Comment by paxys | Hacker News Reader

Comment by paxys | Hacker News Reader

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This is a nuanced discussion that is always derailed by the usual "down with evil corporations!!" rhetoric.

Let's say there are a thousand people on food stamps, getting $2000/mo from the government. A company comes along and says "we will employ all thousand people part-time for $1000/mo, and so the government now only has to pay them $1000/mo in assistance". Did the company do a good thing for society?

What if the company had instead said "we will employ 500 people full-time and pay them $2000/mo, so now the government only has to take care of the remaining 500"? Is that better or worse?

Or what if the company only employed a hundred people and paid them $10000/mo so they could live a good life, at the expense of the rest?

If one of the employees had 8 dependents and another had none, should they both get the same salary for the same work? What if it isn't enough for raising 8 kids?

Or if none of these options are palatable should the company and its warehouse not be allowed to exist at all? How does the government generate tax revenue for social services in the first place then?

It's an interesting question. Employees have to generate more value for the employer than the employer pays the employee, otherwise the employer won't employ the employee, or they will go bankrupt.

So let's say you have someone that's getting the $2000/mo from the government for assistance. Amazon hires them and pays them $1000/mo, the only way this makes sense for Amazon is if they can extract more than $1000/mo of value out of that employee.

I think where the disconnect is in a lot of these conversations is how much value is being extracted.

Let's say an employee earning $1000/mo generates $1500/mo of value for Amazon. Then the fact that the government has to support them to the tune of $1000/mo as well might be acceptable. Amazon gets profit, government (and the tax payers) have to spend $1000/mo less, employee gets enough money to live. Everyone is happy.

Let's say an employee earning $1000/mo generates $5000/mo of value for Amazon. This scenario is a bit harder to accept, why should the tax payers have to subsidize those low wages when Amazon could pay $2000/mo and still make a healthy profit?

The problem is that that figure, "how much value does an employee generate?" is hard to come by. You can get more aggregate figures https://csimarket.com/stocks/AMZN-Revenue-per-Employee.html which tell us that every employee generates on average $326,428 but it is harder to find details on "How much value does an amazon warehouse worker generate?"

So it all hinges on how much value Amazon extracts from the worker. If it's $50/mo then I don't think anyone is picking up their pitchforks. If it's $4000/mo and they've decided that they can squeeze their workforce because the tax payer will pick up the slack and they can pocket the difference, then pitchforks come out.

You don't need to wonder or make changes to "fix" this problem. If Amazon or anyone was making $5000 off employees they paid $1000, they would hire more and wages would go up.

That assumes that there is no diminishing return on additional hires. If I run a warehouse that generates $100,000/mo with 10 employees being paid $1000/mo and those 10 employees satisfy the needs of the warehouse, I wouldn't hire more for fun.

There is some finite amount of demand that needs to be processed by the warehouse, the fact that I can satisfy that demand with a small number of low paid workers doesn't somehow increase the demand.

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