
Iron law of wages - skanderbm
https://en.wikipedia.org/wiki/Iron_law_of_wages
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bognition
This seems to describe disparity in tech worker wages across different cities.
The value provided by an engineer in SFO is almost definitely not 2x what an
engineer in SLC provides. However, the wages are way higher b/c cost of living
in higher.

Companies don't pay your equal to the value you provide, they pay you as
little as possible.

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spacephysics
If they paid you the value you provide, they would go out of business.

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mschuster91
Worker cooperatives exist. They just don't pay out value to shareholders who
do nothing.

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pasabagi
The problem is, shareholders can do something cooperatives cannot - they can
operate at a substantial loss, effectively indefinitely, with the knowledge
that they can get their profit by selling the share.

Amazon, for instance, ran at a net loss for much of its history. I don't know
how a workers cooperative would manage this.

Secondly, in capitalism, capital is concentrated among a small number of
people, who are often friends. Shareholders therefore often help with raising
further capital, since they are always from the capitalist class. So a
worker's cooperative won't be as good at raising funds.

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jacobr1
Not the full answer, but loans. Trading equity isn't the only way to get a
pile of cash. It isn't even the most common way.

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nunez
Business and (especially) consumer lenders are, by and large, much more risk-
averse than investors, almost by definition. They would absolutely not be okay
with near-indefinite loss; they would never regain their principal!

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dwheeler
This is no "law". It presumes that laborers cannot switch to a different
employer, that there is a massive oversupply of laborers, and that laborers
are completely interchangeable. I'll accept that in conditions like that,
wages will be significantly depressed. But this is not a truth in general.

In fact, laborers have strong incentives to want more than a subsistence wage.
So many laborers are going to take actions to counteract this, such as by
learning skills and gaining education to differentiate themselves. Then they
are in demand with a smaller supply.

There are lots of people who are making more than minimum wage as required by
the laws in their country. So this is obviously untrue.

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Smaug123
Happily, indeed, the iron law is not quite as iron as it might sound. But
Moloch's hand still grips firmly where it is given a hold: if you're working
two minimum wage jobs because you absolutely need the money, where are you
going to find the slack in your life to allow you to learn new skills and gain
education? I work just one full-time job at substantially more than minimum
wage, and even I can feel Moloch's cold caress and his call to sacrifice the
long-term on the altar of the short-term; if my life weren't so comfortable, I
can easily see how I might not even have the _choice_ to resist him, let alone
the willpower.

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dfxm12
To add on to this, America is particularly cruel in this regard since so many
benefits are tied to employment. It's incredibly risky to drop a job to free
up time to gain education or even look for another job.

Employers hold all the cards. They know it. They probably lobbied the
government to gain this advantage. Workers are powerless against their bosses,
but at least we can vote in more sympathetic government representatives.

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kypro
This seems easy to disprove simply by the fact that a single labourer can
produce far more than is needed to sustain a single life -- at least today. So
as long as that's true, people on average won't accept being paid the
equivalent of a bag of rice a day if you could always go out and produce
several on your own. Obviously this is an over simplification, but you get the
idea.

I think there could be some truth in this though. I wouldn't be surprised if
wages do trend towards the average productivity of labours, but again, that
would be far higher than barely surviving -- at least today in countries with
access to productivity boosting technology.

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ianleeclark
> I wouldn't be surprised if wages do trend towards the average productivity
> of labours, but again, that would be far higher than barely surviving

The cost of reproduction of labor is more than base subsistence, it's things
like base subsistence, cleaning your house, child rearing, and so on.

> at least today in countries with access to productivity boosting technology.

Wages, in the US, largely don't track to productivity gains. For other
countries, I wouldn't be too surprised to see similar statistics, but modified
according to labor rights, culture around unions, etc etc.

> So as long as that's true, people on average won't accept being paid the
> equivalent of a bag of rice a day if you could always go out and produce
> several on your own.

You have to have land to grow rice. This, like yours, is a simplification, but
it largely abstracts to the present situation. You can always drive for Uber,
but you need a car to drive.

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tracker1
I'd suggest that it depends on the work. Like most things it tends to come
down to negotiation, skill, value and how difficult or easy a specific person
is to replace. Although that last bit isn't always well understood by MBA
types in various cases.

That said, making everyone the same isn't a better solution, just a different
one and in many ways much worse.

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TeaDrunk
I don’t think this article was suggesting any solutions, so the second
paragraph seems like a straw man argument. (I mean it’s literally a Wikipedia
page.)

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tracker1
Considering one of the attributions was Marx, I'm not sure I would agree that
it's a straw man at all.

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roenxi
Doesn't make sense - everyone I know is paid far more than minimum wage
necessary to sustain life.

If it were a true law then everyone would be on literal subsistence wages -
they aren't. The illusion of this law is that people spend all their money, so
their lifestyle costs (typically) exactly match their wage. This is
independent of the wage.

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dencodev
Sustaining life is more than paying rent and buying food. It's the ability to
pay for medical care, to support yourself if you become disabled, to retire
when your body is frail and work is difficult, it's being able to afford the
expense of raising a child and being social and bettering yourself. These are
all basic human needs and it's virtually impossible to do this on minimum
wage.

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rmrfrmrf
Think about that next time you volunteer to teach children how to code ;)

~~~
toyg
Or going to $poor_country and helping them bootstrap your future
competitors...

