alt Hacker NewsIf an “industry’s labour [is] supplied only by those inherently passionate about it” the post says it would “crush wages and working conditions”.
That runs completely counter to the basics of supply and demand in a perfect competition market. It would be market with far fewer (labor) suppliers, who could therefore command a higher wage, not lower.
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You are only looking at supply. Neither supply nor demand by themselves adequately describe prices (even in supply-demand 101 theory; in practice of course it gets significantly more complicated than just supply and demand). There are fields with few suppliers where supply is extremely cheap and fields with few suppliers where supply is extremely expensive.
Is the number of suppliers low because demand is also low or is the number of suppliers low because demand is high but supply is constrained?
A field that previously had a supply of labor in it "for the money" who all leave is indicative of the former scenario not the latter.
That does not lead to higher wages. That leads to low wages.
(There are a variety of reasons why this story is too simple and why I remain uncertain about developer salaries in the short term)
There is a broader question of whether having people who are in it for the money leave independently "causes" wages to go down (e.g. if you were to replace all such people with people "purely in it for the passion"). My suspicion is yes. Mainly because wage markets are somewhat inefficient, there are always mild cartel-like/cooperative effects in any market, people in it for passion tend to undersell labor and the people in it for the money are much less likely to undersell their labor and this spills over beneficially to the former.
Note that this broader question is simply unanswerable assuming perfect competition, i.e. a supply-demand 101 perspective (which is why it doesn't make sense to posit "perfect competition" for this question).
It posits durable behavioral differences among suppliers that are not determined purely by supply and demand which do not update reliably in the face of pricing. This is equivalent to market friction and hence fundamentally contradicts an assumption of perfect competition.
To use your example of someone working on the plumbing of an accounts payable system, who is passionate about that? The supply is near zero. That, like most jobs, is going to need to be done entirely by people who are just doing it for the money, and there is nothing wrong with that.
Your example runs counter to the laws of supply and demand too. You understand that wages will rise when supply is restricted, but you don't want to accept that supply will respond to the price signal in the form of more people entering that job market.
Except that there are a LOT of people that want to work in video games (which is the supply) which then depresses the price (wages)
All of my developer friends in the gaming industry have had far worse working conditions then what I've had.
The only way the people who are only in it for the money leave the industry is if the money gets worse. If the money stays the same why would they leave