Comment by jariel | Hacker News Reader

Comment by jariel | Hacker News Reader

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Unions are given rights due to asymmetries in power.

Professionals with credentials have some power in the market, they can command a price.

Unskilled labour cannot. Without regulations, they would be paid $2 an hour, i.e. what the market will bear.

If you thought the 'Dollar Store' was cheap, imagine the '25 cent store' - where people survive on extreme minimums.

Favellas and tiny illegal homes pop up, without plumbing etc. and entire mini-industries are created around the ultra-low working class.

A $1 Trillion dollar corporation has 'all the power' an individual has none, and it's existential: 'work for just enough wages to barely keep you alive or die'. That's what the market will push towards and a lot of people will think that it's fair.

The market allocates money based on power. That's it. In a purely market based anything, if you don't have power - you die, or close to it.

People living in favelas with no plumbing can't hope to send their children to school etc. so it creates generational problems.

This is why we have minimum wage, safety laws, anti-discrimination etc.

That said - unions can often be a detriment and their power can be good only for the members and nobody else. It's not a black and white issue.

I get the asymmetry in power but I also feel that imbalance is fair because the power is earned, by creating value for others and being successful in the market. There are also different companies competing with each other and creating choice for both labor and consumers (and where there isn't competition, we should enforce anti-trust laws).

What I don't get is how unions are any different from the kind of local monopoly we dislike in cable companies, or a cartel (when a union operates broadly across an industry). They inhibit competition and choice, and limit liquidity in the labor market through their policies. They override individual freedoms - and I don't mean just for the corporation who is forced into a contract with them, but also because they force everyone else who wants to work to join their organization and pay dues. Often time, paying dues also means supporting these organizations' activities that go beyond bargaining for working conditions or wages. For example, the NEA (the main teachers union, which is the largest union in the US) frequently engages in politics and adopts progressive political positions as their official positions/guiding principles. This type of monolithic centralization feels undesirable to me for the same reason monopolies feel undesirable.

In my opinion, the balance would be better if we let people organize without reprisal but requiring that what results is simply a separate entity (a separate company) who is selling their labor and has to survive based on their economic competitiveness. That way there is still choice and competition in labor.

As for the dire picture you paint of favelas - maybe there's some minimum safety net we need to provide (which we have in the form of welfare, SNAP, and more). But if we're talking about generational issues - I also feel people should not have children if they cannot afford to raise them well. Otherwise, what we're saying is that people can keep supplying unskilled laborers and the rest of society is obligated to employ them at certain wages or otherwise support them. That seems unfair to me in a different way.

Seems unlikely that everyone making minimum wage would suddenly be making $2 if there was no minimum wage. What’s your reasoning? If it was a pure race to the bottom then why aren’t SWEs paid min wage?

SWE's have bargaining power, $100K is their market rate.

Those without any leverage whatsoever, unskilled workers rate will be the 'absolute minimum required to survive'.

Somewhere around $2/hour over the long haul. Millions of people living in tiny, one room apartments, without basic amenities.

We know people will accept this to survive because they do, all around the world.

Yeah that makes sense and I agree with the sentiment. But unemployment seems pretty low in the US so it doesn’t seem like there’s enough supply and lack of demand to warrant wages dropping that much. I agree it could drop but was wondering if $2 was just random guess or backed by anything.

Oh, $2 is a guess, I don't know the number, but it's low.

Factors are non-market issue such as social welfare programs, incidental wealth (i.e. kids with upper middle class parents, living at home choosing not to work), general attitudes, the difficulty of the labour (outside vs. inside), the relative buying power of the $2 (i.e. in a remote area, it may be possible to have 'micro homes' and get by, and social acceptance.

Wages for undocumented labour might be a hint at the number though that's probably more than $2, my bet is that's somewhere north of $6-8 right now.

My $2 take is 'long view' i.e. we see favelas in Brazil, people will accept that quality of life unless there are institutional pressures otherwise.

Also consider that the unemployment rate does not count those who have stopped looking for work.

On the flip side, gig work, tipped minimum wages, and unpaid labor (e.g. unpaid internships) is extremely common and can definitely bring in pay less than minimum wage. I can only imagine what would happen in cases where the backstop of minimum wage was removed.

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