That also happens, but the existence of this fact does not necessarily negate the assertion that collective bargaining has the power to significantly improve the circumstances of workers both in terms of pay and job security.
Unions exist for skilled and non-skilled labor. E.g. unions in major league sports, screen actor’s guild, writer’s guild, teachers union, federal employees union.
In the cite I gave the starting salary for some of these positions was quite high; that was the point of the cite; these were not experienced workers.
Personally I get the feeling that we have have fundamental disagreement concerning the factors of wage determination. I gather that your belief is that one perfects a skill and becomes valuable in the marketplace and is rewarded accordingly. My view is different, I see more of a situation where there is a dichotomy of owners and workers within which wage determination is largely a result of a power struggle between these two groups. This is not to negate other factors inherent in wage determination, but it is to say that I believe that the latter plays a more significant role than the former.
No, that’s not what I meant to suggest. The idea being put forth is that companies will restrict freedom significantly further than they do today. I’m asking how they could do that without changes to employment law. But I agree with Voyager-- most of the things you listed are governing actions while at work. I don’t consider it a restriction of my freedom if my employer doesn’t want me surfing the web for personal reasons while I’m at work.
In reasonably high level non-union jobs wage determination for new workers and existing workers is very different. When hiring you are dealing directly with market forces, and have to bid against others in a situation where the candidate has freedom to choose from various jobs with almost now downside. Existing employees have a lot of inertia, and a lot of employers seem willing to accept some level of attrition to save on salary. I’m not passing judgement on how well this works out, but it is pretty standard.
I don’t think these positions are mutually exclusive. I wouldn’t use terms like “viable” or “rewarded” though. That sort of implies that a highly skilled person can’t suddenly find themselves obsolete. The market doesn’t care if you are rewarded with a six figure bonus or a pink slip.
But ultimately it’s the market that sets wages. The source of the power struggle between workers and owners is that the owners and their agents tend to keep all the profits.
You are dealing with some market forces, however, in all industrialized nations market forces are highly fettered by legal restrictions - even in the US.
Ultimately, almost every employer must adhere to market equilibrium wage rates in the long run.
I’m probably being a little nitpicky. I’m not sure what my point is - I’m also not really sure I understand what your point is. Sorry:(
I think the PWC prediction is completely off the mark, because by 2050 computer software and robotics will have created unemployment levels of 50% maybe more. (For comparison, the max rate for the Great Depression was around 25%). Marshall Brain thinks so too. He makes a convincing case. So PWC is completely missing out on a key factor in the employment of the future, and their predictions make no sense as a result.
This may start getting way off topic, but why does everyone assume that the loss of jobs due to technology will not be mitigated by the increased ability for the average person to live a self sustaining lifestyle due to the advancement of technology? In other words, increased technology will allow the average person to produce their own food, power etc more easily. In this scenario everything will come full circle to a certain degree and the economy will look like it did in 1910 when half the population was agrarian and provided much of what they needed for themselves, and did not depend on employment to feed themselves. ~ 1910 2.0 version.
I would LIKE to think that, and I would HOPE things work out that way, but I think it would be courting disaster to ASSUME that it will. Even if it does EVENTUALLY work out that way, the transition could be EXTREMELY painful if it isn’t managed well … and I have VERY LITTLE reason to think it will.
I think it’s a coin toss as to what could happen, but that is out of sync with the general thoughts of most people who talk about these issues - is there a certain bit of information I’m not looking at? I believe humanity to be highly adaptable to changes.
Such as? (I know there are plenty of legal restrictions, but I don’t see how that affects the candidate who has multiple job offers and is much more of a free player in the market than an existing employee.)
WalMart vs Costco.
My point was that there are psychological factors which make the market not nearly as much of an ideal market as theory might predict. I’ve been involved in salaries for decades in multiple companies, and in all cases new employee salaries have risen much faster than those of existing employees. Given that a new employee is riskier, there is less information about her, and she is guaranteed to be less productive for the first year, this is an odd situation indeed if the markets were equivalent. I’m sure it is different for jobs where movement is a lot easier.
Well first of all, are you talking about the rise of home 3D printing technology that will basically function like a Star Trek replicator? I agree that’s one possibility, but I don’t know of anyone who assumes that will be happening in the predictable future.
My statement was based on the observation that in a country where conservatives and libertarians squeal like stuck pigs at the thought of a minimum wage that’s also a living wage, especially among the rich who are increasingly using their wealth as a means of leveraging political power thanks to the Supreme Court, the institution of Basic Income would be VERY hard to implement.
Such as basic laws of supply and demand. In many and various ways, the law has a significant effect on supply and demand, and, as such on equilibrium wages. Examples include H1B1 visas, licensing requirements, things such as SOX, which were a boon for the accounting profession. I’ll expand on the accounting example - with the passage of the Sarbanes Oxley act in the early 2000’s, the demand for CPA’s increased substantially. Another component of the law, namely licensing being modified to allow for more people to pass the CPA exam so supply will meet the increased demand. These legal situations effect supply and demand and thus effect the equilibrium wage rate. In the first instance, the accountants make more money, but then that wage rate comes down as the laxity in licensing increases supply. There will be variance from the equilibrium wage rate, but there are substantial limitations to an individual’s ability to deviate from the equilibrium in a way that would make financial sense to an organization. Engineering is another example, changes in patent law will have obvious effects on engineering salaries.
I am a little confused about the first statement in your paragraph in relation to the second part. Walmart vs. Costo to me means you are comparing two companies who are in different industries and due to the difference in margin between the two industries have different pay rates for their employees. In the Walmart/Costco example, costco pays its employees more however, it makes more profit per employee than Walmrt due to being in a higher margin business.* This supports the points I am making.
So, I am left to assume that you are implying that Costco pays its employees more for some “psychological” reason and that you have never bothered to look at the basic critical numbers behind the two businesses.
Ultimatley, the point I am making is that there are significant limitations to the ability of an individual to determine his or her own value in the marketplace no matter how talented etc. Equilibrim wage is a stake in the ground with a tether that is attached to any employee and is determined by a large number of factors outside of any particular firm.
http://www.thedailybeast.com/articles/2012/11/26/why-can-t-walmart-be-more-like-costco.html *"Costco has a more highly paid labor force–but that labor force also brings in a lot more money. Costco’s labor force, paid $19 an hour, brings in three times as much revenue as a Walmart workforce paid somewhere between 50-60% of that. (There’s a bit of messiness to all these calculations, because of course both firms have employees who don’t work in stores–but that’s the majority of their workforce, so I’m going to assume that the differences come out in the wash.)
This is not because Costco treats its workers better, and therefore gets fantastic productivity out of them, though this is what you would think if you listened to very sincere union activists on NPR. Rather, it’s because their business model is inherently higher-productivity. A typical Costco store has around 4,000 SKUs, most of which are stacked on pallets so that you can be your own stockboy. A Walmart has 140,000 SKUs, which have to be tediously sorted, replaced on shelves, reordered, delivered, and so forth. People tend to radically underestimate the costs imposed by complexity, because the management problems do not simply add up; they multiply." *
My analysis is based upon the ability for people to do things such as supply their own energy through solar panels, provide their own food through hydroponic farming techniques, provide their own water through new developments and understanding of greywater management. Lately I have seen much more interest in things such as simple self sufficient living than I have ever seen. “Green” technology is also efficient technology, which can greatly reduce the living expenses of individuals and I think that a decrease in jobs will also be accompanied by a decrease in living expenses for many people and a cultural shift towards more simple and sustainable living. Just as technology eliminates jobs, it increases the ability of people to do things for themselves; think of digital photography for one. Photo development businesses are gone, but on the other hand, when I was kid one week of sending out pictures on Facebook to show to dozens of people would have cost me a fortune, but with digital technology it costs me nothing.
So that’s what you mean. I certainly can’t argue with that. I know lots of environmental engineers who owe their job to environmental regulations, not to mention the massive number of people in the financial industry doing compliance work. The economic environment certainly affects salary. However my example was of a job candidate considering multiple offers, all of which come from the same environment. 10 years ago and 10 years from now his offers may be very different.
To be totally fair, you’d have to compare Sam’s Club with Costco, but since WalMart doesn’t break out the numbers you have to compare the entire thing. As does the articles comparing them, one of which you quoted from. Still, I’d say that they recruit from the same talent pool, more or less.
Now, you claim that Costco has better margins - but your quote is about the increased revenue the Costco worker generates. Hardly the same thing.
Now, WalMart could pay what Costco pays, and Costco certainly can cut down to what WalMart pays. The articles around this issue say that one issue WalMart has is that by minimizing labor and labor cost they get employees who hang out in the stock area and don’t stock shelves. If Costco got the same class of worker, do you doubt that their revenue per worker numbers will go down? It appears that the can fund higher pay through the associated higher level of productivity.
The difference between Costco and Sam’s Club is what exactly? WalMart certainly has an advantage in size. While both push their suppliers, I suspect WalMart can do it better. And they are excellent at logistics and data analysis. So I dispute that they are in vastly different industries. And I still contend that differences in salaries are not set by market forces, but by deliberate management decisions.
Does Sam’s Club pay the same as Costco? I’m not claiming that Costco’s results are entirely explained by how they treat workers. It does demonstrate that minimizing labor cost is not always a winning strategy. After all, a simpler store layout and reduced number of SKUs might lead one to think they could do fine with lower grade employees. If WalMart has a more complex system, you’d think they’d do better paying enough to get employees who could handle that.
I’ve been in companies which set their average salaries at different places within the salary range for the industry. Clearly companies have a good degree of freedom doing this for existing employees. Which is my point about psychology. In a frictionless market an employee getting a bad raise because the raise pool is small can pick up and leave at a moment’s notice. In a real economy there are many barriers to doing this. Even in Silicon Valley, where changing jobs does not involve moving and is not very disruptive. I’ve done it.
But you didn’t respond to my point about starting salaries rising much faster than raises. How would you explain it otherwise?
Well, there are some limits and people, no matter how talented, can price themselves out of the market. But certainly the candidate having three job offers can command a higher salary than one having only one - and that candidate has some control over how many offers he gets. Trust me - the very high offers new PhDs are getting today come directly from competing with other companies for them.
Workers who are commodities are a different story entirely, of course.
I’m going to disagree with this. Since Walmart doesn’t break out the Sam’s club numbers you make up your own:confused: If you do not have data, a comparison I would consider valid is not possible. The article addresses every point you just made; If you think those responses in the article are not accurate, tell me what you believe is wrong. I linked the article in my last response, I only quoted the most simple and relevant part.
Almost all employees everywhere are commodities. I do not see how a Phd is not a commodity. It’s “publish or perish” for many non-tenured professors. A phd, like any other person who is employed to do something needs to add value beyond what he or she receives in salary in order to remain useful to a business. In government work, that is not necessarily the case - but I will not get into that now. The only time I can see a Phd breaking out of the commodity description is when he or she receives tenure, other than that I don’t see how a phd is fundamentally different.
I’m 100% with you on working for larger companies though.
If I goof off here, it doesn’t come out of my bosses pocket. That’s an advantage right there.