> Please, remind me why Amazon should be blamed for this and not praised.
Because taking advantage of desperate people isn't an honorable thing to do. People are willing to put up with all sorts of abuse in order to keep their family afloat, but that doesn't justify anything.
> Because taking advantage of desperate people isn't an honorable thing to do.
They're not. They're offering them a decent job for a decent wage knowing that these people are totally unskilled. The alternative would be living on welfare. The fact that most of the workers are not on strike proves that they're satisfied with their jobs. Plus, nobody forced them to accept those jobs. And again, what would be the alternative for people with no skills? Unemployment, no opportunity to learn skills etc. No thanks.
>*They're not. They're offering them a decent job for a decent wage knowing that these people are totally unskilled.
That was neither a decent job, nor a decent wage. It was just a job and a wage they were forced to do in order to feed themselves, and under very bad conditions.
If a "totally unskilled" jobless person comes to me for money, I can offer him the chance dance, call me "master" and crawl at my feet and then give him $10.
Something which he might be forced to accept (hunger trumps pride).
That doesn't make my offer "decent" -- even if nobody else was willing to give him $10 anyway.
>Plus, nobody forced them to accept those jobs. And again, what would be the alternative for people with no skills? Unemployment, no opportunity to learn skills etc. No thanks.
So nobody forced them to accept those jobs, yet their only other option is unemployment, no opportunity to learn skills, and other reasons that you yourself find unacceptable?
How would you define "force"? It seems to me that victims of sexual harassment suffer the same choices. I'm assuming you think sexual harassment should be illegal. Is that not "force"?
Libertarians typically neglect the forces imposed by the lower tiers of Maslow's hierarchy (and by those controlling access to whatever is necessary to meet such needs) because once you start paying attention to those forces the claim that free-market capitalism maximizes individual freedom becomes significantly harder to prove.
EDIT: changed "laughable" to "significantly harder to prove" because I'm not in the mood for a fight today.
By that logic, not only Amazon, but everybody who refuses to hire those workers or pay them more than their work is worth is exerting force. It's absurd.
It might be disappointing that the concept of force/consent doesn't simplify the "which system is best" problem, but I don't see how it's absurd.
If a moral dilemma vanishes when you look at it from a different viewpoint, the most likely scenario is that the new viewpoint is obscuring the crux of the problem rather than miraculously simplifying it.
My neighbor calls up a local employment firm and hires 50 people to harvest his fields with sickles. He pays them minimum wage for this backbreaking work. They go home with blistered hands, crinks in their backs, and barely enough money to afford groceries for the week.
I instead pay another local farmer, one with deeper pockets, to harvest my field with his swanky combine harvester. He sits in his air-conditioned cabin sipping on a bottle of coke, and gets the job done in two days. For his time and machinery, I pay him a few thousand dollars.
How do these two situations compare? My neighbor is arguably "exploiting" workers who are down on their luck. I am paying a single guy with some entrepreneur spirit arguably too much money to get the same job done. On the other hand, I have failed to provide jobs for 50 workers. Had I forsaken mechanization, the increased demand for labor that my farm would have created could have improved the working conditions, or at least pay, for those bottom-tier farm hands. Instead I eliminated those jobs and the money stayed with me and the wealthier farmer.
Is my neighbor abusing the manual laborers? Am I abusing the wealthy combine owning farmer? Am I abusing the manual laborers? Is the wealthy combine owning farmer abusing me? Surely the manual laborers are not abusing the combine owner, but is the combine owner abusing the manual laborers?
Nothing is being obscured here, it is an extraordinary simple situation that actually plays out every day.
Both of your proposals are exploitative and needlessly unjust.
The big problem with the market is that it forces us to choose between the two. It snatches defeat from the jaws of victory by coupling the "workers starve" outcome to the "workers don't have jobs" outcome. There is no fundamental reason why they need to be coupled. Just because only 80% of people have to work to meet demand doesn't mean the other 20% deserve to starve.
Many systems are possible in which marginal incentives are maintained (the farmer and tractor driver get significantly more money than the out-of-work laborers) but the laborers don't go hungry. I search for my favorite solution among these (I'm a big fan of basic income / negative income tax).
As you note, we are automating away more and more of our economy every day. If we keep our current course, such automation becomes a club used by those who have enabled the automation (or otherwise accumulated capital) to beat down those who have not. I think that's a terrifying idea that at best leads to terrible injustice and at worst leads to violent overthrow of its perpetrators (including myself). We need an economic model that maintains the dignity of the labor force even in the face of shrinking demand for labor.
To be clear, are you saying that the hypothetical farmer "me" in the story is being unjust and exploitative for hiring the combine? Or are you just accusing the societal system, not the hypothetical me, of being unjust and exploitative?
I ask this because I think you are actually getting at the point I was trying to make.
Yes, I'm accusing the societal system (which presents you with two exploitative alternatives), not you. I think we do fundamentally agree and that the confusion might have stemmed from the fact that I answered a question which I thought you were implying rather than your literal question.
You asked "The current system gives choices X,Y. Isn't X>Y?" and I ignored the "Isn't X>Y?" part because I assumed it was mostly a rhetorical device designed to make concrete the first part ("The current system gives choices X,Y") which was more relevant to the philosophical issue being discussed.
My answer was "Yeah, it sucks that X,Y are our choices, because I think that one of M,N,O, or P might be better."
Ultimately one of the big problems we face today is that the various central banks print money and in doing so keep the interest rate artificially low.
That artificially low interest rate makes it possible for this mechanization/automation battle to play out in many sectors of industry that it normally wouldn't.
$1mm for 10 years at 2% interest is $9200 a month, give or take.
$1mm for 10 years and 10% interest is $13200 a month, roughly.
$13200 a month is enough to provide a job, fully loaded including salary, benefits, space, etc for at least a $60k/year job, maybe $80k per year or more depending on fixed vs variable overhead, etc.
$9200 per month would, given the same assumptions, perhaps pay only $30k-$50k again depending on the mix of variable and fixed costs.
So what we've seen is that the automation "horizon" has been pushed lower by the low interest rates. And it's displaced jobs that normally would have been done by low skilled labor that while not fun were at least employment. As the pool of jobs available to low skilled folks shrinks competition gets more fierce and wages drop.
The central banks are massively more damaging than they are generally understood to be.
Then let's not call it "absurd", but "not useful".
For the sake of argument, let's agree that those who do not have their basic needs satisfied are suffering under the collective force of everybody else who could satisfy the need. What makes Amazon so special? Aren't you also exerting force on those who are less fortunate than you?
Everybody is exerting "force" on everyone else, sometimes indirectly. The contract between Amazon and the laborer was signed under the duress of threatened homelessness / lack of healthcare / starvation. Amazon signed the contract under duress because it needs people to ship its boxes. Amazon is not special and neither is the worker.
Any deal we make must exert force on someone (a restatement of "the world isn't perfect" within our framework). So who should be favored? Put quantitatively, there's a scale between the minimum price at which a person will sell their labor and the maximum price Amazon can pay for the labor and still turn a profit -- where should the actual price lie? Market economics looks to supply/demand balance for unskilled labor and slides the "final price" all the way over to the minimum. A libertarian would claim that this is just (both parties "consented") and reject attempts by the government to meddle on the grounds that the market knows best. A philosophy that rejects the notion that both parties "consented" (both were under duress) opens the door to policy adjustments that push prices away from one extreme end of the spectrum, because it sees these as less just. Since Amazon has all the power under the current system, such policy adjustments would favor the worker.
I would prefer that this be implemented IRL using a basic income or negative income tax scheme (ameliorate (!=eliminate) the source of labor's duress at the source) rather than by implementing a minimum wage, but that's beside the point.
You entirely missed the point of the parent comment.
Amazon isn't making anyone's live's worse off. They are better off than they would be if Amazon didn't hire anyone at all and they became unemployed. If Amazon is wrong for hiring them at too low a wage, then every other company in the world is also wrong for not offering them to hire them at all.
Only if you adopt a libertarian's view of the word and concept of "force". On the other hand, if you're willing to accept that life has nuance, it makes a great deal of sense.
This is the entire point of a strike. Their work is worth what it can be purchased for. Striking workers are refusing to sell their labor at its current price.
I think that more specifically they'd say that this should be adressed by volountary charity. Which is nice in theory but ignores how inefficient that tends to be.
Not just inefficient. It's literally "the bystander effect" and "division of responsibility" principles writ large.
Bottom line: if everyone is responsible, then no one is responsible. No amount of pithy sound bites or quotes from Austrians will change that. If anything it's a wonder charities have been as successful as they have.
At least with a liberal government system, there is a single point of ultimate responsibility for issues like this: the government itself, as the legal embodiment of "the people" at large.
This conversation normally comes up in the context of taxes for #3.
To which I say, if you're willing to allow the government to deport someone who doesn't pay taxes I'd tend to agree with you, but as it stands the balance is actually tipped the other way: Government (usually local) is forced to figure out clean water, last-resort healthcare, schools, etc. simply by people being present, whether they pay taxes or not, yet government has no ability to simply "get rid" of people
I say the libertarians go find a nice area somewhere with a failed state, take it over, prove its supremacy and be a big shining beacon on the hill for libertarians everywhere to finally prove once and for all that it's better, and then I'll care about "taxes as extortion".
> So nobody forced them to accept those jobs, yet their only other option is unemployment
Also, not sure about Germany but it's not uncommon for employment offices to start withholding benefits if you refuse jobs "you're fit for". That would likely include warehouse grunt.
You are right that they have no choice but wrong that it's exclusively amazon's fault. It's also the fault of every other company that won't hire them. If amazon automated it's entire workforce tomorrow and fired everyone, those people would be even worse off, yet no one would be protesting amazon over it.
I don't know about Germany, but in the U.S. it's common that only the union leaders and negotiators get paid their normal salaries during strikes and lockouts. The rank-and-file members get a reduced amount or nothing from the union. (Or sometimes just health benefits.) For example, the recently locked-out American Crystal Sugar workers got a stipend of $100/week and no other benefits. Their normal salaries averaged about $750/week.
It depends on how recently organized the union is, and how secure those members feel and how much of that was afforded by the union. Many members of weaker industrial (not craft) unions are afraid to strike with their brothers.
> The fact that most of the workers are not on strike proves that they're satisfied with their jobs.
One could use that argument, and the rest of the argumentation, to praise slavery. I mean it provided food, shelter and hardly anyone went on strike, right?
EDIT: I don't mean to downplay slavery. Capitalism with all it's faults is far better than slavery or even just feudalism in most or all aspects. I just think that the argument I responded to is severely flawed: Not going on strike might be a sign of satisfaction but it might as well be a sign of fear and/or a lack of alternatives.
I am not too sure about that. A market economy? Yes. But what I know as Capitalism depends on a completely different organization of labor, namely "free" workers to create a market for labor itself. That was true for non-enslaved/white workers at that time but I don't think it makes sense to say it about a whole society when its not true for such a big percentage of the economy.
Yes, nearly everybody know that. I wrote hours ago that think working conditions in capitalism and slavery are very different, in general far better in the former, but that you could use the argumentation in favor of capitalism the parent used in favor of slavery too.
You realize that you are using a meta version of a meme instead of an actual argument?
The bad thing about "[literally] Hitler!" is that, most of the time, trivializes the Holocaust. In my "labour dispute version" of it that would have meant a trivialization of slavery which I tried to avoid in the sentence prefixed with "EDIT:". If you think I still did it please write it and add some argumentation.
> The fact that most of the workers are not on strike proves that they're satisfied with their jobs.
What about: they are scared of being fired and their families losing roof over their head and food to eat ? Most people aren't willing to go on strike or take any risks if already bad situation. I mean, the slaves weren't on constant strike either.
Consequences of leaving as a slave: being chased, beaten, maybe killed. Consequences of leaving for Amazon workers (well at least many of them probably most of the ones not on strike): losing roof over your head, family starving, children being denied things.
Slaves had it worse, the argument about it not being voluntarily decision still applies.
Actually Verdi (the union) is also complaining about some of the working conditions as well, which they consider inhumane. It is mainly, but not exclusively about the wages.
> for a decent wage
Amazon is not paying according to the Branchentarifvertrag (industry sector collective agreement) and refuses to even sit down with the union and talk about collective bargaining. They are also actively trying to keep their employees from unionizing.
If you consider the current wages "decent" is up to your point of view, but the union and I'd guess most of the affected workers disagree.
> The fact that most of the workers are not on strike proves that they're satisfied with their jobs
This proves nothing, in particular not job satisfaction, and is actually also not how things work in Germany and therefore just wrong.
First a union will usually selectively shut down just a few facilities instead of all at once. This is called "Warnstreiks" (warning strikes), and this is what is happening right now. Only later and and only in accordance with German strike/bargaining law - e.g. you have to be unionized and are prohibited to violate the "Friedenspflicht", which regulates when and under what circumstances a unionized strike may happen - it is possible to enter the actual "Streik" where all (unionized) employees stop working.
Plus, amazon employees where often not unionized before this started, so it might take some time and convincing for the union to get employees to join before they enter the "Warnstreiks".
> Plus, nobody forced them to accept those jobs
Well, the "Arbeitsagentur" (job center) can cut either your unemployment pay or later social welfare (Hartz 4) if you refuse to accept the jobs that are offered to you. If you also happen to have a family, and IIRC amazon employs quite a few single mothers for example, then you're "forced" to take the job in a way.
Some people, in particular union folks of course, even accuse amazon of predatory behavior, especially seeking out the weakest members of society for their work force because they are the least likely to fight against inhumane conditions and low wages. I used to think this predatory characterization was sensationalist and unfair, but by now, from what I read about amazon so far in the press and even in their own press statements, I think there might be something to it. But then again, I'm also just one of these Euro-socialists who thinks that everybody should have health insurance and should earn a living wage if working full time.
Amazon more or less takes the same stance as you seem to take: They claim that they are just helping the weakest people. Treating your low-paid work force as if they were industrial robots (one of the complaints by workers and the union, and more or less admitted by amazon to happen as a result of their workplace rules and "processes") and keeping them from effectively complaining about it by keeping them from organizing suggests otherwise.
This. I enjoy working here in Germany for this exact reason, unions and workers rights. It feels so damn great to work in a country where I feel that I am being treated fair and where I know that I can count on my colleagues (not just at my work place but my whole sector) to have my back. The fact is that it is not a lack of income that does not allow bigger wages for the workers at Amazon but an abundance of greed. When your union sees that you could be better off without hurting the place you work at it is going to step in. It is also going to step in when any of your basic rights as a worker is are not met (vacation time, compensated overtime, insurance, workplace safety etc.)
Offering underpaying jobs knowing that benefits will be cut to the person if they refuse is a common tactic used to force people in to jobs they wouldn't otherwise take.
They're essentially forced to take them, and there's a low threshold for the cheap pay recouping the training cost on how to move things around the warehouse.
High turnover doesn't matter if there's a steady supply of people coerced in to accepting and training takes at most 2 days.
Are you defending the Robber Barons of the Industrial Revolution or Amazon? I really can't tell.
In all seriousness, this line of reasoning can be used to rationalize the actions of anyone who takes advantage of the destitute and marginalized to make a profit: pimps, crime lords, sweatshop managers, etc. etc.
Forgive me for not patting Amazon on the back for giving THE WORKERS THEY BASE THEIR ENTIRE ENTERPRISE ON a tiny percentage of the profits. After all, nobody applauds the trash who taunt the homeless with crumbs, even though they are technically feeding them.
Edit: I'm a terrible multi-tasker, edited to clarify some points
I wouldn't say "any work" is better. However, there is a well documented effect called "contra-freeloading", in which individuals will prefer pay for work over pay for no work - within reason. This effect has been found in humans and numerous other species. Except cats ...
It's not a "skill" per se, but demonstrating you will reliably show up on time and do your job has a definite value in the labor market, and could lead to other opportunities.
How about learning how to get along effectively with others? Or given an individual that was interested in operations, how to run a warehouse, principles of Lean, etc?
A job can be a stepping stone to a better future. Perhaps that is true here?
I think you make a very principled distinction between 'de-jure' compulsion, and 'de-facto' compulsion, but in practice, things aren't always so clear cut.
If I were to offer a single mother a large lump sum for one of her kidneys so she could feed her children, without any kind of threat, implied or otherwise, that would still be at the very least ethically problematic, don't you think?
How is entering into a voluntary contract with someone taking advantage of them?
And what is your proposed solution? Amazon raise prices on the goods they sell to their workers and the rest of the population? The government step in and coerce different forms of contracts?
If you do care about this I have a suggestion - create a fund where people who feel as you do can give the money they save from shopping at Amazon (or other earnings) to these people. If you believe they are undervaluing themselves invest in them. Or place blame on companies that through voluntary exchanges are changing the world.
In our society it is very difficult (though not entirely impossible) to survive without money. If you are not in a position to withhold your labour, because you have no money, then you have no bargaining power when determining your wages. In this case, a prospective employer can essentially offer you any wage they like - will that be a truly "voluntary" contract, even though you have no choice other than to accept it?
Simplistic solutions like "just move elsewhere" ignore both the inherent difficulties that moving poses when you are living in poverty, and the situations encountered by many people who take that option. As a new arrival you face the prospect of high initial costs trying to find a place to live and trying to find work, on top of the living costs you would have faced anyway, coupled to the fact that you are likely to have a reduced support network to help you deal with any problems you might face, and help you get on your feet. This is all after the initial expense of actually moving.
You asked your parent for a proposed solution, mine is simply for Amazon to more equitably distribute revenue within the company, to spend more on low-level wages, less on high-level wages, and less on other projects if there is a shortfall. In general I suspect that some kind of employee ownership goes quite far to alleviating many problems of this nature.
As a footnote, the only sense in which a market exchange is voluntary is that all parties agreed to it, which follows from the definition, and is therefore useless: "market exchange" will suffice. It is simply a disingenuous attempt to make the idea of a market exchange sound more humane, and to suggest an absence of coercion, without ever providing evidence that this is the case.
To your first paragraph your point only holds if there is absolutely no competition for workers (which may be the case). And yes, it still is voluntary. I once bought a phone off craigslist. It was a decent phone, worth probably $50 but I got it for $35 because the seller needed cash right away. Just because he was illiquid does not mean it was wrong of me to buy the phone from him. Or was that immoral of me and should I have been required to give him $50?
I agree moving is difficult - but so is creating efficiencies like Bezos has done. If your social views include the view that life should be easy for everyone, no matter their contribution, then we have a fundamental difference in what is realistic. If that is your view though maybe a better solution would be for those with money who share your view to support those without jobs or working with Amazon (or pay them to not work for Amazon). It is very easy to ask Amazon to change their policies, but that's because it isn't your money. (It's also worth noting that Amazon is not even profitable and runs in incredibly competitive industries. And, for every dollar they have to raise in costs they need to raise in profits.)
Your solution might work but has some concerns. Although the market for unskilled work is very heavily weighted towards companies the market for skilled leadership is very competitive. There is a reason top executives at Apple, Google and Amazon are paid well. Paying 10,000 workers $1 an hour more means $20,000,000 less yearly to spend on upper level talent in a highly competitive marketplace for that talent.
I am pointing out the human respecting nature of the market exchange - that it respects human choice (no matter how bad or good an individuals choice may be) rather than implying the idea that someone else knows what is best. Coercion is "the practice of persuading someone to do something by using force or threats". I have never heard a story of Amazon threatening someone to work for them or using physical force to entice them to take a job. Taxes, military drafts and certain types of crime are coercion - posting on a job board is not.
"If your social views include the view that life should be easy for everyone, ..."
That is a gross mis-characterization of the liberal worldview. The social contract in most modern capitalistic states is that we allow a winner-takes-all economic model as long as we ensure equal opportunity and social mobility. However, wealth and income inequality are at all time highs, and many people on the lower economic and social rungs are stuck in a poverty trap. This isn't about giving people a free lunch, it's about reforming the system to provide more opportunity to those in dire circumstances.
Regarding your craigslist exchange, you took advantage of someone's dire economic situation in order to improve your own. While not illegal, I would argue it is immoral, and this is happening on a much larger scale with Amazon. It is immoral to employ an individual for less than a living wage, regardless of what the market dictates should be the prevailing wage. It might not be Amazon's fault that poverty exists, and no one can blame them for exploiting it to their advantage, but they are benefiting enormously from our capitalistic economic system, and it is entirely reasonable to impose regulations and reforms on the winners in order to restore mobility and opportunity.
> It was a decent phone, worth probably $50 but I got it for $35 because the seller needed cash right away. Just because he was illiquid does not mean it was wrong of me to buy the phone from him. Or was that immoral of me and should I have been required to give him $50?
I was coercive of you: you used the fact that he essentially had no bargaining power to extract value in your favor. Whether or not you want to call that immoral is your business.
> I have never heard a story of Amazon threatening someone to work for them or using physical force to entice them to take a job
Amazon makes job offers which wouldn't be accepted without coercion, and uses the fact that benefits from social programs will be cut if the person uses the job to co-opt government coercion. They effectively threaten your current social program income to get you to accept a job you otherwise wouldn't.
Is that entirely Amazon's fault? No. Is Amazon using a messed up government policy to coerce people to take jobs they otherwise wouldn't? Yes.
> There is a reason top executives at Apple, Google and Amazon are paid well.
Because they're friends with the board of directors which sets their salaries, which are paid for not out of the directors' pockets but from shareholder profits?
Or maybe it's because the board wants the company to look like it's in the big leagues, and gee whiz, we're not in the big leagues unless we pay like we are, regardless of how the executives actually perform.
Everyone's salaries come from shareholder's profits - including the factory worker's.
I don't think either reason holds - and if it does then those companies will fall to the wayside. If you think Google, Amazon and Apple are wasting millions of dollars of year overpaying for talented leaders then share your plan with the world to do better and take them out of business.
I think it's actually because within 10 years a company can be absolutely destroyed if they don't get the right leaders. Look at Blackberry, Nokia and Microsoft. All were leaders in their fields ten years ago and now have competitors that are outpacing them (in the case of the two latter ones) or simply erasing them (in the case of Blackberry). If Blackberry discovers multitouch first and puts out an iPhone or if Microsoft makes tablets work in a consumer friendly way by hiring Jony Ive - then the whole landscape changes.
Also in large companies workers making $200k+ aren't usually buddies with the board but there is a highly competitive market for them which allows those salaries to be the norm. It's a skills economy and for people without skills a comfortable, not flashy, life is a good and available option.
Your market-based challenge "share your plan with the world to do better and take them out of business", which seems to be a fairly common retort to anyone who takes issue with the way any particular company is run, is not a valid argument, because it is predicated on the market operating correctly.
If the market does operate correctly, as you suggest, then someone could, indeed, start a company, and "take them (Google) out of business", unless of course their hypothesis about overpaying top earners was faulty, in which case they would be outcompeted. If, instead, the market does not operate correctly, then such an attempt might fail because of other unspecified market failures. There is no way of determining whether a challenger's failure to displace the market leader is caused by (in this case) their false belief that companies are overpaying their top earners, or whether the failure is caused by the market not operating correctly. Unless you can devise a way of distinguishing the two, then this type of argument is inherently uninformative.
On a slightly different note, I agree narrowly with your point that companies need talented leaders, though I am not as convinced that the leaders of the companies you list determined their fate as much as you appear (to me) to suggest. For example, Blackberry couldn't simply "switch" to producing iPhones, for a whole variety of reasons.
Are Google executives paid well? Last time I heard about it, they received $1/year salary, and tons of company stock. That ties their income directly with company performance (through stock price).
Bargaining power is limited both by competition for jobs, and by fundamental necessity, which was more my point. A group of workers who do not have the freedom to engage in competitive tender, because they are forced to address their fundamental needs, are in a much worse bargaining position irrespective of whether or not they have "skills to offer to society".
The wider point is that structure matters: an organisation that is run dictatorially by a small central group is, by my estimation, fundamentally more illiberal than an organisation that is run cooperatively by its members. I fail to understand why those people who are enamoured with free market principles are such staunch defenders of organisations that internally suppress those principles almost absolutely.
I am skeptical of the limited definition of coercion as only persuasion that takes place by force or threat; in my opinion there are many other, more 'polite' ways of influencing people that are just as pernicious. Indeed, I agree with both pyoung and DerpDerpDerp that your craigslist exchange was coercive in the sense that you exploited that person's situation to your own advantage. A basic test for whether or not an exchange is non-coercive is whether or not both parties would happily reverse the exchange. If not, then there was probably some element of coercion involved, even if it was simply an unaddressed asymmetry of information. Remember that perfect market information is one of the assumptions necessary for market Pareto optimality.
>In this case, a prospective employer can essentially offer you any wage they like - will that be a truly "voluntary" contract, even though you have no choice other than to accept it?
"Bargaining power" is misleading because that is not how a market works. It's not two party's haggling over what they think a "fair price" is, it's a lot of parties and prices tend towards supply and demand. Unlike the bargaining model, supply and demand still works even if one party doesn't have a choice.
For example, you have no choice but to buy food. But farmers can't force you to pay extreme prices because you have no choice. They have to compete amongst each other and the price of food falls towards what it costs to produce.
Messing with the supply and demand price can create problems like unemployment. It's too expensive to hire new workers at the minimum wage, or there is a much higher incentive to outsource and automate work, or just not do it at all. To continue the food analogy, if you set a maximum food price, farmers would just stop producing if it cost more than the maximum price.
Your argument seems compelling, but there are several problems I find with it. The first is that it rests on the usual assumptions of a competitive market, and we are discussing situations where this isn't the case: people are looking for work where there is none, or very little - there is no competition for their labour.
The second problem is that your analogy is imperfect, because it switches round to the demand side rather than the supply side. A better analogy, I think, would be if you were a farmer who had produced a sufficient supply of food, but you had to sell it because it was going to spoil. In this case buyers, assuming that they don't strictly need your food, could apply pressure to you to lower your price fairly indiscriminately. This is a much better analogy to the original case: companies (often, and in the case we are talking about) don't need your labour, they will simply be less productive without it, but you do need a wage, or you will starve to death.
>The first is that it rests on the usual assumptions of a competitive market, and we are discussing situations where this isn't the case: people are looking for work where there is none, or very little - there is no competition for their labour.
And this is the root of the problem I am trying to get at. The demand for labor is pretty low. Blaming the few companies that are hiring workers isn't fair, and forcing them to raise wages doesn't fix the problem.
>The second problem is that your analogy is imperfect, because it switches round to the demand side rather than the supply side.
I think that people thinking of supply and demand sides separately is where a lot of people get confused, especially when discussing labor markets. There really isn't any difference and the same economic principles apply to both sides.
>companies (often, and in the case we are talking about) don't need your labour, they will simply be less productive without it, but you do need a wage, or you will starve to death.
Another good point and what I am trying to get at. The problem I think is that people depend on the value of their labor for their income. That's hardly fair to begin with (some people are simply worth more economically than others), but it's especially problematic if some people's labor becomes almost worthless due to automation or whatever. A basic income would be an ideal solution.
> And this is the root of the problem I am trying to get at. The demand for labor is pretty low. Blaming the few companies that are hiring workers isn't fair, and forcing them to raise wages doesn't fix the problem.
I essentially agree with that.
> I think that people thinking of supply and demand sides separately is where a lot of people get confused, especially when discussing labor markets. There really isn't any difference and the same economic principles apply to both sides.
I think that there genuinely is an asymmetry between supply and demand, indeed especially when discussing labour markets. If labour demand is higher than labour supply, then very crudely we can say that wages will go up to the maximum that the wage-payers can afford - but it won't go higher than that, because if it did they would run out of money, go out of business, and demand would go down. For the converse case, when labour demand is lower than labour supply, then, again very crudely, we can say that wages will fall, but there is essentially no lower limit, because there is no feedback (in pricing terms) until so many people have died of starvation that supply starts going down. Obviously both of those 'end game' scenarios are ridiculous, but it demonstrates the asymmetry - excess demand provides a rapid natural cap on price, whereas excess supply doesn't.
> Another good point and what I am trying to get at. The problem I think is that people depend on the value of their labor for their income. That's hardly fair to begin with (some people are simply worth more economically than others), but it's especially problematic if some people's labor becomes almost worthless due to automation or whatever. A basic income would be an ideal solution.
I absolutely agree with this part, and your proposed solution.
The contract is only voluntary if both sides have other reasonable options. This is very important point and the biggest hole in American Libertarian view of the world. There is a reason slavery contracts are illegal as well as there is a reason for worker rights (wouldn't be necessary and could be negotiated for every contract by logic of voluntary contract - workers just wouldn't agree to worse conditions).
Signing an agreement with a gun to your head is not voluntary. This is, after all, the normal complaint of the libertarian regarding the extortion of taxes, no?
Well the same logic applies when the "gun" is not physically a gun: If your set of viable choices has a size of 1 then you cannot be honestly said to have any "voluntary" choice.
As I said, the same is true of food or any other necessity. But we aren't going around claiming farmers are exploiting us.
The problem with the person holding a gun to your head scenario, is that they are abusing your rights in the first place by putting a gun to your head. We don't want people to do that for various reasons. But in this scenario it isn't the employer or farmer holding the gun, it's mother nature. They are just offering assistance from that.
The problem with that is that you see property rights as part of "mother nature". So if one side controls all the resources and can coerce the other to w/e they please you see it as "mother nature" on the other hand when I put a gun to your head it's no longer mother nature it's "abusing rights".
If the contract is voluntary it is advantageous to both or else it wouldn't be entered into.
Take this trade off. I create a system whereby I can make $100 for every hour someone works. I tell you I'll pay you $10 an hour to work. If you are better off working those hours you will take it and I will receive $90 and you $10. If you won't I'm out a lot of money, so I will probably revise my offer upwards.
These workers are individuals capable of making decisions. If they decide working for Amazon for $13 an hour is better than alternatives they should take it - if not they should pursue a more valuable alternative.
I understand the economics. But that doesn't answer my question: why does that rule out the possibility of taking advantage? How do you get from point A to point B?
There is an implicit assumption in your thinking that I'm trying to tease out.
Then I assume you mean that one party is better off and the other party is worse off (taken advantage of). Sure, that can happen. But in the case of Amazon, the workers are better off or they wouldn't work there.
You could be "better off", but still have been screwed out of being "even more better off". That's still being taken advantage of. Consider the legendary story about how Steve Jobs screwed the Woz.
Either definition works. You can take advantage of (exploit) someone at their expense, or your can take advantage of (leverage) their capabilities to mutual gain.
Frank took advantage of Amazon's 2-day shipping to do his last-minute Christmas shopping
The only assumption is that people will make the decision that is in their best interest. Amazon can only attract workers if it is the best option those workers have.
You have a nice life. Someone comes up to you and holds a gun to your head. You are now about to die. They say "I won't shoot you if you give me all your money".
Suddenly, giving away all your money is in your best interest. Therefore it's voluntary, and by your argument, fair and reasonable and nobody is being taken advantage of because it's all by choice and in best interests. Right?
That is incorrect. By holding a gun, that person has initiated force against you. Initiation of force is a proactive action that requires volition on part of the perpetrator.
Amazon is not initiating force against anyone. If they provide higher than market wages for the workers, they will be violating the rights of their shareholders who will lose money and will be worse off due to the deal. In an industry with as tight margins as Amazon, it can result in flight of capital, loss of shareholder value and layoffs.
comments I haven't verified state that the people had a welfare state income keeping them alive, and that by merely extending an offer of work - at any salary - Amazon causes that to be revoked.
This isn't literally "initiating force" but if it is true then it is very similar in effect to the mugging scenario, and having the mugger use unseen but still present power to "make an offer you can't refuse" is still not a fair and ethical way to egg people to voluntarily enter into contracts.
You're both assuming that offering someone the best option they have rules out the conclusion that you're taking advantage of that person. But that does not necessarily follow.
Then yes, everyone is taking advantage of everyone. My cell phone provider is taking advantage of me because they make profit off of me. I'm taking advantage of them because they spent $1,000,000,000 building the infrastructure so I can use that cell phone. Apple is taking advantage of me by making a profit off of their cell phone. I am taking advantage of Apple by using that phone which they put millions of dollars of research into and shipped to my door.
So we both gain an advantage.
Jack gets a job with Amazon - he is able to afford a color TV and internet at home. Amazon hires Jack - they get their orders shipped to homes on time for Christmas.
Everyone is getting an advantage in all of these situations. No one would ever make an agreement that doesn't provide an advantage.
I assume you're asserting there is a power difference between Amazon and Jack that makes Amazon get more advantage from Jack. This may be true. Amazon, however, has a power difference with customers who ultimately decide whether the billions of dollars worth of infrastructure they are building is worth it or whether competitors will win.
Is it wrong if I decide to not buy from Amazon? Am I taking advantage of them by buying if their product is $10 but not buying if their product is $12?
"Taking advantage" does not mean "getting an economic benefit out of a transaction with someone." It's a moral judgment, defined in terms of conformance with social norms and expectations.
You forget that in Germany, unemployment insurance requires you to not bypass any offers (and you're required to seek work as well).
By "choosing" not to be employed by Amazon, if that's offered to the worker and happens to be their only choice, they "choose" to lose unemployment benefits.
> If the contract is voluntary it is advantageous to both or else it wouldn't be entered into.
If your grandfather gave all of his money willingly and right away to his physician, don't you feel the physician acted unethically? And don't you feel your grandfather might be impacted negatively by that decision?
If the contract is voluntary it is advantageous to both or else it wouldn't be entered into.
I think the fundamental disconnect here, is the people you are debating with believe that Amazon should have made it more advantageous for the workers, because as the workers have no other options it would be the nice thing to do.
Because taking advantage of desperate people isn't an honorable thing to do. People are willing to put up with all sorts of abuse in order to keep their family afloat, but that doesn't justify anything.