[hntrader]

The company rented the employee for $5/hour and got $15/hour revenue as a result.

Gross value = $15/hour

Net value = $15/hour - $5/hour = $10/hour

This is an uncontroversial and standard use of "gross" and "net". Replace "employee" with anything else ("bitcoin mining rig") and you'll see what I mean.

You can define "net value" above to be the same as just plain "value", and that's fine, I believe we're talking about the same thing there.

  "because of a radical power imbalance"

No, it's just supply and demand, it has little to do with power.

Table salt is cheap because there's an oversupply of table salt. The same with unskilled labor.

House cleaners are cheap. I'd be happy to pay them $100/hour (that's the amount of subjective value it brings me) but I only need to pay them $20/hour - and that's because of an oversupply of house cleaners. I, as an individual, have no power here. There's no power structure I am exploiting to suppress the wages of house cleaners, in fact the market is very decentralized. Power is not a significant causal factor.

  "Most of China is still poor."

Right, but they are much less poor and getting better every day because people ignored the exploitation narrative and went ahead and hired all those people on sub-$5/hour. Hopefully they keep hiring people on sub-$5/hour and continue the great work of lifting even more people out of poverty.

[bena]

Yes, 15 - 5 happens to be 10. I'm not arguing it isn't. That happens to be a coincidence in this case. Or an artifact that I've chosen increments of 5 to make the numbers.

The employee is paid $5.

What the employee made is sold for $15.

The value of what the employer brings to the table is $5.

So there is $10 of value in what just the employee did. But he's only getting paid for half of that value. The rest is being captured by the employer because the employer can dictate terms.

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

And China's income disparity is getting worse. And the rural areas aren't much better off.

Wouldn't it be even better then if they hired people for more than $5/hr?

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

[hntrader]

I don't agree with the way you're divvying up the value creation to different stakeholders.

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."

I'm not arguing that. I'm arguing that the radical power imbalance doesn't even exist, at least insofar as it is causally related to wages.

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?"

I believe market prices for labor are fair, by definition, in that they reflect actual supply and demand.

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."

I'm not trying to argue it's perfect over there. But there's no disputing that China's economic growth over the last 30 years has caused an incredible humanitarian outcome, which is inconsistent with an exploitation narrative.