Gains don't only accrue to the rich. They (generally) only get rich by creating far more value than they capture.
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Replying to @lpolovets @paul_arnold
What evidence makes you believe this?
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Replying to @nbashaw @paul_arnold
A few categories of wealth: - inherited (key is how your predecessors made their money) - well-gotten (you create value, capture some of that value) - ill-gotten (you extract more value from others than you provide to them) Anecdotally ill-gotten feels rare: mafia, theft, etc.
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Because most transactions are voluntary, people only transact when they think they're getting more than they're giving up. E.g. even with HF trading (low valuation creation), the counterparty thinks it's getting a good deal, otherwise it wouldn't transact.
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My friends, meet labor monopsony! (cc
@noahpinion) https://www.bloomberg.com/opinion/articles/2018-04-05/supply-and-demand-does-a-poor-job-of-explaining-depressed-wages …1 reply 1 retweet 7 likes -
Replying to @kimmaicutler @nbashaw and
I'm not sure I get the implications of this article. Jobs are voluntary, and if one company underpays then others can pay more to compete? E.g. if I don't like being an Amzn warehouse worker, I can do that at Walmart, or become a truck driver, or etc.
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Replying to @lpolovets @kimmaicutler and
Presumably people are at a specific job because they think other jobs are worse, otherwise they would switch to better jobs over time. And a wage floor will make some jobs untenable, which feels like an economic inefficiency.
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Replying to @lpolovets @nbashaw and
Uh, what if there are two duopolistic employers as you describe in the place of what were once many a generation ago... Read
@noahpinion’s story. Studies... “find that in areas where there are fewer employers in an industry, workers in that industry earn lower wages.”1 reply 0 retweets 6 likes -
Replying to @kimmaicutler @nbashaw and
That part makes sense to me because of econ principles, but 1) If another employer pays much better and you can do the job/quickly learn the job, that incentivizes people to leave or incumbents to raise wages. 2) This sounds like it's regarding more specialized jobs?
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Replying to @lpolovets @kimmaicutler and
I'm also not sure how to process "start with a model of market power, in which a few companies set wages below levels found in a competitive market unless prevented from doing so" If a company can hire at their offered wages, aren't those by definition at the competitive level?
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Or alternately you have to think about parts of the country with thin labor markets, like rural areas. Think farmers with few alternatives other than working with Monsanto cc @AustinFrerick
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Replying to @kimmaicutler @lpolovets and
Most
meat is now slaughtered in rural towns. It's the only buyer of labor & the industry is so concentrated that it acts like a cartel.
Wages in 1985: $11 per hour in 1985
33 years later, less than $3 more, not adjusting for inflation. Meanwhile, Smithfield CEO made $291Mpic.twitter.com/yC3Rx7mpr6
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