Scared (rather than altruistic) capitalists

[Paul93]

Hi everyone!

One, hotly contested feature of the current version (1.0.6) of Vic3 is the fact that Capitalists and Aristocrats are far too keen to increase the wage of their workers. This is clearly not good for the game, since it guarantees an automatic way to increase the standard of living of people, independent of both the political (i.e. the government intervention) and the social (i.e. the strength of the trade unions) situation of the country. It also stifles the in-game fight between capitalism and socialism, which was one of the most important flashpoints of the XIX century politics.

Altruistic capitalists were (and are) not something you see very often. However, despite their best efforts to prove the contrary, they have hearts and can feel emotions. In particular, as all the other humans, their heart can be filled with fear. And it is this fear that induce them to increase wages.

As such, my proposal is the following: instead of eliminating altogether automatic wage increases, as it may be the case in in the next update, I would make them happen only when the clout of trade unions IG is higher than that of industrialists IG.

If trade unions are weak compared to industrialists, then even the most profitable industry will not share its own success with the workers, and will instead redirect the extra-profits to the owners. Instead, if the opposite happens, then part of these profits will go to the workers over time (just as it happens now). If trade unions are very strong (like, their clout is more than 20% over that of industrialists), then this process would happer quicker and worker wages would increase more.

Together with this, I would add another source of clout to industrialists in the form of unemployed: the percentage of unemployed people calculated over the entire nation would be added to the clout of the industrialists IG. This would also make liberal immigration policies slightly less attractive: a large influx of immigrats that cannot be put to work quickly would depress salaries, increasing radicals and potentially triggering civil wars.

The same line of reasoning can be adopted for rural buildings, but this time using considering the clout of landowners vs that of the rural folk. A strong rural folk (i.e. a strong class of small independent farmers) would impose their conditions, thus acquiring higher wages with respect to the aristocrats.

This would give the player two ways to increase the living standards of the poorer strata: a more direct one, via government intervention (i.e. minimum wages & common ownership), and an indirect one, via bolstering the trade unions and the rural folk (or suppressing the industrialists/landowners).

 

[GrounchoVilla]

Hi everyone!

One, hotly contested feature of the current version (1.0.6) of Vic3 is the fact that Capitalists and Aristocrats are far too keen to increase the wage of their workers. This is clearly not good for the game, since it guarantees an automatic way to increase the standard of living of people, independent of both the political (i.e. the government intervention) and the social (i.e. the strength of the trade unions) situation of the country. It also stifles the in-game fight between capitalism and socialism, which was one of the most important flashpoints of the XIX century politics.

Altruistic capitalists were (and are) not something you see very often. However, despite their best efforts to prove the contrary, they have hearts and can feel emotions. In particular, as all the other humans, their heart can be filled with fear. And it is this fear that induce them to increase wages.

As such, my proposal is the following: instead of eliminating altogether automatic wage increases, as it may be the case in in the next update, I would make them happen only when the clout of trade unions IG is higher than that of industrialists IG.

If trade unions are weak compared to industrialists, then even the most profitable industry will not share its own success with the workers, and will instead redirect the extra-profits to the owners. Instead, if the opposite happens, then part of these profits will go to the workers over time (just as it happens now). If trade unions are very strong (like, their clout is more than 20% over that of industrialists), then this process would happer quicker and worker wages would increase more.

Together with this, I would add another source of clout to industrialists in the form of unemployed: the percentage of unemployed people calculated over the entire nation would be added to the clout of the industrialists IG. This would also make liberal immigration policies slightly less attractive: a large influx of immigrats that cannot be put to work quickly would depress salaries, increasing radicals and potentially triggering civil wars.

The same line of reasoning can be adopted for rural buildings, but this time using considering the clout of landowners vs that of the rural folk. A strong rural folk (i.e. a strong class of small independent farmers) would impose their conditions, thus acquiring higher wages with respect to the aristocrats.

This would give the player two ways to increase the living standards of the poorer strata: a more direct one, via government intervention (i.e. minimum wages & common ownership), and an indirect one, via bolstering the trade unions and the rural folk (or suppressing the industrialists/landowners).

something like this might be good. But perhaps it could be forced upon the capitalists and aristocrats through strike action. I think there ought to be a strike mechanic which is separate from the rng labor strike events. Connecting it to the clout of trade unions might be good too

 

[Blk82]

I would question the ability of unions to raise wages, especially for unskilled labor. America got to the roaring 20's without much in terms of labor protections and regulations. Most of the increase in wages was due to high capital to labor costs ratios, so increasing wages to reduce absenteeism and worker turnover pays off is direct labor is only a small fraction of the total operating costs. Additionally, the rise in wages is due to unskilled labor being replaced by skilled occupations.

 

[Paul93]

something like this might be good. But perhaps it could be forced upon the capitalists and aristocrats through strike action. I think there ought to be a strike mechanic which is separate from the rng labor strike events. Connecting it to the clout of trade unions might be good too

Nice idea. Actually, the occurrence rate and severity of your "strike" events can be tied to the trade unions vs industrialists clout.

I would question the ability of unions to raise wages, especially for unskilled labor. America got to the roaring 20's without much in terms of labor protections and regulations. Most of the increase in wages was due to high capital to labor costs ratios, so increasing wages to reduce absenteeism and worker turnover pays off is direct labor is only a small fraction of the total operating costs. Additionally, the rise in wages is due to unskilled labor being replaced by skilled occupations.

I would argue that the case you are describing is quite specific. In general terms, strong trade unions are related to a more equitable distribution of wealth, which in game terms means higher wages in profitable industries. I would also argue that the wage rise due the replacement of unskilled workers is already present in game in the form of different production methods.

In order to represent the "high capital, low labor" cost situation, a third condition may be introduced in-game. If wages represent a fraction of the total input cost smaller than a given value, then wages can be increased even if the trade unions are weaker than the industrialists. Since the production methods with the most expensive input goods are available in late game, this condition would be satisfied more often in the last 20-30 years and in the most advanced economies, which align nicely with the real historical occurrence that you put forth.

 

[Amorenkaire]

I'd say the issue of wage increase isn't bad, but the formula for it is. Right now its a multiplier to a value determined by the average Standard of Living of a state. This seems to somewhat be meant to model how in reality we have very high urbanized states (e.g., California's west coast cities, New York City, etc) with very high wages compared to more rural regions, even in that state - but in reality a lot of the reason for these higher wages is because of the significantly higher cost of living in these states due to things such as rent and labor costs. In Victoria 3, such disproportionate costs to pops consumption don't happen if market access is 100% in the state.

Now, pops SHOULD demand a wage to at least support their current standard of living, and if they decide to remain unemployed and burn through their 'savings' until their standard of living decreases, they'll slowly start settling for less and less until they either radicalize into revolution or find a job. But if 100k capitalists chill out in NYC should that mean the laborers working the lumber yards in rural New York be paid 2-3 times that of a lumber mill worker in Maine? Not exactly sold on it.

A more important factor, especially if we want to model things such as labor unions, is the labor pool. Many of the worst abuses in the early industrial revolution came from the fact that the pool of potential workers was so plentiful compared to factories that were starting to get going that if a person wasn't happy with the low wage and risky working conditions they were being offered, the owners can just hire someone else. If a worker died, the owner would pay out whatever reimbursements the worker agreed to in their contract to their family and go hire someone else who was just as eager to take the job despite the danger, because even these 'exploitative' wages were perceived to be better than the back breaking low income farm labor in rural areas.

However, even in areas without strong labor unions, such exploitation comes to less and less prominence as the demand for workers rises, and workers gain bargaining power that allows them to demand higher wages, safer working conditions, etc. (A recent, albeit done via artificial government action, was the employee crises the US had a few years ago, when unemployment payments were very high from Pandemic and Economic relief efforts, repressing the labor pool as many decided to remain on unemployment than seek a job, and thus caused truly head scratching offers for even entry level service jobs like McDonalds in a few states). Concievably, a completely laissez-faire economy that manages to navigate Industrialization should have a 'quite content', high standard of living labor force as free labor diminishes and cost of goods decline (after all, a pop making half as much as another while the cost of goods are also half would be just as happy. This was actually what I thought the balance would be from the dev diary, free market economies like the USA increasing the SoL of their pops via massive goods production, where as more socialist ones would inflate wages while having more expensive goods because of those inflations - which would also ironically make socialist leaning countries benefit substantially from capitalist exports).

That being said, the conditions at the start during the growing pains of industrialization would certainly ferment the soil for collective bargaining as workers try to artifically inflate their bargaining power despite the plentiful competition of workers. Likewise, trade union aligned pops would likely be trying to reduce the competition of employees competing for their labor; reduce emigration, reduce child labor (especially because children would frequently be paid less than an adult for a variety of reasons), prevent women from entering the work force, restrict discriminated pops from being able to be hired (a prominent example being many attempts at a Minimum Wage law being to prevent African-American workers from competing for their labor by artificially rising the price of labor - more educated white Americans could demand a higher wage from the increased productivity they could bring, even before we factor in biases of the employers themselves).

I'd say giving into their demands, though, should largely be for political and social gains, not economic - and in fact would likely reduce economic activity (in game,I imagine from less money flowing into capitalist investment pool would be how that was reflected, therefor slowing construction of new buildings, on top of higher wage prices increasing the cost of goods). It should be a balancing game players would have to juggle, much like governments did in history over the time period. I'd also like the good and bads from all angles and Interest Groups too, and then let players enjoy deciding what sort of country they'd cultivate without an attempt at moralizing them one way or another.

PS: Small little side feature might be alternate systems of payment. English coal miners, for example, used to be paid dependent upon the selling price of coal, so when coal prices were high they made a lot of money, if their was a price crash they made less. This lead to a union of coal workers forming who wanted a set standard pay... Which inadvertently caused them to be paid less as the price of coal rose and their unions demands for increased pay lagged behind. Sometimes unions make things worse even with good intentions.

 

[Mithkabob]

There is definitely a lot of room for improvement to the system.

I've been testing impacts of what the game might look like under 1.1 by creating a mod to tweak some of the numbers. Right now I have it set on 0.65 as the threshold for raising wages, so only if the building has 65% pure profit does it consider raising wages, which actually works fairly well for most businesses. I might have to raise the minimum rate a bit more because I think it can end up as 1/week if the building isn't profitable which puts the workers at starvation levels.

In competitive states the labor rate still ends up raising fairly high without the profit wage increases being the driving factor, especially if trade centers get involved since their "wages" are entirely the profits from trade.

For trade union vs. industrialist IG, well let's just say after the wage changes I don't think the trade union will have much of a chance without some other balance changes. Also the wage fight would need to consider what to do with industries without capitalists, either because they are early game or non-industrialized methods or because they got rid of the industrialists entirely.

 

[PedroLuiz]

Hi everyone!

One, hotly contested feature of the current version (1.0.6) of Vic3 is the fact that Capitalists and Aristocrats are far too keen to increase the wage of their workers. This is clearly not good for the game, since it guarantees an automatic way to increase the standard of living of people, independent of both the political (i.e. the government intervention) and the social (i.e. the strength of the trade unions) situation of the country. It also stifles the in-game fight between capitalism and socialism, which was one of the most important flashpoints of the XIX century politics.

Altruistic capitalists were (and are) not something you see very often. However, despite their best efforts to prove the contrary, they have hearts and can feel emotions. In particular, as all the other humans, their heart can be filled with fear. And it is this fear that induce them to increase wages.

As such, my proposal is the following: instead of eliminating altogether automatic wage increases, as it may be the case in in the next update, I would make them happen only when the clout of trade unions IG is higher than that of industrialists IG.

If trade unions are weak compared to industrialists, then even the most profitable industry will not share its own success with the workers, and will instead redirect the extra-profits to the owners. Instead, if the opposite happens, then part of these profits will go to the workers over time (just as it happens now). If trade unions are very strong (like, their clout is more than 20% over that of industrialists), then this process would happer quicker and worker wages would increase more.

Together with this, I would add another source of clout to industrialists in the form of unemployed: the percentage of unemployed people calculated over the entire nation would be added to the clout of the industrialists IG. This would also make liberal immigration policies slightly less attractive: a large influx of immigrats that cannot be put to work quickly would depress salaries, increasing radicals and potentially triggering civil wars.

The same line of reasoning can be adopted for rural buildings, but this time using considering the clout of landowners vs that of the rural folk. A strong rural folk (i.e. a strong class of small independent farmers) would impose their conditions, thus acquiring higher wages with respect to the aristocrats.

This would give the player two ways to increase the living standards of the poorer strata: a more direct one, via government intervention (i.e. minimum wages & common ownership), and an indirect one, via bolstering the trade unions and the rural folk (or suppressing the industrialists/landowners).

So you are telling me you want union busting a national security matter
Because if the union causes my investment pool to shrink they will hear from me and my secret police

 

[Paul93]

A more important factor, especially if we want to model things such as labor unions, is the labor pool. Many of the worst abuses in the early industrial revolution came from the fact that the pool of potential workers was so plentiful compared to factories that were starting to get going that if a person wasn't happy with the low wage and risky working conditions they were being offered, the owners can just hire someone else. If a worker died, the owner would pay out whatever reimbursements the worker agreed to in their contract to their family and go hire someone else who was just as eager to take the job despite the danger, because even these 'exploitative' wages were perceived to be better than the back breaking low income farm labor in rural areas.

Definitely, and in fact I think that this should be represented as a source of clout for the industrialists IG.

I'd say giving into their demands, though, should largely be for political and social gains, not economic - and in fact would likely reduce economic activity (in game,I imagine from less money flowing into capitalist investment pool would be how that was reflected, therefor slowing construction of new buildings, on top of higher wage prices increasing the cost of goods). It should be a balancing game players would have to juggle, much like governments did in history over the time period. I'd also like the good and bads from all angles and Interest Groups too, and then let players enjoy deciding what sort of country they'd cultivate without an attempt at moralizing them one way or another.

Fully agree. In fact, removing the automatic wage increases and substituting with something related to the relative strengths of IG (including the effects of large/small labor pools) should give the player both an additional challenge in balancing the requests of different IGs and a new, indirect tool to shape the society to its own vision.

While I have fairly strong personal opinions concerning what is, in the real world, the best system, I would really like to have a lot of different, equally viable and meaningful paths to follow in-game.

In competitive states the labor rate still ends up raising fairly high without the profit wage increases being the driving factor, especially if trade centers get involved since their "wages" are entirely the profits from trade.

I think this is good and not in contrast with the proposal, since it mostly revolves around wages in factories and farms.

To clarify, I don't think that the strength of the trade unions was the ONLY factor that pushes wages up. However I do think it was (and is) important in negotiating better economic conditions.

For trade union vs. industrialist IG, well let's just say after the wage changes I don't think the trade union will have much of a chance without some other balance changes. Also the wage fight would need to consider what to do with industries without capitalists, either because they are early game or non-industrialized methods or because they got rid of the industrialists entirely.

Agree, obviously this suggestion can't be applied without other changes to the overall balance of IGs. Maybe, a new set of laws concerning the rights to unionize can be added, in which more progressive legislation provides a bonus to the clout of the trade unions IG. Also, random and non-random events can helpby favoring one faction over the other.

So you are telling me you want union busting a national security matter
Because if the union causes my investment pool to shrink they will hear from me and my secret police

Yes! I think this is far more realistic and interesing than the unnatural harmony between trade unions, industrialists and the government (i.e. the player) that we have now.

 

[Fawr]

There is lots good in this. I really like unemployment strengthening the hand of the industrialists.

What about having lots of subsistence farming (or lots of peasants) strengthening the hand of the landed class. Maybe with a lot more peasants needed for the same effect.

 

[Amorenkaire]

There is lots good in this. I really like unemployment strengthening the hand of the industrialists.

What about having lots of subsistence farming (or lots of peasants) strengthening the hand of the landed class. Maybe with a lot more peasants needed for the same effect.

That's already a thing I believe. The more subsitence farms/peasants the more aristocrats, therefor the more landowner clout.

 

[Fawr]

That's already a thing I believe. The more subsitence farms/peasants the more aristocrats, therefor the more landowner clout.

I was thinking of a multiplier to that existing effect, and by applying it to subsistance farms it would naturally decay over time (aristocrats in advanced farms, and buildings like fine art wouldn't create the multiplier).

I guess it depends if 1.1 has done enough to buff the landowners in the early game (but not in the late game).