Wednesday, July 11, 2007

Workers, unions and web servers

I have often wondered about job stability stories from our parents when all they had to do to have a secure jobs was to be a member of a union at work. As soon as you were a member of the union, you were assured that you could not be fired, health care benefits were superb and life in general was good. Today that seems to have gone by the wayside. Unions are struggling with dwindling memberships and membership in a union at work means nothing. A recent essay by Paul Graham (his social thoughts are pretty good for a hard core technologist - you should read his other essay on good/bad art) brings out an interesting viewpoint on why the power of the unions may be dwindling.
The Builders, 1950 by Fernand Leger

Oddly enough, it was working with startups that made me realize where the high-paying union job came from. In a rapidly growing market, you don't worry too much about efficiency. It's more important to grow fast. If there's some mundane problem getting in your way, and there's a simple solution that's somewhat expensive, just take it and get on with more important things. EBay didn't win by paying less for servers than their competitors.

Difficult though it may be to imagine now, manufacturing was a growth industry in the mid twentieth century. This was an era when small firms making everything from cars to candy were getting consolidated into a new kind of corporation with national reach and huge economies of scale. You had to grow fast or die. Workers were for these companies what servers are for an Internet startup. A reliable supply was more important than low cost.

If you looked in the head of a 1950s auto executive, the attitude must have been: sure, give 'em whatever they ask for, so long as the new model isn't delayed. In other words, those workers were not paid what their work was worth. Circumstances being what they were, companies would have been stupid to insist on paying them so little.

The early twentieth century was just a fast-growing startup overpaying for infrastructure. And we in the present are not a fallen people, who have abandoned whatever mysterious high-minded principles produced the high-paying union job. We simply live in a time when the fast-growing companies overspend on different things.

Fernand Leger, Construction Workers

It is an interesting world we live in when yesterday assets i.e. 'people' are compared to today’s assets 'web servers'. Looks like companies lavished the same amount of attention on these two resources at appropriate times in history. What will it be tomorrow? Transformers?

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