It's not though. "The support granted to U.S dairy producers represented approximately [...] 73% of the farmers' marketplace revenue. USDA data also reveals that US dairy farmers operate at a loss, and have a cost of production that is higher than what they earn from the marketplace."[1]
We're subsidizing the low cost of milk via taxes because the marketplace failed to provide both affordable milk and the ability for dairy farmers to make a living.
[1] https://markets.businessinsider.com/news/stocks/american-dai...
So the price is both two low and too high? This is not a failure of the marketplace (aka price discovery), this is the U.S. deciding that cheap milk and overproduction is in the nation's best interest and we should socialize some of the production costs.
There are logical (milk as a staple product and avoidance of shortages), and illogical (milk lobby takes too much effort to oppose) reasons for it, but it is not a marketplace failure. Remove the subsidies and the market would quickly find the higher price at which dairy farmers could produce milk profitably and consumers would purchase it.
If it is in our societal interest to produce more milk so people can eat, and the market doesn't do so, requiring subsidy, then that is a failure of the market to meet society's need.
You're conflating the failure of a marketplace to function properly (as in smooth functioning of supply, demand, liquidity, etc) with the failure of the marketplace to provide social benefit.
The free market can empower to make their own decisions on what they think is moral. In most cases that's a much better choice than the government deciding for you.
Via the subsidy the U.S. is forcing everyone to spend a small portion of their income on milk production.
Or some people don't have the money to spend on it at all. This is the fundamental issue with using "willingness to pay" as proxy for "utility consumer gains."
But this still doesn't address tail risk like war or disasters. Importing 100% of the nation's food might make sense from a market POV but is a significant risk from a strategic POV. Markets do not seem to handle low probability events very well.
There are many better ways of accomplishing the geopolitical goal of maintaining enough food supply and production capacity to keep people going in a crisis.
US is a net exporter of food products.
Do you know who lacks food? China!
Milk consumption dropped and we need to drop financial incentives for it.
The program was developed in response to shortages of milk during wartime.
1. Maintaining the political support of farmers
2. Maintaining surplus food production capacity in case of some contingency (e.g. war).
The same is true for many developed countries. The US government actually produced “government cheese” with surplus milk to help support dairy farmers, providing the cheese to schools and welfare recipients. The EU has also experienced subsidy-related supply surpluses, including a “butter mountain” and a “wine lake”.
There's one issue with supporting individual products - government cannot change these rules with the consumption patterns of individuals.
As such - it's not the subsidies that are the primary issue, it's the fact that the government decided that milk gets the subsidies... but almond milk gets the full market price.(As in - vegans are actually financing carnivorous american lifestyle more, than the other way around)
In any case, almond farming in particular is just awful.
Failing to meet people's needs is definitely a problem, but not a uniquely market-driven one. If there is a specific phenomenon which causes markets to fail in the delivery of socially desirable goods, it would be good to come up with a specific description and corresponding term of art.
> 'Market failure' is a term of art, and it's generally best to avoid redefining terms of art unless there's a very compelling reason to do so.
The person conflating "market failure" with what they were talking about is the GP.
The original comment was about the market failing to accomplish a goal, which is a perfectly idiomatic usage.
>"... they'll never think a failure to meet society's need is a market failure..."
If they only meant to talk about "market failures" as such, then they are guilty of pedantry
That dairy producer's lobby is quite powerful and politically important to both parties. See the key role they played in the politics Trump was playing around NAFTA renegotiations last year.
Apparently HN does not agree with me, I challenge my downvoting fans to find citations for "socializing losses" in the way you're talking about, prior to 2008.
"Lemon socialism" (gov't bailing out lemons) existed, but that actually has a different tone entirely.
The long and the short of it is that the person you originally responded to was correct to call the behavior "socializing costs." You were incorrect in your response where you claimed that a subsidy is not "socializing costs," since that's exactly what the term means in common parlance. The downvotes probably come from your not recognizing and admitting your mistake.
The title translated in English reads as
"SOCIALIZATION OF THE COSTS OF THE DEVELOPMENT OF THE LARGE INDUSTRIAL ENTERPRISE"
https://www.jstor.org/stable/41630721?seq=1
"Socializing costs" is a widely used idiom, at least in my language, it might be true that America is miseducated to the meaning of socialism, but subsidizing the production of goods and services it's a form of socializing the costs in a non socialistic way (in which the state produces those goods and services)
Social is used in this case to intend the society, public money, people taxes.
The exact phrasing of "privatize the profits and socialize the losses" seems to have become popular in 2008, if not actually originating there, but the concept of the problem is much older; its essentially a new phrasing of what has both before (and even since) popularly been phrased as "Socialism for the rich and capitalism for the poor" [0].
But "socialization" for distributing a cost/benefit outside of the participants in a transaction, and "privatization" for concentrating it there is a common term that is disconnected from "socialism" except that their shared "shape" is not mere coincidence, but because they have related-though-not-derived-from-each-other meanings.
> And it speaks more to American's mis-education about what socialism is (or its history) than anything else.
That's true of the older form (though less so the newer, though it derives some rhetorical utility from the similarity in words), though not in the obvious way. At least the earlier form was coined and is still popularly used by people who know very well what socialism is; it deliberately and directly leverages the way (not just the fact, but the specific arguments used) that the people who support what it criticizes have poisoned the well against socialism and misleading used to promote capitalism, turning it against the system.
[0] https://en.wikipedia.org/wiki/Socialism_for_the_rich_and_cap...
While true in many cases, I don't think it's always initiated this way. Many subsidies start as a social good and then perpetuate based on lobbied interests.
My favorite example is the subsidy for alpaca wool. This was started as a social good to ensure there was enough cold-weather gear to fight the Korean War. However, this subsidy continued into the mid-1990s.
But this isn't to say subsidies are bad in and of themselves; rather it means you need strong leadership willing to make tough or even unpopular decisions. The recipient's opinion should have very little bearing on whether the subsidy is an overall good.
E.g., the market decides to off-shore manufacturing. This is good short-term as it leads to lower prices for consumers. But it's also potentially a failure at a national long-term level as it has reduced our manufacturing capacity. The short-term bias of the market can adversely affect long lead-time strategic interests. See: the inability to quickly pivot to manufacture medical goods in a pandemic or military goods in a large-scale conflict.
These types of market failures are what lead to the socialization that you mention.
That isn't a market failure. It's just a recognition that the economy is global, not national. The market doesn't optimize for the benefit of one nation against others. As for "short-term bias", the market just reflects the biases of the people making the decisions—the same as any other system. If people are inclined to stockpile medical supplies or materiel for self-defense, the market will support that too.
The market's only real "failure" is that it's too democratic for the liking of certain individuals who feel they have a better idea of how a society should be organized than the poor, ignorant, gullible masses that actually comprise that society.
True, and good point.
>just reflects the biases of the people making the decisions...The market's only real "failure" is that it's too democratic
This is a failure if you can agree that people are less than optimal at making decisions, i.e. that humans have biases that work against their own rational self-interest at times. Meaning the market can exacerbate faulty decision heuristics. Behavioral economics is full of examples of this that classical economics simply labels as "anomalies". I tend to think the socialization aspect is an admonition that markets don't always work best when humans are at their most emotional/least rational.
Most people excluding the most ardent anarcho-capitalists recognize there are times when a completely free market doesn't serve the best interest of society (e.g., healthcare, monopolies). Sometimes I think people get it inverted and think society serves the market and not the other way around.
In my opinion the best interests of society are best served by letting people make their own decisions regarding themselves and their own property, and not by aggression or deliberate attempts at social engineering. I tend to be pro-market on average but really it's not the market I'm interested in so much as liberty. I also take a very expansive view of what the market entails; not just materialistic concerns but the full spectrum of human preferences. Does it always lead to a perfect outcome? Of course not. No system comprised of fallible and incompletely-informed human beings could possibly do that. It's just better than all the alternatives.
All the human failings which prevent markets from achieving optimal results are also problems for the various political schemes that aim to regulate them, magnified by the introduction of force as a "legitimate" means of achieving the desired end state. (It's ironic, for example, that people turn to governments to save them from monopolies—mostly government-created monopolies—when the government itself is the biggest monopoly of them all.)
In the end the real goal isn't to make people "happy"—we could do that much more easily with drugs. Rather, it's to ensure that people can live their lives the way that they choose, so that they can seek happiness, or purpose, or whatever else means the most to them. The fact that people make choices that (in someone else's opinion) probably won't make them happier is not sufficient justification for taking away their freedom to choose for themselves. I happen to think the moral, principled position also happens in this case to be the one that leads to the best outcomes for the most people from a purely materialistic point of view, but this is merely a happy coincidence; it would still be the right thing to do even if it resulted in abject poverty.
In the end getting back to the OG topic - it ends up being forced social engineering, instead of freedom and social fluidity. People who can only et paid 6 figures by virtue of geography are going to shout and scream about COL being awesome. People who are awesome get shafted. And humanity's progress is limited, because we get sub-optimal use of resources.
PS: Hi fellow libetarian.
I think this is the cynical view that paints it in an arrogant light. The alternate is there is an acknowledgement that the system is less than ideal and could be improved.
>People who are awesome get shafted
I mean, isn't this par for the course in any group environment? If you're healthy, you get shafted by paying more into insurance than you use. If you're wealthy and subjected to a progressive tax structure, you get shafted by paying a disproportionate amount of taxes. Sometimes I wonder if getting shafted is part of the cost of living in a stable society. You agree to carry a load so that in the event you need it, somebody can carry the load for you. Game theory shows that this leads to more optimal solutions as long as you can keep free-loading within certain bounds.
I used to be a staunch libertarian but came to realize society doesn't work so well when it's structured to only let the top percentile be successful. At a certain threshold, the top percent will always be successful. The utilitarian in me is concerned with finding a way to may the most people successful, which means gearing some policies to the mean rather than the high performers. To that utilitarian perspective, I think it's a more optimal use of resources if you consider human capital one of the more useful resources.
I've noticed libertarians tend to be those high performers who would tend to benefit (or perceive themselves to benefit) from not being held back. I personally moved away from it because most of the discussions seemed to lack nuance. Even Ayn Rand collected social security when her health started failing...
Because it is arrogant to say that vegans must subsidize milk production(which they do), it is arrogant to say that an atheist must pay compensate for Church tax exemptions... and the farther away the taxing authority, the more arrogant it is. The biggest issue that I have with my taxes here in US - subsidies for military to fight a war on behalf of the Saudis in Yemen.
If you're willing to pay for or contribute to something bigger/better - then why use tax for it?
> I mean, isn't this par for the course in any group environment
When you voluntarily join said environment - sure.
Funny... Being gay, growing up in Lithuania and living on $10 per week(between me and my mother) - I got to be libertarian well before I got to earn those 6 figures.
PS: I also detest Ayn Rand.
I think everybody has policies that their tax dollars support that they don't agree with. That is part of the compromise of living in a society. I don't think the solution is to have individuals decide on each line item they are personally willing to support unless we want to be a yeoman farmer society. Modern society is too complex and I think the ship has sailed on that point.
I do think there is room for middle ground. I think it would be useful for people to see, say, on their tax returns how much of their individual tax money goes to each high-level government agency. This would bring it out of the abstract and connect them more closely to those policies so they can adjust them to their particular values by voting at the polls while reducing the overall information budget they have to digest.
You stance optimizes for liberty as you rightly point out. People, however, generally want a society that balances liberty and stability. Laws and policies are enacted to try and find that right balance. It's similar to the centralized banking model vs. a completely laissez-faire economy; it's enacted to provide stability, perhaps at the expense of some liberty. I don't think people inherently have an issue with the government having a monopoly as long as they have a say in how that government functions. In a well-functioning democracy, the people are the government so the idea of a governmental monopoly is diluted somewhat.
Stability is certainly a worthwhile goal, to a point—in the end nothing alive can be completely stable—but there is no reason why it must come at the expense of liberty. The main issue is negative externalities, which are already addressed by the Non-Aggression Principle; i.e. your liberty applies to yourself and your own property, not other people or their property, unless they consent. Libertarian society is not a free-for-all. What little scope for petty conflict remains can be addressed adequately through social means rather than force.
> In a well-functioning democracy, the people are the government so the idea of a governmental monopoly is diluted somewhat.
Even in the ideal model, "the people are the government" in approximately the same way that individuals cells are a human being. Part of a vast collective, in other words, with no individual influence or control, retained only to serve the collective, and ultimately disposable. That's fine for cells in the body but a horrible way to think about sentient beings.
I do think there are times when they are juxtaposed. "The Constitution is not a suicide pact" is the cliché. Ideally they can coexist, but for the libertarian ideal to work, humans have to be rationale. I think we are anything but rational although we like to pretend we are most times.
>unless they consent.
That consent, to a certain extent, is implicit on being a willing participant in a free democratic society. It's part of the social contract.
>"the people are the government" in approximately the same way that individuals cells are a human being
I don't think I agree with this analogy. A collection of human cells cannot volitionally decide for the human being to become something wholly different. A government, by the people, can change it's entire makeup to serve it's changing values. When I say the people are the government, I mean the people in a functioning democracy have the power to make the government reflect their value system. I feel like you are misinterpreting my statement by reading it through a individualist/collectivist lens.
It's interesting to see this sort of rhetoric re-emerge after it took a long break after the '08 recession. Of course, the idea that the market is "too democratic" is absurd. At least, I haven't seen a democratic system where 1% of the population gets 40% of the vote.
As long as "willingness to pay" is the market proxy for the utility a consumer gets from a good, the market is not "democratic".
In a pure voluntaryist market system everyone gets 100% of the vote (i.e. veto power) when it comes to how they use their own labor and resources. If one has acquired more wealth then one has more options available and more decisions to make, but still doesn't get any direct say in how other people use their property, no matter how rich or poor they may be. This is far more egalitarian and in keeping with the ideals espoused by most democracies than the idea that every person's freedoms and property are subject to a glorified opinion poll.
Yeah, so uh... not democracy.
I'm not going to relitigate the entirety of Anarchy, State & Utopia in the HN comments section, but suffice to say that these ideals are far from objectively "egalitarian" and the idea that other's negative, non-inferential side-constraints must be sometimes violated in the context of social cooperation is actually foundational to republican (as in the political philosophy) thought.
We used to consume much less milk pre-WWII. And we are consuming less and less cow's milk.
It's dubious on many levels, but has its defenders.
"Alternative" products like duck eggs, water buffalo or goat's milk, etc. do not count, so there is some room for market diversification there, I guess.
It has the net effect of keeping dairy prices at what's seen as an acceptable stable level that also keeps dairy farmer's in business, at the expense of diversity in the marketplace and access to new farmers.
I think most Canadians feel that the supply-side management of dairy and some other food products works for us fairly well, and that the Taxi license system doesn't. I guess that means the reasons for them working well or not are something other than the concept of supply-side management?
When you go making your own homemade cheese or yogourt though, then you notice how painfully high our (consumer) milk prices are. And when you taste higher quality milk in European countries, and notice the lack of quality milk at reasonable prices on Canadian grocery store shelves, it starts to be a bit more frustrating.
Quality here is not a function of the market being more free.
It's a function of a better food production chain
Instead of competing on prices many food products in Europe compete on quality and locality (small areas that produce some unique product of extremely high and renowned quality: Champagne in France, Parmigiano Reggiano in Italy, jamon serrano in Spain, etc. etc.)
That USD$2.80 would result in PPP $4.20
As for whether anyone should have a problem, you're welcome to have a problem. It's a free country. Whether that will lead to an outcome you desire is independent, though.
de jure != de facto
Companies are legally prohibited from stopping unionization in the US. But that's not how it works in reality.
Most people work in an 'at-will' states. This means a company can terminate employees at any time. Want to unionize? Have at it.
All an employer needs to do is find is some company policy a person is violating (and trust me, EVERYONE is violates their company's policies from time-to-time, if only because company policies are so verbose and onerous). Your work badge isn't immediately visible? That's a policy violation. Go over your lunch a few minutes? That's a policy violation.
The company fires the unionizer. Now the onous is on the fired employee to prove that they were fired for unionizing. As long as the company doesn't say "I fired you because you were unionizing" (which they would never do), you got a lengthy legal battle on your hands.
Now where do you take your battle? To the NLRB. Now you have to fight against regulatory capture and political appointees who are hostile to the very idea of organized labor. Even if you do win, it will cost untold sums of time and money. It will be years before everything is adjudicated. At that point, what does it matter? The unionizer has been forced to move onto another job in the interim (and hope that the other company doesn't avoid hiring the person because of the labor complaint. And if the potential employer does? Another legal battle that the unionizer has to enter and prove).
1.) Getting rid of at-will employment 2.) Have a NLRB that is functional and actually protects labor 3.) Lower the legal threshold for proving illicit anti-union activities 4.) Give teeth to laws protect that unionization and uniformly enforce those laws no matter the political party in power 5.) Staff the upper levels of the NLRB with career civil servants, not political appointees
a. eliminating workplace one-party consent recording laws in every state
b. public advertising campaign + bounty - record your employer for violation of labor law and get paid a bounty if it is proven in court
As an anarchist - why are people not willing to start a co-op?
Open your refrigerator, look in your closet. Can you say with certainty that you voted with your wallet by only supporting companies that adhere to your values? Today’s economy has too many interactions to have any confidence about how you vote with your wallet. In this case complexity, not religion, is the opiate of the masses.
Most people’s lives are too complex and busy to “start a co-op”. I know the counter argument is probably “then they obviously don’t care enough” but that’s the pragmatic answer
Of course there is no law mandating Walmart provide a service. There are, however, laws governing how Walmart must treat employees. Part of their bad reputation is that they run afoul of these laws.
I know the anarchist view is to just decide not to shop there. My point is that in a pragmatic sense, consumers in a globalized economy cannot assess all the information to do so, even if it was freely available. The counterargument is that regulators are the better alternative, which is why the Dept. of Labor has fined them in the past to correct that behavior.
Why should a voluntary, consensual signing of a contract be made illegal?
Unions aren't mandated by law anywhere.
The “just find a different job” position is the trivial case that doesn’t really add much to the discussion
Union security clauses cut both ways; they also require employees to join said union as long as the contract is active. You can't perform the job and be non-union.
"If you don't like the job, don't take it." It's like the argument when discussing child welfare policy where one side says "Don't ask society to help; if you need help, don't have kids". Or in healthcare policy, "Don't want high medical bills? Buy better insurance." While true, it is just a way to elevate above the actual problem without providing a satisfactory policy solution.
I guess I don't see why an employer requiring you to join a union upon joining the job is
a. a mandate (it's not) b. at all different from any number of things that an employer can require you to sign off on to start working at a job.
Union membership is "mandated" in the same way that when you accept a job that requires a 40 hrs/week, you are "mandated" to go to work.
> the actual problem
What is the actual problem? I don't see union security clauses as a problem, it's basically the only way collective bargaining can solve the free-rider problem and generally benefits the worker.
The problem is many people don't feel they should be forced to pay into an organization that doesn't reflect their values in order to have a job. In some ways, it's similar to the notion that many people don't feel they should pay taxes that go to support something they don't personally support (e.g., abortion, war de jour).
Right-to-work is a way around that in many peoples eyes. In my opinion, it's a policy that takes advantage of people's short-term bias.
Saying "just don't take that job" is like saying "just don't live in that society". It's not wrong; it's just not particularly helpful
I'm unsure of the relevance to "freedom of association" as a negative concept, though. You are still free to associate with who you wish, just as corporations are free to not associate with you if you do not join a union.
If we are going to transform a negative right to not join a union into a positive one, there are many other things I'd like to turn into positive rights first.
I don't think it is negative as a concept. I agree that, in theory, it is best to always err on the side of more freedom, not less. In practice, however, it can become negative if you think people don't always act rationally. Which is why I don't know if the right to work is good policy; part of me feels like it takes advantage of humans short-term bias, and leads them to limit their own long-term rational best interests.
It's very much like the social media debate going on right now. Part of me just wants to say it's better to have a completely open marketplace and let the chips fall where they may. But another part of me feels like there is a very real danger this will hijack human psychological shortcomings in a way that is not good long term. Maybe the cliché that "people get the government they deserve" is the closest I can get to reconciling the two.
Companies have been fighting unions for a century.
In some cases leading to massacres:
It's one thing to not show up as part of a strike, it's another to make life harder for those that do and commit computer crime.
This is illegal in most countries, no?
I don't believe picketing is illegal as long as certain conditions are met (not blocking egress, etc.)
Yes - union contracts may include a ban on non-union workers. As long as that's not mandated by law - it's really none of our business.
I would potentially be on board with outlawing such agreements altogether, but it's not fair to restrict unions to be unable to make exclusivity agreements when every other type of organization can.
If, as an employer, you would prefer not to adhere to strong labor protection laws in the market you desire to operate in, you are free to find markets more to your liking.
The richest 1%, with over $1 million in wealth, own 44% of the world's wealth, but we're going to keep chipping away at the middle class?
The hollowing out of the American middle class over the last 40 years due to globalization is what the end result looks like, hence why those in the Western world should not support further globalization efforts (including outsourcing offshore).
Just like an airplane, oxygen mask on yourself first, then help those around you.
https://www.npr.org/sections/thetwo-way/2015/12/09/459087477...
Middle class = 0.67(median household income) - 2.0(median household income)
Was there something wrong with the traditional definition of middle quintiles?
The whole point of having negotiating power is they can't just "stop" it. Because you, as a union, collectively have enough power to force them to the table to negotiate.
Whether or not the company has a problem with unions is basically irrelevant.
I don't know why people keep saying this. Unions themselves convinced most that unions are a bad thing, through their behavior. In my case, it was watching the UAW and Teamsters for a couple of decades.
I should have been more specific to say 'unions with bad reputations are often culpable for those stereotypes'
FWIW I don't think unions are a silver bullet. I'm just pointing out that if you look at it from a neutral/uninvested party the bias is weird.
Of course the comparison doesn't quite work because unions are not standalone entities - they are linked to government or companies. If they were independent the labor organizations would be guilds.
To be clear, I deliberately use the word "can" in my previous statement i.e., they may abuse their power, but also may not
Unions aren't necessary but can help. I've worked in positions where the courts provided the same benefit via a different mechanism.
Edit: I accidently had "are" for "aren't"
* Better treatment against the rampant ageism in our industry (eg. access to lawyers when IBM decides to do mass layoffs of people above a certain age...)
* Guaranteeing reimbursement for self-education materials, time off for self-education purposes like conventions and hacker spaces
* Better treatment for H1B visa holders, a political push to stop the abuse of workers who cannot leave employers or risk losing immigration status
* Support for and communal funding for OSS
* A group pushback against flagrantly unethical, insecure, or straight up illegal behavior on the part of companies (eg. that non-poaching agreement back in the day that kept people's wages from being as high as they should've been)
* Standard establishment of making sure remote workers are paid for the value they bring to the company and aren't stiffed purely because of where they are geographically located at the time.
Ageism is on the worker's shoulders, but those workers are also managers who choose to do bullshit like lay off workers above a certain age across a company. We need ways to protect ourselves from that.
Agree with the second point on ageism
There is no "might have been". It's pretty much a matter of historical record that labor unions were fiercely anti-immigrant.
Judging by nativist comments even on a heavily moderated forum like HN whenever the topic of H1-Bs comes up, the many, many immigrants in the tech industry would be have to be bonkers to trust that a tech union wouldn't become nativist.
The old stereotype of nativist unions is just that. It's true in some cases--see the Teamsters, who also supported Trump, or police unions--but the actual union movement in the US has long fought for better treatment for immigrants.
https://www.seiu.org/cards/solutions-for-immigration-reform-...
I don’t know your location, but in the US it’s already illegal to discriminate against someone’s age if they’re over 40
If outsourcing is the threat isn't the potentially outsourced threatening a strike kind of like responding to a mugger by putting a knife to your own throat? Except I think that might be more effective as a threat as it makes the mugger think of you as unstable and irrational.
As an aside, I don't get why deng tolerates comments like yours, but will mod an equivalent comment that even moderately right wing. If we want real discussion here, it doesn't start with a reshashed Eugene Debs speech.
E.g., I’ve previously worked for an automotive manufacturer on controls software. I was attached to the maintenance team. The design engineers were a subset of the entire engineers population. In other places I’ve worked, R&D was mainly done by scientists and physicists, not by engineers who served to support the R&D effort
Just because I'm in Atlanta doesn't make me inherently worth less than my peers in SF.
Whether this is good or bad is beside my point, as are what other second-order effects may arise. I'm simply pointing out, "everybody in the world gets paid SV rates" simply isn't on the table. So don't go into this process expecting that outcome.
I predict wages will stratify based on what kind of company you work for, not where you live. FAAMG will still pay top dollar. Best of luck if you work doing coding for, say, the Weather Channel.
If suddenly the supply expands from the Bay Area to all of the US, that changes the equation. Don’t forget that guy in Atlanta who is equally as talented as you, but willing to work for 20% less than you make.
Supply and demand ultimately determine the wages, assuming the job is filled at all, but what you're "worth" to the employer does serve as an absolute upper limit on what you can expect to be paid. If no one is willing to take the job at that price then no one will be employed and the job will simply go undone.
And that's a good thing.
I think the mistake you are making is assuming that your salary represents your worth to the company.
Should a person be charged SF prices for groceries when they're living in Atlanta because they're getting SF pay? Clearly not. You can't have your cake and eat it too.
Your reasoning makes no sense. It's a choice to live in a city that lets landlords dictate which buildings can be built. Atlanta and other cities are unconstrained for new housing development.
SF policies are a tax on its non-homeowner residents.
You shouldn't be entitled to a differential just because your city doesn't build new housing fast enough. That has no bearing on the work your employees perform.
You can if you have sufficient negotiating power.
Unions are good to protect employees that don't have negotiating power (e.g. factory workers), otherwise companies would take too much advantage of them.
I am not sure this necessarily applies to knowledge workers, especially if their work can be done remotely to some extent.
And I am not saying that I am against unions; but like with everything else in life, everything comes with pros and cons.
I have personally witnessed several examples of unions using their position to drive their political agenda at the expense of well-intentioned companies (most of it in my home country, Italy, in the 1990s and 2000s). So, beware: unions do not solve everything; they bring their own set of problems.
> company's goal is to "extract" from each employee more value than his/her/their salary. If a company manages to save on a salary because the employee doesn't have much negotiating power, good for the company.
If that's a companies goal, then an employee's goal should be to counter that, and Unions are a line of defense against companies treating an employee as a resource to "extract" from.
Free markets are good and all, but companies leveraging their outsized power against individual people shouldn't be surprised nor able to prevent individuals from working to put that power in check.
I am not sure this necessarily applies to knowledge workers, especially if their work can be done remotely to some extent.
These two paragraphs contradict each other.
Work rules are another way. My dad told me about the union work rules at the factory where he was a white collar employee (R&D department). I'm reminded of those stories when I've tried to get someone to do some programming for me in a large organization.
Granted these rules have their origins in preventing abuse, or replacing skilled labor with unskilled, but they existed nonetheless and were part of running a business.
I think the opposite is true. The companies try to stop it precisely because it will weaken the company's negotiating position. I personally think unions have their place, but from an employers perspective there is little incentive to be pro-union (unless you are just arguing from a moral -- not pragmatic -- view).
> So naive.
> In an ideal, utopian world? Maybe it would work this way. Maybe.
> In reality, your compensation is a function of your negotiating power.
> ...if you accept that you live in a market-enabled society, your salary is at stake, too.
This logic horrifies me because it applies equally well to wage disparities based on protected classes. We have collectively decided as a society that this argument is faulty and unethical.
That doesn’t mean remote work should get equal pay. It just means that your argument doesn’t hold.
I dunno if GP meant to imply that, but this is kinda the key flaw with the "equal pay for equal work" thing. most engineers earn way more than the median income. this is a direct result of existing in a market-based economy where wages are determined by supply and demand rather than some abstract notion of fairness. you can't complain that the payscale is different for atlanta vs sf while maintaining that it's totally fine for you to make 5x as much as the cashier at 7-Eleven.
It's that the "equal work" part? Comparing one cashier to another cashier (assuming same hours, same responsibilities, etc) is equal work, so is part of an "equal pay for equal work" conversation. Comparing a cashier to a software dev is a wholly separate conversation.
Markets currently play a massive role in determining prices across our entire society. A wage is a price paid for an individual's labor.
Labor markets are not perfect. No market is (despite the wailings of the ideologues). We try to fix these issues with specific policies and regulations. There is plenty more work to do here. But if you are advocating for the abolishment of labor markets entirely, I would love to see the details of your proposal. I don't know of any society today that has managed to do so.
Perhaps the assumption in the original comment is that legally restricting market discrimination for wages by region may not be practical and / or would have significant harmful side effects.
I would need to give the idea more thought. It certainly seems a far more complex and less clear-cut matter than the existing protected classes.
I can do a better job than many in SF for half the price. Have already spent close to a decade waking up early for US west coast meetings.
Get the feeling that a day of reckoning is coming for those clinging so dearly to their location based earnings. I've been saying it for years about Australia being so constrained with cities like Sydney and Melbourne which magically have some of the most expensive land prices on Earth. Getting away from these places and making your own digital way is truly a freedom to behold.
That clause at the bottom of a job page: "no discrimination based on citizenship, origin, etc..."? Just corporate/legal mumbo jumbo.
This is how it feels for the non-elite, non-American. In a weird way, the pandemic is leveling the playing field. Democratize opportunities, increase competition, decrease wages- plain supply and demand.
The non-elites everywhere are getting hosed.
That's a good point, because no other groups of people only complain about issues when they start to affect them personally.
I get the argument that "well I'm doing the same work here or there, why should I be paid differently?". But this is what things like outsourcing are intended to do isn't it? To get the same work done for cheaper.
This quickly falls down once salaries and payments become public. In economic parlance, when everybody has all the information and the job market becomes efficient.
Or really, use any other marginalized group with limited negotiation power and see how your comment turns out. Only difference is remote is not protected class, but that is simply an implementation detail.
Everybody argues this issue from the POV of their very own salary and it is understandable. It is fair to say you think you are at the good end of the deal and you like it there. But the moral argument about equal work should be equally compensated is nigh unchallengable.
https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
I don't the think premise is at all clear, never mind 'unchallengeable', especially if you take 'be equally compensated' to mean 'have the same nominal cash pay'.
Why is 'nominal cash' equivalence superior to 'purchasing power parity' from a moral perspective, for example? Is it moral for some workers to receive rewards that are richer than others (in terms of what they will buy) purely on the basis of local economics?
Why is it moral for workers in locations with generous government programs to receive the same nominal cash pay as those who might have to pay out of pocket for some of those same services in different locations?
"All other things being equal, equal pay for equal work" sounds reasonable, but when you're not holding all other things equal, the moral position is more tenuous.
Apple prices have converged quite a lot - but note that the labor content of their products prices changes very little as everything is made in same factories in China.
McDonalds (another multinational with a quite standardized product offering across markets) charges very different prices for the same product depending on local markets.
If the problem is that we want to ensure some kind of equality of outcome that is ill posed
1. Companies are not arbiters to define what that outcome should be. In fact, any such attempt boils down to the argument that the current status quo is the natural state of things and everything should stay that way. Trying to come up with a definition for local economy or local purchasing power is simply an exercise in encoding bias.
2. Plenty of products and services are priced without differentiation. For instance in the case of internet services this is probably close to 100%.
Again, all these has nothing to do with selling X hours of labour for Y hourly rate.
That's nonsensical. You can trivially find examples of where the same goods cost different prices in different locations.
Here's a really simple example. $5.79 will buy you a McDonald's Sausage Egg McMuffin meal in Montgomery AL. The same menu item is $6.71 in Los Angeles CA.
The same money has less power to buy goods and services in Los Angeles than it does in Montgomery. You know this intuitively; the same way you know that a gallon of milk is more expensive in New York City than it is in Madison.
I don't know why you're tying yourself up in knots to come to the opposite conclusion.
You can come up with your own definition of what you consider local (neighbourhood, city, county, state, country?) or cherrypick a basket you want to use as a base (McD), but that simply reflects your biases.
Remote = lower costs. Female ≠ lower costs.
I’m not arguing against equal pay for equal work. I’m arguing that it’s a bad analogy to compare being remote with being female.
It also depends on what you think about wage gaps and why do we need equal employment laws in the first place?
I’m arguing against comparing remote work to the gender pay gap.
Being female is not comparable to being remote.
Most people have more choice about where they live than their sex or gender, for example.
I assume you are not arguing that sex and gender are just preferences.
It is not comparable from a negotiation power point - negotiation is all about what you can and can’t trade.
Therefore whether something is a choice or not is absolutely critical to any negotiation.
Religion is a good example to consider. Can you change it? Clearly some people do. What is the cost of changing religion? Obviously very different from person to person, very different from even the concept of changing sex, and very different from changing location.
Geographic location is not a category for protection, nor is it going to become one. First, it simply isn't something that can't be changed, and second, our elites in general want us to be able to move around freely, so they aren't going to make it one.
Point is, just because an outgroup can be discriminated (legally) it is not fair morally.
Of course it's not a protected class, and that's by design. Protected classes are things you cannot change (with the exception of religion), and thus you shouldn't be able to discriminate based on them. You wanting to live in Kansas doesn't (shouldn't) afford you some protected status giving you an artificial pay increase.
That's right, I suppose:
But, why do I have more negotiating power, if I can sufficiently fake an address in San Francisco?
This is just a way for employers to exert their power and reduce salaries across the board. It should be resisted.
So, what exactly are you saying then? Should there be checks in place to ensure salary negotiations between an employer and employee be treated differently than two big companies hashing out milk prices or not?
If not that would certainly be a very naive position which gets increasingly problematic, quickly, the more lopsided negotiation power and money is distributed between the two parties. A human centric society has to provide checks for that. An understanding of what we want can for example be driven by articles such as the one linked and is instrumental to the process.
When I took my remote job 8+ years ago, it was a big pay increase, plus my expenses went way down.
Feel bad for the prop 22 stuff and gig economy, because they are part of the same struggle. It never ends.
Ahhmm, no. Where does negotiation power stem from? Is it a skill? No. You are a product much like eveything else in this economy and you price is a function of how much you cost (living cost, heavily depedent on location) + supply/demand trends. Yes, your attitude and negotiation skills can impact your salary but only by a bit. You can't get your salary to tripple by negotiation. Why? What is the force that doesn't allow that? Supply and demand of other people who will do the same for less.
Thus I argue the trend will be a big decline in salaries for remote jobs in places like SF or London, but a very slight increase in salaries in places like india. The market of remote workers is going global, thus the price for this product will adjust accordingly. There will still be some variation in the salary depending on where you are, but the global min-max difference will decrease
> You can't get your salary to tripple by negotiation. Why? What is the force that doesn't allow that?
I can't triple the speed at which I can throw a baseball, either, because of physics, but it's obviously a skill I can improve relative to other throwers of baseballs.
However, even if that wasn't the case, even if what you say is valid, these are inherently limited jobs so it's not a solution everyone can apply.
Depends on the law. If I'm female, and you're male, then equal pay laws may force it to be the same for equivalent work.
Most of the rest of the world forces business to compete for labour - which is as it should be.
Jobs, not people, should wait.
It already is, despite all the press claiming it isn't. In summary the difference in pay is caused by different choices men and women make in how much they value flexibility at work.
See: https://harvardmagazine.com/2016/05/reassessing-the-gender-w...
If the rest of the world want to send us stuff, that's a benefit not a loss.
It was the moral thing to do, and it happened despite the men it affected.
https://www.fb.org/market-intel/how-milk-is-really-priced-in...
I don't understand why you think that you are in opposition to the author.
Some people, when working on site, make more than other on site employees because they're "highly employable".
Bottom line is, being "highly employable" is the only relevant factor in negotiating, remote vs. on site is irrelevant, and you shouldn't let companies to bluff you otherwise.
If they like you a lot more than the other candidate, who just happens to live in a high cost of living location, are they really going to pass you over to hire the other candidate, if you demand the same wage that candidate would receive?
Capitalism isn't just for companies, you know.
If you're not "highly employable", get highly employable and negotiate knowing your worth.
If there is ever a trend of a significant number of developers moving to low COL areas, then every recession, reorganization, merger, etc. becomes a potential situation for employers to threaten your job or relocating to Trumpville, Nebraska.
This is itself a bit naive. In a basic market with voluntary transactions the distribution of the gains from trade is undefined.
If your labor sells for $100/hour and costs you $10/hour to produce (basic food, water and shelter) then it is a perfectly legitimate equilibrium for the company to pay you $10.01/hour and take the other %89.99 as profit.
It's only through politics that we can make sure that the gains from trade are evenly split. The math of markets doesn't define it.
That's clearly not the case since my employer could legally pay me $15/hour for my work, but pays significantly more. They do so, because they are competing with other employers for talent.
Yes, but the RESULT of the two-way competition where both employees and employers are competing is undefined in a simple model of the market.
If you work as a cleaner or an uber driver, you may find that even though you generate some surplus, you don't actually get any of it (or you get almost none of it)
False. Competition from other employers can do this too.
Yes, it CAN but whether it actually does depends on the details. If you are a cleaner or an uber driver, you might generate some surplus but you might see the other parties take all or almost all of that surplus.
OK, but if you go in front of the employers as individuals, 1 might gain, but everybody will lose. That's not how work relationship works.
I get that on HN everybody feels like a genius and individualism is rampant. But that's a fertile ideological environment for mass exploitation.
Tech workers are just workers first and foremost, and the same dynamic of the labor market are true for tech workers, as they are true for anybody else.
Exactly. Based on talking with others about their salaries, I usually seem to be one who gains. So I will oppose efforts to normalize pay for a given role because I will lose and probably take a pay cut.
There's also nothing wrong with paying more or less for a job. Some people are better workers, period. This is true even if they have the same job title.
So naive.
In an ideal, utopian world? Maybe it would work this way. Maybe.
In reality, your compensation is a function of your negotiating power. Some people, in fact, manage to get the same pay even when working remote, because they're "highly employable". Others don't.
And let me add: I almost agree that remote work shouldn't necessarily command the same pay. A company's goal is to "extract" from each employee more value than his/her/their salary. If a company manages to save on a salary because the employee doesn't have much negotiating power, good for the company.
This is not to say that a company should do anything it wants, far from it. It simply means that if you accept that you live in a market-enabled society, your salary is at stake, too. You want to pay $2 dollars for milk, instead of $20? That's thanks to competition between companies. That's market forces at play. You want it there? Accept it on salary negotiation too.