American companies are suppressing wages for many workers • Hacker News Board

Re: American companies are suppressing wages for many workers

#41

Post by vpmpaul » Mon, Mar 05, 2018, 2:39 PM UTC

_m8fo wrote: post #3

And why wouldn't they? It's time to bring back mechanisms, legal or otherwise, to prevent this from happening again. Usually the collective workforce of a company has significant leverage over a company, but with the advent of globalization, the "gig economy", and technological unemployment in some ways this leverage is harder to capitalize on, or even worse, nonexistent. I don't know if there's any empirical proof f…

Mechanisms legal or otherwise already exist. The problem is they "have no teeth" meaning the punishment is worth taking to get the benefit of the illegal action.

ie. Its illegal but worst case is we get fined 10% of what we will make anyway. Best case is we get away with it.

The other part is that they are not enforced due to the lack of resources to enforce them. Which again leads to the "have no teeth" since the laws are so broadly "interpreted" it can take years to pursue one case. This part is the hard part since it really is the crux of the problem and no one is working on it nor has any monetary incentive to do so.

There is not logically, morally, or non-exploitative business reason to have a non-compete for a minimum wage employee. Yet this case will probably drag out for at least 6 months if it is handled "expediently"

Re: American companies are suppressing wages for many workers

#42

Post by wallawe » Mon, Mar 05, 2018, 2:39 PM UTC

OscarCunningham wrote: post #25

michaelbuckbee wrote: post #18

The linked article mentions outsourcing, but it was this other _fantastic_ article [1] on the structural issues of the current wage economy that really helped me understand just how different things are: "Thirty years ago, she says, you could walk into any hotel in America and everyone in the building, from the cleaners to the security guards to the bartenders, was a direct hire, each worker on the same pay scale and…

What is it, in particular, about contracting that allows businesses to pay the same people less? What can they do with the contracting that they couldn't do without it? I think this: >“By shifting tasks to contractors, companies pay a price for a service rather than wages for work. That means they don’t have to think about training, career advancement or benefit provision.” was an attempt at explanation. But I don't…

Benefits. Benefits can cost up to 50% more on top of salary per employee, sometimes even more. The government requires full-time employees to be covered by health insurance for example. So if you switch to contractors you can save a great deal on this cost.

Re: American companies are suppressing wages for many workers

#43

Post by [deleted] » Mon, Mar 05, 2018, 2:40 PM UTC

lotsofpulp wrote: post #31

OscarCunningham wrote: post #25

Earlier quoted context omitted.

What is it, in particular, about contracting that allows businesses to pay the same people less? What can they do with the contracting that they couldn't do without it? I think this: >“By shifting tasks to contractors, companies pay a price for a service rather than wages for work. That means they don’t have to think about training, career advancement or benefit provision.” was an attempt at explanation. But I don't…

It doesn't. The real reason is due to reduced demand for labor, partly due to increased efficiency from technology, partly due to reduced spending, etc. At the end of the day, it's always supply and demand. The contracting just helps with creating a third party to deal with employment laws and all that hassle. I recently stayed at a hotel and didn't even need to talk to anyone. Bought the room on via the hotel's app,…

[deleted]

Re: American companies are suppressing wages for many workers

#44

Post by geodel » Mon, Mar 05, 2018, 2:40 PM UTC

randomdata wrote: post #26

Spooky23 wrote: post #2

All of the major unions have been broken, with the public sector unions coming up next re: the Janus case. Even though there was always a limited number of union workers, their collective bargaining set the standard. That’s not really a factor these days.

Interestingly, unionization in Canada is still as strong as the strongest years in the US. Despite that, wages are every bit as stagnant as the US and, looking at income data, there is a lot of mirroring between the two countries. The substantial decline of unionization in the US is one thing, but what is Canada doing wrong?

This is world wide phenomenon applied to all irrespective of where they lie on political/social spectrum. I think reasons are 2 fold:

1) Far too many humans on earth to have better bargain power in exchange of labor.

2) No workable formula where enormous wealth generated in this world to be more equally distributed.

Re: American companies are suppressing wages for many workers

#45

Post by emodendroket » Mon, Mar 05, 2018, 2:40 PM UTC

OscarCunningham wrote: post #25

michaelbuckbee wrote: post #18

The linked article mentions outsourcing, but it was this other _fantastic_ article [1] on the structural issues of the current wage economy that really helped me understand just how different things are: "Thirty years ago, she says, you could walk into any hotel in America and everyone in the building, from the cleaners to the security guards to the bartenders, was a direct hire, each worker on the same pay scale and…

What is it, in particular, about contracting that allows businesses to pay the same people less? What can they do with the contracting that they couldn't do without it? I think this: >“By shifting tasks to contractors, companies pay a price for a service rather than wages for work. That means they don’t have to think about training, career advancement or benefit provision.” was an attempt at explanation. But I don't…

I don't know if this is what the article is meant to suggest, but in the past I think promotion from within from menial positions to lofty ones was far more common than it is now and contracting could help, in part, explain that.

Re: American companies are suppressing wages for many workers

#46

Post by hiram112 » Mon, Mar 05, 2018, 2:41 PM UTC

ThirdFoundation wrote: post #19

nukeop wrote: post #4

There was similar wage suppression (or should I say, wage theft scheme) in Silicon Valley until very recently. That's why the wages skyrocketed. If the scheme could be broken up in one industry, it can happen again in others.

I wonder if the current high wages in Silicon Valley are a function of job competition in other cities (tech jobs in Austin, Denver, NYC, etc) plus a highly mobile workforce. Tech workers tend to skew younger and are also able to work remotely in many cases. I bring all this up, because I'm not sure it will be quite as applicable in other industries. It seems that many workers aren't willing to move for work and don'…

The SV wages I'm seeing seem to be concentrated in a few really wealthy companies who basically enjoy monopoly status in their domains.

It doesn't seem like smaller startups pay that well - though maybe that is fair due to the chance to hit it big.

What I will tell you is that software engineers in the rest of the country, especially in industries that have been decimated by offshoring and H1Bs (banking, insurance, and large companies in general) do not pay that well after about age 35 or so once you hit your ceiling (anywhere from $90K in the Midwest to $150k in high COL East Coast) no matter how talented you are.

I made way better money than most of my peers at 25 - they were still in grad school and paying off loans. By 30, I was still making more, but they were quickly catching up.

I'm imagining by 40, I won't be much ahead of anyone with a professional degree or even those who went into government and now have seniority, pensions, etc.

What I've seen so far with offshoring, H1Bs in my 20s was the first big warning sign for me. Then as I got into my 30's and started seeing how management treats older works, I'm beginning to realize that age discrimination in tech is for real - second warning sign.

And finally, if this whole war on white / asian males picks up steam in other companies, I'm probably going to attempt to pivot out of the industry completely. There is not much of a bright future.

Re: American companies are suppressing wages for many workers

#47

Post by charmander_IRL » Mon, Mar 05, 2018, 2:41 PM UTC

Why are low skill non-competes bad? You can just lateral into another low skill job in an unrelated industry. It’s not as if you have a huge amount of human capital sunk into sandwich prep.

Re: American companies are suppressing wages for many workers

#48

Post by emodendroket » Mon, Mar 05, 2018, 2:41 PM UTC

randomdata wrote: post #26

Spooky23 wrote: post #2

All of the major unions have been broken, with the public sector unions coming up next re: the Janus case. Even though there was always a limited number of union workers, their collective bargaining set the standard. That’s not really a factor these days.

Interestingly, unionization in Canada is still as strong as the strongest years in the US. Despite that, wages are every bit as stagnant as the US and, looking at income data, there is a lot of mirroring between the two countries. The substantial decline of unionization in the US is one thing, but what is Canada doing wrong?

Isn't Canada just as affected by off-shoring of work to countries with weaker labor standards and lower wages?

Re: American companies are suppressing wages for many workers

#49

Post by emodendroket » Mon, Mar 05, 2018, 2:42 PM UTC

troels wrote: post #32

mindvirus wrote: post #15

Earlier quoted context omitted.

For non competes, I wish the law was that companies could bench you, but they'd have to pay you 200% of your best comp of the past 5 years. I think it'd solve a ton of problems.

I some jurisdictions, putting overtly one-sided constraints in an employment contract (or any contract, where there is an asymmetry in power between the parties) may render it un-enforceable. For example, a non-compete, for no good reason, and with no compensation attached to it. But you'd still have to take your chances in court though.

In most US states that isn't the case, however.

Re: American companies are suppressing wages for many workers

#50

Post by edraferi » Mon, Mar 05, 2018, 2:42 PM UTC

michaelbuckbee wrote: post #18

The linked article mentions outsourcing, but it was this other _fantastic_ article [1] on the structural issues of the current wage economy that really helped me understand just how different things are: "Thirty years ago, she says, you could walk into any hotel in America and everyone in the building, from the cleaners to the security guards to the bartenders, was a direct hire, each worker on the same pay scale and…

I hate this. I REALLY hate this. Creating a full-time workforce by cobbling together contractors is disgraceful. Sure, sometimes contracting makes sense, but replacing your core workforce with contractors just sucks.

Here are some reasons why:

1) loss of corporate identity / camaraderie

2) reduced working training & quality... and loss of control over how work it performed. If you retain control over work methods, they’re supposed to be employees

3) double downward pressure on wages as companies compete and then the contracting firm takes a cut. Pressure increases as subcontractors show up

4) subcontracting! You hire firms with no capabilities, which then hire subcontractors who hire people who know what they’re doing (maybe, see above). Why are these companies making profits? It should all go to the workers.

5) false flexibility. Your HR system might be painful, but good luck getting rid of a toxic contractor if they’re the cheapest person who can do the work. You can take your contract to a new company but they’ll hire the same people you already had.

Contracting obviously has its place - no firm can do everything- but staff replacement just sucks.

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