[LitFan]

As a society we've decided that we do, because we are. The shoddy treatment of Amazon's employees has been publicized repeatedly for years.

The issue is that while the average person is lead to believe the notion that they can work hard and make enough to have a comfortable living, they can only afford it at the expense of others. The wealthy will not let that be at their expense - they want it to be at the expense of other poor people.

Pitting middle class people against lower class people is a proven tactic, and that's what's happening here.

Most products and services provided by companies are subsidized by providing poor working conditions or wages for their employees, in an attempt to maximize profits.

If all of those subsidies were to vanish, the standard of living for most lower to middle class people would drop substantially - while the upper class would be unaffected.

[grecy]

> If all of those subsidies were to vanish, the standard of living for most lower to middle class people would drop substantially

I see so many discussions in US politics that go around and around and bend over backwards to never, ever propose the extremely simple and obvious solution....

(...drum roll...)

Companies simply lower profits.

Conditions for the workers go up with better conditions & higher pay. The prices of products and services need not change, so consumers are not worse off.

It appears that what I'm saying is tantamount to blasphemy in the US, nobody is even willing to suggest lowering corporate profits as one possible option with associated pros and cons.

[logfromblammo]

Raise corporate income taxes, but deduct all employee compensation from taxable income? Tax capital gains at the same rate as ordinary income? Penalize companies that spend less than X% or their revenues on employee compensation, where X% is the median labor expense fraction in that industry?

[LitFan]

Lowering profits means reduced shareholder value and a lower market capitalization. Every company is interested in providing as much value to shareholders as possible.

I don't know all the ins and outs, but I believe public trading and shareholders are to blame here.

And again - the middle to upper middle class people who rely on returns from their investments in companies to support their standard of living think the company-shareholder relationship is entirely healthy.

A shareholder provides no value to the good or service being delivered, they exist only to make profit off a transaction they have no stake in.

My views here could be totally off. I welcome discussion on the topic.

[snarfy]

It's not that they are interested in providing as much value possible - they are legally mandated. [1]

[1] - https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

[jcranmer]

That case doesn't mean what most people who bring it up want it to mean, particularly as has been interpreted by 100 years of intervening case law. In that case, Henry Ford had more or less admitted that he was attempting to screw over specific shareholders.

As it is applied in modern practice, a corporate officer merely has to articulate a rationale of why his/her actions benefit the shareholders. For example, deciding to double every worker's salary, on the basis that it would improve morale and productivity, could be seen as ultimately benefiting shareholders, even if it tanks profits and dividends in the short-term.

Pretty much the only way you could actually get the Dodge v Ford case invoked in precedent is to have someone on the stand admit that he/she was trying to screw over shareholders (which is basically what Henry Ford did, and why he lost the case), which should be impossible if that person has competent representation.

[falcolas]

Other court cases have shown that shareholder value is not solely profits. Shareholder value is also obtained by creating a company that will survive and thrive over time - it's why Target and Costco can both survive while paying reasonable wages to their employees.

[aerotwelve]

Dodge v. Ford is only precedent in Michigan. Even within Michigan, it's my understanding that the decision is outweighed by the business judgement rule[1], which contradicts any mandate of shareholder primacy.

[1] https://en.m.wikipedia.org/wiki/Business_judgment_rule

[394549]

> Lowering profits means reduced shareholder value and a lower market capitalization. Every company is interested in providing as much value to shareholders as possible.

Ultimately, it's pro-business elite politics that have created that situation. IIRC, corporations, like copyrights, exist to serve the public good. If rapacious exploitation to achieve maximum profit is against the public good, the corporations that engage in such behavior should be either reigned in or destroyed using the legal system.

Unfortunately, like copyrights, corporate law has been twisted an corrupted into something that doesn't serve the public good anymore.

[vezycash]

>Every company is interested in providing as much value to shareholders as possible.

To short sellers of Tesla stock, maximum value would be?

[tzmudzin]

Short sellers by definition are not shareholders.

[chii]

> most lower to middle class people would drop substantially - while the upper class would be unaffected.

which is why taxation needs to be progressive. The rich who have their wealth created by using other people needs to pay a larger proportion of the tax burden to make society more comfortable for everybody. The idea is that with added infrastructure and education and healthcare paid for by the higher taxes, the poor will eventually not be forced into the position of having to slave away.

[394549]

> As a society we've decided that we do, because we are. The shoddy treatment of Amazon's employees has been publicized repeatedly for years.

The operations of the market, with its vast information asymmetries, does not amount to a "decision" to endorse the particular behaviors of its participants. And even if Amazon's labor practices have been reported somewhere, they haven't been reported everywhere, and it's not like Amazon is up front with its customers about its shoddy treatment of its workers.

I have a lot of confidence that many of Amazon's labor practices would be banned if they were put up for a straight-up national referendum.

[LitFan]

You and your sibling comment are right - it's too harsh to say that society has decided they're okay with this treatment. However, I believe people need to be more aware of the decisions they make daily.

Rather than passively supporting Amazon because it's the most convenient or cheapest option, investigate why they might be able to offer their service at a rate other companies in their space can't.

I don't believe it's right to assume or enforce that companies disclose all of their business practices to their customers. Those practices should be audited by a regulatory body to assess whether they're humane or ethical.

> I have a lot of confidence that many of Amazon's labor practices would be banned if they were put up for a straight-up national referendum.

On this, I'm sure you're right. Which leads me to an interesting question:

Assuming: 1) There are companies engaging in activity the majority of their potential customers would find immoral 2) One of these companies is able to provide a superior product or service at a reduced rate to their competitors 3) Information about these immoral practices is available to those customers (though they have to seek it out)

Why do people still support the company? Shouldn't people suspect something is fishy with that company's offering?

My assumption to begin with is that consumers were turning a blind eye in order to keep using the service. That may not be the case.

Maybe it's that they don't have the time or capacity to evaluate this for themselves (especially for the number of businesses we all depend on daily). Maybe it's a tragedy of the commons.

How can we fix this?

[394549]

> Why do people still support the company? Shouldn't people suspect something is fishy with that company's offering?

> My assumption to begin with is that consumers were turning a blind eye in order to keep using the service. That may not be the case.

I think a lot of people do not have the kind of personalities that drive them to get to the bottom of things. They didn't turn a blind eye, they just never looked beyond the surface in the first place. If pressed to explain how Amazon does what it does, they'll probably hand-wave that they're a tech company that uses magic computer innovation to out-compete old-fashioned dinosaurs.

> How can we fix this?

I don't know, but probably the first step is a lot of awareness-raising in ways that can emotionally grab the attention of the common man. Closely related is to also raise awareness of more ethical competitors, like Costco and others.

The second step is to somehow defeat the layers of pro-business propaganda and political polarization it's associated with in order to motivate real legislative action. That's a problem I have no idea how to solve.

[ardy42]

>> So the question we have to ask is do we want to live in a society where this treatment is legal?

> As a society we've decided that we do, because we are. The shoddy treatment of Amazon's employees has been publicized repeatedly for years.

There was no society-level decision made to endorse this kind of treatment.

[aeternus]

If the majority of the profit really is made by the 'subsidy' or delta between what companies can get away paying vs. the value provided by the low-skill worker, then it would be easy for other companies to come in and take advantage of that margin. Arbitrage should drive down the gap.

Few want to consider the more likely harsh truth: The overall value produced by some low-skilled workers may be insufficient to justify even minimum wage.

If that's the case, then no amount of legislation around working conditions will help since it makes more economic sense for companies to invest in automation than human capital.