100% of tech workers are underpaid if we had any sort of legitimate market for labor rather than a collusion by managers to drive the price of labor by justifying it against living costs. The value generated by services by IT workers at times is order of magnitude greater than they are paid. And there is always a shortage of them if accounts from industry are believed, which would lead market forces to push up the price to hire them significantly greater than living cost value making them all wealthy. Not so in the managerial economy, where shareholders capture that value because they have money. And this sort of collusion goes back to the very early days of Silicon Valley.
You need to think in terms of marginal rather than average effects. Diamonds are more expensive than water because the latter is so abundant (at least for now) that it can profitably be provided for low value use like watering golf courses. It doesn't matter that the first units each household purchases are completely indespensible.
There is no neccisary exploitation story with good being sold/labour being provided at a price below the average value to the purchaser. However, it could be that buyers collude to pay less than their marginal value for the procuct.
Diamonds are extremely abundant. So I don't think your example is good, there is collusion to keep their prices sky high. There is artificial control on the quantity of diamonds to create scarcity to drive up costs.
What's this collusion you speak of? Not saying it doesn't exist (and true, prosecutable collusion has happened in the tech industry), just wondering exctly what you're referring to.
There is implicit collusion that is taught in management schools and generally accepted as a norm to value labor against living cost, rather than the value that labor generates in the market. Therefore companies are not willing to pay much more than living cost for workers, other than some superstar sociopath who has been able to get the company by the throat and justify say 1/2 million for his position because he's irreplaceable.
While I agree with your sentiments, something is a bit off here with the reality of the specifics you're stating.
> There is implicit collusion that is taught in management schools and generally accepted as a norm to value labor against living cost, rather than the value that labor generates in the market.
This isn't implicit collusion of a business education. This is a result of the brand of capitalism, and inefficient markets, we have allowing for the manipulation of labor prices.
> Therefore companies are not willing to pay much more than living cost for workers, other than some superstar sociopath who has been able to get the company by the throat and justify say 1/2 million for his position because he's irreplaceable.
They are in fact taught that EVERYONE is replaceable even them.
All you need to pay is the lowest salary that one person currently in the labor market will accept. This is closely related to living expenses for obvious reasons. No collusion required.
Yes that's how a market starts but if it continue that's no longer true, and also the cost of living goes up by how much money people are paid via the housing banking mechanism in which the banks capture that extra value that the companies pay out. The board is set up put money in the pockets of those who already have it. Not to make anyone wealthy. The real estate banking system is one such money sink, probably the greatest one.
