a bunch of small and large companies all agreeing to price-fix their products? Nothing.
Unions are no more monopolies than any random company is, and union bargaining isn’t collusion any more than a hiring manager consulting with HR is.
When employers band together to bargain collectively, we call it a “company” and it’s not only accepted, it’s so entrenched in our culture that we can barely conceive of any other way. When employees do the exact same thing, we attack them relentlessly.
No. This is completely wrong. A company is not by default a monopoly - a union is.
Imagine if there were 10 different smartphone suppliers but all the suppliers agreed that they were only going to let you buy from 1 of them - company X. Company X would just charge you whatever the hell they felt like because you would have no other options. It would fricken suck. It would feel the exact same as a monopoly.
Now compare this to a union. Company Y's employees are all unionized and the union forbids company Y from buying labor from anyone but them. Even if it's not forbidden , new hires are typically glad to join the union too, and in some cases the law forbids otherwise. See how similar that is? It's still a monopoly - just a monopoly against a single buyer.
I don’t believe companies are forced into any exclusivity agreement like you describe. They choose it. It’s not much different from any other long term business deal.
A union is by default an organization of employees to bargain together. Anything beyond that is extra.
We get it, you really dislike unions and think that all union members are scum without any ethics. Before you try to walk your comment back, this is a pretty straightforward summation of what you just said. I think you're clearly overlooking the wide amount of abuses being done against employees, especially in the tech sector. How many times have you heard of a "salaried" employee being asked/forced to work 100 hour weeks end on end for months without extra compensation for some pie in the sky promise of stock options that get diluted with every new employee or stock offering? How many CEOs that drive companies into the ground but still get golden parachutes for laying off workers have you heard about. The power imbalance isn't with the ineffectual unions, it's with the corporations and owners that engage in rent seeking behavior.
I'm okay with unions as long as they don't engage in monopolistic behavior - I haven't found one of those yet though. For one, if unions didn't forbid company X from who they can hire from, and were okay with company X hiring pilots from any of the 10 pilots unions concurrently, then that would often be okay. Right to work laws are a super important step towards this.
Even with that step, union-monopolies and inter-union-collusion would still sometimes be a problem just like it is with companies, and that must be stamped out.
Alice and Bob are negotiating an employment agreement. Alice belongs to an organization and gets agreement from her fellows on how much she should offer, and also that none of them will undercut her and try to make a separate agreement with Bob on different terms. Bob goes it alone.
When Alice is a hiring manager and her organization is a company, we call this “how hiring is done thousands of times every day in this country.” When Alice is a worker and her organization is a union, you call it “price fixing” and “colluding.” Why the difference?
Interesting...maybe in an ideal world...but in the real world where business owners currently have the upper hand (and congressmen and congresswomen basically on payroll), I'm perfectly fine with unions acting as a counterweight to corporate power.
1. Unions are not often a counter balance. They are usually just additional monopolies[0] where there was none before. The airline industry is incredibly competitive but yet airline pilots still decided to unionize and price-fix.
2. Monopolies should be fought with regulations targeted at increasing competition and lowering barriers to entry - not with more monopolies. Fighting a monopoly with another monopoly just hurts the consumer and hurts our country in the global economy.
3. unions have congressmen "on payroll" too. In fact in some states some industries have state laws that forbid people from working outside of the union. Only 27 states have right to work laws.
[0] Per-company unions are the easiest monopolies to create because the scale of them is much smaller than the scale of the whole industry. Its very easy to get all your coworkers at company X to unionize and forbid company X from hiring elsewhere - and often new hires are happy to join the union too. But its very difficult for your company X to achieve a monopoly itself because it has to dominate an often much larger global market. For an example, see here: https://news.ycombinator.com/item?id=16489013
Consumers gain much because the cost component of wages in most products is not necessarily that significant, while wealthier employees make for a stronger base of consumers.
I think that's a false equivalence. The difference is that the union and the company come to a negotiated bargain. This is an internal dynamic where consumer prices are still subject to market forces. Large companies that price fix are screwing "non-participant companies" and ultimately the consumer to control the market.
For a firm to profit, the commodity's sale price must obviously be more than the cost of its production. Market competition ideally shaves prices closer and closer to their original production costs as firms undersell one another.
If a firm profits, it follows that it has paid its workers wages less than the value their labor has generated. Collective action through a union brings wages closer and closer to the true value of their labor.
Both of these situations limit the extent to which an ownership class, engaged in no productive labor itself, can siphon off the value that real work produces.
Captive markets and "right to work" shops likewise both afford this class the liberty of being as parasitic as it wishes.
We can enact laws to prevent the practices we as a society decide are unacceptable.
There are people here who are fatalistic and think that politics is unwinnable and politicians are in people's pockets, but laws can take away unions' power too, so I don't see politics as avoidable in any case.
I think framing a union as a monopoly is odd, but they become institutions in their own right, and theirs interests diverge from the wider group's fairly quickly.
The UPS union seems to want to force UPS to not invest in drones or self-driving trucks at the expense of everyone who would benefit from significantly cheaper delivery, and this isn't exactly an isolated incident.
The construction unions in NYC have secured themselves a deal where the government must use union labor, and unions negotiate a contract with their employers, who have no incentives to keep costs down because they pass all these costs on, and we get subways that are 10 times more expensive than anywhere else in the world.
We have a similar situation with construction unions & housing in NYC leading to increased costs and .: more expensive housing for everyone in NYC.
We can't even pass a federal budget, but we can make sure corporate lobbying gets their giveaways. Laws in the United States as of late almost never benefit the citizen, unless of course you consider corporations people.
> We can enact laws to prevent the practices we as a society decide are unacceptable.
The trick about laws is that they are only as strong as their enforcement. The larger an organization is, relative to the enforcer, the easier the laws are to game.
I guess the idea is that the "oligopsony" is acting like a monopsony because of collusion.
Why do you say it's a wash? They may not need "good" workers and instead only need enough workers. The attraction to "good" workers is not sufficient to drive wages up.
Corporate HR policies in the modern era are essentially designed to commodify and drive down the costs of labor through information assymetry, rigid pay bands, and lawsuit mitigation.
Since most labor no longer organizes to negotiate for themselves, obviously the “Industry standard” pay bands are going to have a strong dampening effect on any wage increases even in the case of a worker shortage. Most individuals alone don’t have the power or the information edge needed to beat an “industry standard” which has essentially been decided through collusion of the largest players in the market. See the direct email correspondence of Steve Jobs and Eric Schmidt for more info.
Enter Scrum. One of the side effects: the more effective the process, the more replaceable and interchangeable the workers are. Granted, great for planning.
Hasn't the US labor participation rate been dropping for over a decade?
If that is accurate, it makes sense that unemployment is down and still going down but wages aren't moving at all or as quickly. There's effectively "spare capacity" in the system in the form of people who were removed from the unemployment numbers but still wanted to work.
> Because most people sink roots in their communities, they are reluctant to quit their job and move to a job that is far away.
How common is this? As a child, my father changed jobs every few years, and we moved often as a result of that (until I was 10 at least). We even lived in France for three years because my dad thought it would be a good opportunity to learn about other cultures. So personally, I've never had any objection to moving for the best opportunity.
My wife on the other hand comes from a different background; she grew up in the same house in a rural town and thinks that moving hurts children's ability to develop friendships. She also believes that being close to family is more important than optimizing your career (although she has kindly agreed to move should a good opportunity arise).
Is the "stay in one spot" viewpoint becoming more common? I can see how this would lead to competitive job offers stagnating in a region if no one is willing to move into it or away from it.
It’s not becoming more common not all people have equal situations. Maybe you have parents that can’t take care of themselves. Maybe you can’t take of yourself. You could even like the weather or were you are born. Not everyone wants to live in New York or Silicon Valley. Not every person has rational actions or needs either .
IME, it's very common, the default for most. Once you have kids and buy a house you've decided to stick to the same geographic area at least until the kids are adults. I'd guess it's even more common now that more children are living with single parents, one parent will be deprived of easy access to the kids if they were to relocate.
It's the biggest reason people hate gentrification as well, they can quickly get priced out of an area they belong to.
I was surprised share buybacks were not mentioned. Seems like every company has been doing this over the past few years. I'm no finance guru: is there a reason buyback money couldn't be diverted into pay raises?
No, it's because a buyback is purchasing an asset (a share of issued stock) and payroll is just an expense. You could argue that increased payroll increases retention which is valuable, but that's an indirect and uncertain way to increase the value of a company.
What is frustrating is the problem can be attacked even without introducing any new law.
In many industries the reason employers have monopsopy power is regulations that prevents new players from eating the fat profit margins of incumbent players.
telecom, healthcare, real estate, legal services ......
Just like coders see every problem as a software problem - lawmakers tend to think any problem can be solved with more laws ! not realizing they are also playing the economic game theory charade.
In this case particularly, introducing more laws is going to make is harder for new players from gaining market share.
I am not also just making this up, France has some of the most progressive labor laws written with the best of intentions - but lawmakers failed to see the economical ramification of their laws. It made employers reluctant to hire full time workers - creating a painfully high unemployment rate.
A lot of American multinationals also have most of their growth happening outside US borders, I think stronger Unions and ill thought out reform is going to result in more aggresive offshoring.
I know supply side economic arguments has gone out of fashion - but by allowing entrepreneurs to more easily embrace globalization the same way as larger companies exploit it will more comfortably increase income without causing massive spikes in inflation.
This also includes less regulation so that workers can strike without legal trouble and cause trouble for employers, by dragging the process through the court system will just mean more money for lawyers - and large companies have deep pockets anyway to fight any potential lawsuit. Think about how things like fraud are already illegal but companies seem to get away with it anyway.
The only power labor has to collective withdraw it - which painfully show up in the balance sheet in every board room, its the only language capital understands.
You obviously didn't read the article and appear to be just spouting talking points. The three laws proposed in no way impede small businesses. Prohibiting anti-poaching , Limiting non-competes, and considering the labor market effects of mergers will primarily impact large businesses.
In fact, all those changes reduce friction and increase competition in the labor market. These should be precisely the kind of changes I would think you would support?
I wonder if non-compete agreements actually matter. I mean, come on. Lewandowski landed at Uber after Google. Does anyone cares if some dude from burger king will join KFC? Will BKing really sue him?
Probably not, but he would not dare join KFC for the fear that Burger King decides to sue him. Even if he wins the case, he will go bankrupt navigating the court.
And KFC would include a question on their hiring form "Are you subject to a non-compete clause?" to cover their asses. If he answers yes, he is immediately disqualified and KFC moves to the next candidate. After all, it's not like he has unique knowledge for which it is worth getting sued over, unlike Lewandowski. If he answers no and it is ever discovered he had lied, he is immediately fired.
- The article strongly highlights lack of union membership.
- Warren is interested in introducing laws.
- I do not agree regarding M and A - so what if companies want to combine capital ? If Labor can also combine more freely then I do not see the problem.
Who decides what is the correct size of a company ?
We just need to get the union-busting right-to-work laws off the books, and let the free market sort things out.
Right to work laws are a restriction of free, voluntary contracts between employers, and their employees. They forbid employees from demanding to be a sole supplier of labor for an employer, and from negotiating special, union-only employee agreements.
It's absurd that someone selling cabbages to a grocery store is allowed to enter into a mutually voluntary contract that makes them the sole supplier of leafy greens for that grocery, but the people working for that store are not allowed to enter into a mutually voluntary contract that makes them the sole supplier of labor for that store.
Given the vicious opposition of business leaders against the freedom of workers to enter into meaningful collective bargaining agreements, it's clear that they are not actually interested in free markets.
I don't understand why Right to work laws are bad, maybe you can explain. If I am looking for a job at a company and I don't agree with the unions politics, high fees, etc. and I would like to make the contract between me and my employer by myself, what is wrong with that. Why should I be forced to join a union? Or more specifically, why should I be forced to join a specific union? What if that union wont let me join because I support Republicans?
You mentioned letting the free market sort things out. That is exactly what Right to work laws do. They let two independent people make an employment agreement without anything interfering with them. If the union was good and worthwhile, the employees would join. If the unions were good then employees who were not part of the union would be paid less and get less benefits. If that is not the case then that union is not a good one and should not force workers to join it.
> If I am looking for a job at a company and I don't agree with the unions politics, high fees, etc. and I would like to make the contract between me and my employer by myself, what is wrong with that.
That employer already entered a contract with another group of people, that lists them as a sole supplier of labour for said employer.
Imagine if I had a cabbage farm. I don't care about corporate politics, I just want Whole Foods to buy cabbages from me.
But they won't. They already have an exclusive supplier contract for cabbages with Dole, or Sunrise Produce, or whatever.
Is this unfair? I don't like it? That's my problem. I should not be demanding that there be a law that forbids sole suppliers, of cabbages, or labour.
If I still want to sell cabbages, I should talk to Dole, Sunrise Produce, or start my own grocery store. Or negotiate a new contract with Whole Foods, after their current contract expires.
Providing services to an organization isn't a god-given right. If you don't like the working environment, the requirements of the job, the pay, or the hoops you have to jump through to sell to a company, that's your problem. Go work for a non-union shop, or start your own company.
> They let two independent people make an employment agreement without anything interfering with them.
If one of those two people entered into an agreement with a third party, that lists the third party as a sole supplier of services for them, that's your problem. The law should allow that person to make such an agreement with said third party, to the detriment of you.
That's the libertarian response. They are bad because they stop people from entering into voluntary contracts.
The socialist argument is that they are bad because employment negotiation is not done on a person-to person level. It is done on an organization to person level. The organization has more power, and this power imbalance produces unfair contracts.
This imbalance is solved when you allow employees to negotiate as an organization. Right to work laws let scabs and freeloaders parasitically leech off the negotiations of others, without paying into the system that benefits them. The only way to deal with that is to exclude them.
So if I understand correctly all that the right to work laws do is forbid companies from making a contract that requires them to hire exclusively from one union. I was under the impression that a majority of the workers of a company can unionise and then require every other worker in the company to join the union.
If you are correct then I can see why right to work laws are not so good. However, keep in mind that there are many laws preventing people from entering certain contracts. Such as laws forbidding a person to work at a company if the company doesn't want to pay minimum wage, or offering to give someone some money but requiring that they pay back a large amount in a set amount of time.
1. Make it illegal to have an exclusivity contract.
2. Make every concession that a union gets out of their employer apply to non-union employees. [1]
This would be like Dole getting a special deal with Whole Foods... And a "Right-to-sell" law would mandate that the terms of that agreement would also apply to me - even though I was not a party to those negotiations.
> I was under the impression that a majority of the workers of a company can unionise and then require every other worker in the company to join the union.
That would be the case in a truly free market, if the employer entered into an agreement with the union that going forward, it would only employ union people. The employer's not compelled to do that - it does so by choice.
> If you are correct then I can see why right to work laws are not so good. However, keep in mind that there are many laws preventing people from entering certain contracts. Such as laws forbidding a person to work at a company if the company doesn't want to pay minimum wage, or offering to give someone some money but requiring that they pay back a large amount in a set amount of time.
I agree. You have rights, some of which you can't sign away - for instance, it would be illegal to discriminate against someone based on race, despite the existence of a contract to the contrary. Contracts aren't entirely absolute, and this gets complicated quickly. There's also questions of monopolies, which libertarians generally do not oppose, but other people do.
[1] The obvious consequence is that the game-theory optimal strategy for everyone is to not join a union.
The tl;dr of it is that if 50% + 1 of a workforce unionizes, the union bargains collectively for everyone. Even for free-loaders who don't pay union dues.
This is like being able to opt out of paying taxes, while still receiving all government benefits. If that were legal, then our public services would collapse by next week.
Thank you for the information. I don't understand legalese that well (many colloquial things mean something different in legalese) so I will take your word for it. That changes my view on RtW
>In a new study for the Brookings Institution’s Hamilton Project, we report survey results in which we find that one in five workers with a high school education or less are subject to a noncompete.
That by itself is a remarkable statistic. The original purpose of non-compete laws was to honor the value of an invention or trade secret and stopping key inventors from directly running away with an invention and thus lowering the incentive for innovation.
But surely not every fifth worker with a high school degree or less in the market is a researcher or crucially involved in the generation of trade secrets. Many people are simply selling their labour, and this data point suggests that non-competes are being abused to an extreme degree simply to chain employees to a business.
There are a lot of things like this. Companies write all sorts of non-enforceable terms into contracts all of the time. That's why people should consult an employment lawyer when you start and end a job. Paying a few hundred dollars for a consult/review is worth knowing your rights.
Yup, my company had a clause that I could never talk bad about them in one contract. I refused to sign as I don't give away civil liberties for money. What amazed me was that almost no one else even bothered to read it before signing.
I had a similar non-disparagement clause. Not bad talk about company and especially CEO. I asked for a sunset clause, HR asked if I wanted my money or not. Sent it past a lawyer friend and he said take the money because it would never hold up.
I also to opt-out of Rapiscans and get pat-downs at the airport to stand up for my 'liberties'. After feeling violated after the recent 'enhanced' one where some dude rubbed every part of my bait and tackle for 2-3 min I decided to give up that fight to. No money though.
Because folks without a highschool education can afford to fight a major company in court. /s
Sorry about the sarcasm, but this kind of abuse of the contract system needs to be stopped. You can only really invalidate an individual contract (ianal) as I understand it. So the fight would have to happen for _every employee_. While case law makes it cheaper, the reality is most of these folks can't afford to higher a lawyer for a few hours, let alone a few days.
My guess is that you could get a lawyer to take it on contingency if you were to be sued. The real issue would be the company hiring you.. would they be willing to take the risk.. They actually have no incentive to b/c they probably use non-competes as well!! So it will take an intrepid employee / applicant to make the case that they were not hired due to the non-compete. OR an employer willing to go to bat (which may happen if it's a doctor/lawyer or someone they feel worth going to bat for. And even then I bet people settle which means the law never gets its mettle tested.
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[ 6.3 ms ] story [ 215 ms ] threadNo shit.
Who are the people that need to be told this?
If one goes about it like an @ss, and without doing one's homework, sure. The way to do it is to deliver value that is worth more money, and then approach management with a proven track record of you being worth more money. It worked for me.
Their evaluation scale is purely "how often do they screw up?". I used to date a woman who had (for a short time) a data entry job. They were expected to make no more than 3 mistakes per month. There was no reward for fewer mistakes. Any more and your job was in jeopardy.
Employees in these situations have the power to negotiate exactly when the loss of the job is not a significant threat to their life. Most employees with these jobs have them because they needed some job, any job, to keep their life together. The employers know this. Anyone who rocks the boat isn't an employee desperate enough to accept the abuse, so they aren't wanted there anymore.
This is exactly the point the article was making. A non-negligible portion of the population has no alternative that's better than accepting this abuse.
I find this difficult to reconcile with your claim that people are forced to work for certain employers.
Compare that to a person who is the sole caregiver/earner for family that is dependent on them, $20k in debt from medical bills.
The sort of person for whom a one-week disruption in pay pushes them across the line from just barely keeping up to unable to pay their utility bills.
Would you really counsel them to move on at full speed, damn the cost to their loved ones?
A coworker of mine once complained bitterly about a pay cut he was "forced" to take. I asked him why he didn't leave. He said he had no choice. I asked why. He said he had a wife, mortgage, car payments, etc., and could not afford even a week's disruption in his pay.
I suggested that he'd made all those choices himself to max out his obligations, so that he had to run to deposit his paycheck before everything bounced. The company didn't do that, he did. He was well paid, and he'd forged all those chains on him all by himself.
That sounds a lot like admitting the people whose existence you've been denying do exist after all. It sounds like you know it and have always known it. It sounds like you're telling me they don't count because they're only getting what they deserve.
I guess there's no point in me attempting further explanations - you already know all the same things I do. All I can do is beg you to take a few minutes to deeply and critically evaluate your position. Is shrugging and saying "supply & demand" really the best option we've got? Is there any chance at all that it's better to address this failure of the labor market instead?
Blaming others for the results of ones own choices is never going to work out well.
The coworker I mentioned insisted he had no choices. Of course he had choices. He could sell the car he was making payments on, and use the proceeds to buy a car he could afford, for example. But he didn't want to hear that, he wanted to be a victim and be mad at the world.
> failure of the labor market
It's not the labor market's fault he overextended his finances.
It’s all part of the race to the bottom we’re getting to live through.
(HN wouldnt let me delete this one)
It’s amazing to me that the solution presented by those who are anti laissez faire are more laws to correct the past laws.
Market transactions only happen if they are mutually beneficial. Can’t force any side as this will distort it.
Please look at the supreme labor laws found in Europe to find out what happens. To note, the Spanish, French, Italians face chronic young adult unemployment with roughly 1/4 people being employed.
I think the modern assumption is that things are distorted, and they are heavily distorted in favor of business...
"Because most people sink roots in their communities, they are reluctant to quit their job and move to a job that is far away."
The effect of this is a wash because this is also a problem for employers too. The supply of good workers is smaller because few people are willing to move towns for one - which drives labor prices up.
"Unions used to offset employer monopsony power"
Ahh, okay, now im understanding the point of this article. Lets fight monopolies with more monopolies instead of solving the underlying issues!
I agree with the points about non-competes though.
So you don't think unions have a place in modern day society?
What is the difference between a bunch of carpenters unionizing their wages versus a bunch of small and large companies all agreeing to price-fix their products? Nothing.
When employers band together to bargain collectively, we call it a “company” and it’s not only accepted, it’s so entrenched in our culture that we can barely conceive of any other way. When employees do the exact same thing, we attack them relentlessly.
Imagine if there were 10 different smartphone suppliers but all the suppliers agreed that they were only going to let you buy from 1 of them - company X. Company X would just charge you whatever the hell they felt like because you would have no other options. It would fricken suck. It would feel the exact same as a monopoly.
Now compare this to a union. Company Y's employees are all unionized and the union forbids company Y from buying labor from anyone but them. Even if it's not forbidden , new hires are typically glad to join the union too, and in some cases the law forbids otherwise. See how similar that is? It's still a monopoly - just a monopoly against a single buyer.
This is also wrong. Your straw man union isn't true across the board.
A union is by default an organization of employees to bargain together. Anything beyond that is extra.
I'm okay with unions as long as they don't engage in monopolistic behavior - I haven't found one of those yet though. For one, if unions didn't forbid company X from who they can hire from, and were okay with company X hiring pilots from any of the 10 pilots unions concurrently, then that would often be okay. Right to work laws are a super important step towards this.
Even with that step, union-monopolies and inter-union-collusion would still sometimes be a problem just like it is with companies, and that must be stamped out.
When Alice is a hiring manager and her organization is a company, we call this “how hiring is done thousands of times every day in this country.” When Alice is a worker and her organization is a union, you call it “price fixing” and “colluding.” Why the difference?
1. Unions are not often a counter balance. They are usually just additional monopolies[0] where there was none before. The airline industry is incredibly competitive but yet airline pilots still decided to unionize and price-fix.
2. Monopolies should be fought with regulations targeted at increasing competition and lowering barriers to entry - not with more monopolies. Fighting a monopoly with another monopoly just hurts the consumer and hurts our country in the global economy.
3. unions have congressmen "on payroll" too. In fact in some states some industries have state laws that forbid people from working outside of the union. Only 27 states have right to work laws.
[0] Per-company unions are the easiest monopolies to create because the scale of them is much smaller than the scale of the whole industry. Its very easy to get all your coworkers at company X to unionize and forbid company X from hiring elsewhere - and often new hires are happy to join the union too. But its very difficult for your company X to achieve a monopoly itself because it has to dominate an often much larger global market. For an example, see here: https://news.ycombinator.com/item?id=16489013
Nobody said that unions form only when the employer is a monopoly...I'm not sure what "point" you're trying to make here.
Nobody said they were...
If a firm profits, it follows that it has paid its workers wages less than the value their labor has generated. Collective action through a union brings wages closer and closer to the true value of their labor.
Both of these situations limit the extent to which an ownership class, engaged in no productive labor itself, can siphon off the value that real work produces.
Captive markets and "right to work" shops likewise both afford this class the liberty of being as parasitic as it wishes.
five programmersworking well together together is more valuable than five programmers working independently.
you're also forgetting that companies have a lot of capital investments as well such as buildings and manufacturing plants.
there alot of reasons a company should profit while still paying their employees of the value of their work
If an opposing force of similar power is not the best strategy, what do you propose as an alternative?
There are people here who are fatalistic and think that politics is unwinnable and politicians are in people's pockets, but laws can take away unions' power too, so I don't see politics as avoidable in any case.
I think framing a union as a monopoly is odd, but they become institutions in their own right, and theirs interests diverge from the wider group's fairly quickly.
The UPS union seems to want to force UPS to not invest in drones or self-driving trucks at the expense of everyone who would benefit from significantly cheaper delivery, and this isn't exactly an isolated incident.
The construction unions in NYC have secured themselves a deal where the government must use union labor, and unions negotiate a contract with their employers, who have no incentives to keep costs down because they pass all these costs on, and we get subways that are 10 times more expensive than anywhere else in the world.
We have a similar situation with construction unions & housing in NYC leading to increased costs and .: more expensive housing for everyone in NYC.
And the list goes on forever.
The trick about laws is that they are only as strong as their enforcement. The larger an organization is, relative to the enforcer, the easier the laws are to game.
Why do you say it's a wash? They may not need "good" workers and instead only need enough workers. The attraction to "good" workers is not sufficient to drive wages up.
Corporate HR policies in the modern era are essentially designed to commodify and drive down the costs of labor through information assymetry, rigid pay bands, and lawsuit mitigation.
Since most labor no longer organizes to negotiate for themselves, obviously the “Industry standard” pay bands are going to have a strong dampening effect on any wage increases even in the case of a worker shortage. Most individuals alone don’t have the power or the information edge needed to beat an “industry standard” which has essentially been decided through collusion of the largest players in the market. See the direct email correspondence of Steve Jobs and Eric Schmidt for more info.
Workers have power, too. They can refuse the offer. If you're an employer and you want good people, you'll find out real quick about their power.
Not so good for the poor chumps working in retail who've been told that unions are bad.
Enter Scrum. One of the side effects: the more effective the process, the more replaceable and interchangeable the workers are. Granted, great for planning.
If that is accurate, it makes sense that unemployment is down and still going down but wages aren't moving at all or as quickly. There's effectively "spare capacity" in the system in the form of people who were removed from the unemployment numbers but still wanted to work.
How common is this? As a child, my father changed jobs every few years, and we moved often as a result of that (until I was 10 at least). We even lived in France for three years because my dad thought it would be a good opportunity to learn about other cultures. So personally, I've never had any objection to moving for the best opportunity.
My wife on the other hand comes from a different background; she grew up in the same house in a rural town and thinks that moving hurts children's ability to develop friendships. She also believes that being close to family is more important than optimizing your career (although she has kindly agreed to move should a good opportunity arise).
Is the "stay in one spot" viewpoint becoming more common? I can see how this would lead to competitive job offers stagnating in a region if no one is willing to move into it or away from it.
It's the biggest reason people hate gentrification as well, they can quickly get priced out of an area they belong to.
This is a huge incentive behind how our system has become so broken.
In many industries the reason employers have monopsopy power is regulations that prevents new players from eating the fat profit margins of incumbent players.
telecom, healthcare, real estate, legal services ......
Just like coders see every problem as a software problem - lawmakers tend to think any problem can be solved with more laws ! not realizing they are also playing the economic game theory charade.
In this case particularly, introducing more laws is going to make is harder for new players from gaining market share.
I am not also just making this up, France has some of the most progressive labor laws written with the best of intentions - but lawmakers failed to see the economical ramification of their laws. It made employers reluctant to hire full time workers - creating a painfully high unemployment rate.
A lot of American multinationals also have most of their growth happening outside US borders, I think stronger Unions and ill thought out reform is going to result in more aggresive offshoring.
I know supply side economic arguments has gone out of fashion - but by allowing entrepreneurs to more easily embrace globalization the same way as larger companies exploit it will more comfortably increase income without causing massive spikes in inflation.
This also includes less regulation so that workers can strike without legal trouble and cause trouble for employers, by dragging the process through the court system will just mean more money for lawyers - and large companies have deep pockets anyway to fight any potential lawsuit. Think about how things like fraud are already illegal but companies seem to get away with it anyway.
The only power labor has to collective withdraw it - which painfully show up in the balance sheet in every board room, its the only language capital understands.
In fact, all those changes reduce friction and increase competition in the labor market. These should be precisely the kind of changes I would think you would support?
And KFC would include a question on their hiring form "Are you subject to a non-compete clause?" to cover their asses. If he answers yes, he is immediately disqualified and KFC moves to the next candidate. After all, it's not like he has unique knowledge for which it is worth getting sued over, unlike Lewandowski. If he answers no and it is ever discovered he had lied, he is immediately fired.
- Warren is interested in introducing laws.
- I do not agree regarding M and A - so what if companies want to combine capital ? If Labor can also combine more freely then I do not see the problem.
Who decides what is the correct size of a company ?
We just need to get the union-busting right-to-work laws off the books, and let the free market sort things out.
Right to work laws are a restriction of free, voluntary contracts between employers, and their employees. They forbid employees from demanding to be a sole supplier of labor for an employer, and from negotiating special, union-only employee agreements.
It's absurd that someone selling cabbages to a grocery store is allowed to enter into a mutually voluntary contract that makes them the sole supplier of leafy greens for that grocery, but the people working for that store are not allowed to enter into a mutually voluntary contract that makes them the sole supplier of labor for that store.
Given the vicious opposition of business leaders against the freedom of workers to enter into meaningful collective bargaining agreements, it's clear that they are not actually interested in free markets.
You mentioned letting the free market sort things out. That is exactly what Right to work laws do. They let two independent people make an employment agreement without anything interfering with them. If the union was good and worthwhile, the employees would join. If the unions were good then employees who were not part of the union would be paid less and get less benefits. If that is not the case then that union is not a good one and should not force workers to join it.
That employer already entered a contract with another group of people, that lists them as a sole supplier of labour for said employer.
Imagine if I had a cabbage farm. I don't care about corporate politics, I just want Whole Foods to buy cabbages from me.
But they won't. They already have an exclusive supplier contract for cabbages with Dole, or Sunrise Produce, or whatever.
Is this unfair? I don't like it? That's my problem. I should not be demanding that there be a law that forbids sole suppliers, of cabbages, or labour.
If I still want to sell cabbages, I should talk to Dole, Sunrise Produce, or start my own grocery store. Or negotiate a new contract with Whole Foods, after their current contract expires.
Providing services to an organization isn't a god-given right. If you don't like the working environment, the requirements of the job, the pay, or the hoops you have to jump through to sell to a company, that's your problem. Go work for a non-union shop, or start your own company.
> They let two independent people make an employment agreement without anything interfering with them.
If one of those two people entered into an agreement with a third party, that lists the third party as a sole supplier of services for them, that's your problem. The law should allow that person to make such an agreement with said third party, to the detriment of you.
That's the libertarian response. They are bad because they stop people from entering into voluntary contracts.
The socialist argument is that they are bad because employment negotiation is not done on a person-to person level. It is done on an organization to person level. The organization has more power, and this power imbalance produces unfair contracts.
This imbalance is solved when you allow employees to negotiate as an organization. Right to work laws let scabs and freeloaders parasitically leech off the negotiations of others, without paying into the system that benefits them. The only way to deal with that is to exclude them.
If you are correct then I can see why right to work laws are not so good. However, keep in mind that there are many laws preventing people from entering certain contracts. Such as laws forbidding a person to work at a company if the company doesn't want to pay minimum wage, or offering to give someone some money but requiring that they pay back a large amount in a set amount of time.
1. Make it illegal to have an exclusivity contract.
2. Make every concession that a union gets out of their employer apply to non-union employees. [1]
This would be like Dole getting a special deal with Whole Foods... And a "Right-to-sell" law would mandate that the terms of that agreement would also apply to me - even though I was not a party to those negotiations.
> I was under the impression that a majority of the workers of a company can unionise and then require every other worker in the company to join the union.
That would be the case in a truly free market, if the employer entered into an agreement with the union that going forward, it would only employ union people. The employer's not compelled to do that - it does so by choice.
> If you are correct then I can see why right to work laws are not so good. However, keep in mind that there are many laws preventing people from entering certain contracts. Such as laws forbidding a person to work at a company if the company doesn't want to pay minimum wage, or offering to give someone some money but requiring that they pay back a large amount in a set amount of time.
I agree. You have rights, some of which you can't sign away - for instance, it would be illegal to discriminate against someone based on race, despite the existence of a contract to the contrary. Contracts aren't entirely absolute, and this gets complicated quickly. There's also questions of monopolies, which libertarians generally do not oppose, but other people do.
[1] The obvious consequence is that the game-theory optimal strategy for everyone is to not join a union.
https://www.flra.gov/exclusive_representation
http://www.hr.ucdavis.edu/elr/lr/collective-bargaining/ee_re...
The tl;dr of it is that if 50% + 1 of a workforce unionizes, the union bargains collectively for everyone. Even for free-loaders who don't pay union dues.
This is like being able to opt out of paying taxes, while still receiving all government benefits. If that were legal, then our public services would collapse by next week.
That by itself is a remarkable statistic. The original purpose of non-compete laws was to honor the value of an invention or trade secret and stopping key inventors from directly running away with an invention and thus lowering the incentive for innovation.
But surely not every fifth worker with a high school degree or less in the market is a researcher or crucially involved in the generation of trade secrets. Many people are simply selling their labour, and this data point suggests that non-competes are being abused to an extreme degree simply to chain employees to a business.
I also to opt-out of Rapiscans and get pat-downs at the airport to stand up for my 'liberties'. After feeling violated after the recent 'enhanced' one where some dude rubbed every part of my bait and tackle for 2-3 min I decided to give up that fight to. No money though.
Modern America, eh?
Sorry about the sarcasm, but this kind of abuse of the contract system needs to be stopped. You can only really invalidate an individual contract (ianal) as I understand it. So the fight would have to happen for _every employee_. While case law makes it cheaper, the reality is most of these folks can't afford to higher a lawyer for a few hours, let alone a few days.