How Amazon Crushes Unions

Ah yes, the invocation of the Free Market Fairy https://bitworking.org/news/2008/01/the-free-market-fairy/

If I pay someone $5/hr to provide them with $10/hr of value, the benefit to the employer is $5/hr.

If I pay someone $10/hr to provide them with $10/hr of value, there is no benefit to the employer.

Why would anyone care to employ anyone for no benefit, beyond charity?

Furthermore, "$X/hr of value" is a little suspect - the $ value of something is only determined after a product or service is sold; and there may be many contributing factors to that sale. Determining what % a given action contributes towards a sale is subjective, and usually resolved in the following manner: "How much would this cost me if I bought from someone else" i.e. determined by the market, the exact thing which would be destroyed by your proposal.

If a product is made by several workers on a production line (and assisted by designers, machine maintainers, sales & marketing etc etc) how do you determine the $ value of each contribution, beyond auction-style competition?

On that point: what is the value of drinking water? If you never drank water you would die, so it is arguably worth a lot - so why pay so little? a lifetime of water keeping you alive is worth thousands of dollars, so why ever pay less that $3 a litre?

Of course, I understand the true aim here: If minimum living wage is $LMW pa then no job should pay less than that.

What complicates this is;

1) people can have multiple jobs to meet $LMW, so maybe an hourly rate should be the standard i.e. if you pay 0.5 $LMV then you should only take half the usual working hours (so people can get a second job) and the job should not be so physically or mentally draining that it would disallow this either.

2) jobs based on commission become tricky as profit is not guaranteed. I suppose you could just pay $LMW and grant commission once you're over some quota. That said, invalidating some of these schemes may be beneficial. Maybe self-funded start-ups should be required to pay themselves a token wage from savings?

3) $LMW will differ by area, QOL is hard to determine and this will require a lot of influence in the market by government. That said, a flat national rate might equalise this; giving benefit to poorer areas, and pushing people out of the areas of concentrated wealth. At the same time, this has negative effects; binding people to poorer areas and pushing them out of concentrations of wealth..

This might not address your concern though, if $LMW is $5/hr, your worker bringing $10/hr of value still won't be paid more.

Final point: lower wages, can bootstrap businesses inter high-paying ones, and careers into higher paying ones (e.g. see low/unpaid internships). Even larger established businesses may be more likely to take a gamble on something if they can initially pay lower wages until the project is profitable. All of this has downside too. It's all a question of shuffling debt - arguably a business owner with no obligation to pay higher wages at a later stage should therefore shoulder all debt from unprofitable stages, and should take on a loan rather than pay lower wages; At the same time, smaller business owners might not have the credit for that; Maybe a better option would be some kind of scheme where lower-paid employees are compensated in company bonds?

The employer is adding $5/hr of value to the end product. That is their profit.

You cannot pay someone $5/hr to provide them with $10/hr of value. You provided them with $5/hr.

You can pay someone $5/hr to provide you with $10/hr of value. In which case, you are undervaluing their work by $5/hr.

The employee combined with the employer are jointly generating $15/hour, and it's impossible to do attribution from an armchair. We just know that the entire company - the cyborg of labor/execs/machinery/land/IP/relationships/etc - is jointly producing that revenue.

Maybe the employer bought some expensive machinery that the employee relies on, has exclusive and cultivated relationships, rents expensive land, etc.

It's therefore presumptive to assert that the employer is contributing only $5/hour to that entire process. They're contributing $5/hour in wages, plus all the other stuff they bring to the table (machinery etc).

  "You're arguing that the radical power imbalance shouldn't be addressed because that that radical power imbalance can be exploited."

Unskilled labor is a fungible commodity just like table salt. That is how labor is priced. Supply and demand. Not power. There's no power structure that's dictating that house cleaners only get $20/hour. I hire a house cleaner for $20/hour because there's an over-supply of house cleaners.

  "What's so wrong with paying a fair wage for fair work?"

If you think power determines prices, I can see why you would come to a different conclusion. But I believe power is causally mostly irrelevant here, which is why I'm at my conclusion.

Added bonus that market prices tends to lead to optimal resource allocation (barring negative externalities).

  "And China's income disparity is getting worse."