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I don't see how fair pay is linked to company profits, if they are paying you market rate for your job, you're not underpaid whether they earn $12/year in profi

I don't see how fair pay is linked to company profits, if they are paying you market rate for your job, you're not underpaid whether they earn $12/year in profits or $12B/year in profits. If the company is earning $12B/year with 12 employees, then the company founders (and early employees who contributed sweat-equity to get the company off the ground) should enjoy their success, but that doesn't mean that they need to pay new hires extravagant amounts of money as a sense of "fairness". I've seen the balance sheet for my company, and right now, our software developers (well, all employees really) are worth negative dollars per year. Sure, our investors (and to a lesser extent our employees) may be rewarded handsomely some years down the road, but it's not the developers money that's on the line - they get a paycheck for as long as the company is in business, and they have no chance of losing any money they invested in the company. Though even if I could snap my fingers and make the company earn $100M/year overnight, there's no way a developer is worth $3M/year.

seiji 11y ago
The concept of "early start" or "sweat equity" resulting in extraordinary reward is a convenient financing meme, but it's not great for reality. It just persists because people like the idea of becoming rewarded more than their contributions. Just because you "got in early" and worked for a year then coast for the next 10 years while other people pull of the business doesn't mean you should get outsized rewards. there's no way a developer is worth $3M/year. Then perhaps your company isn't using developers as efficiently as they could be used? Sure, you can automate a $10 million industry, or you can destroy an $800 billion industry. Not all choices are equal.
- Johnny555 11y ago
  It's not because he got in early and worked for a year, but because he got in early, worked for less (or no) pay than he would have gotten at a more established company. I.e. that developer took on risk, and with risk comes (sometimes) reward. And, his investment may never pay off, the company may never be successful so all of that time and effort spent at low pay may have been for naught. Not all developers can work for companies poised to take over an $800B industry. For every developer in a disruptive company that's going to earn huge rewards, there's 100 developers writing a web backend for a struggling publishing company, or writing integrations for an ERP implementation. (and though that ERP can save the company millions of dollars, that savings is only due in a small part to that single developer's efforts)
  - seiji 11y ago
    Not all developers can work for companies poised to take over an $800B industry. That's the point of managing your own career and your own life, isn't it? Nothing gets handed to you. You have to position yourself for success. that savings is only due in a small part to that single developer's efforts Not if you quit, make it SaaS and sell it to 3,000 companies for $100/month (or even $1,000/month).
    - Johnny555 11y ago
      Not all developers can work for companies poised to take over an $800B industry. That's the point of managing your own career and your own life, isn't it? Well no, it's a market limitation, not every developer can work for companies that are poised to take over an $800B industry. No matter how successful a developer is at such a company, there will still be a need for developers in less lucrative, more mundane jobs. Not if you quit, make it SaaS and sell it to 3,000 companies for $100/month (or even $1,000/month). Again, that's the risk part, not every developer is in a place in his life where he can quit his job with a steady paycheck and work for some speculative startup that may or may not ever become successful. And besides, didn't you just say that developer who quit his job to work at a small startup shouldn't get an outsized reward just because he took that risk to work for an early stage startup?

seiji 11y ago

The concept of "early start" or "sweat equity" resulting in extraordinary reward is a convenient financing meme, but it's not great for reality. It just persists because people like the idea of becoming rewarded more than their contributions. Just because you "got in early" and worked for a year then coast for the next 10 years while other people pull of the business doesn't mean you should get outsized rewards. there's no way a developer is worth $3M/year. Then perhaps your company isn't using developers as efficiently as they could be used? Sure, you can automate a $10 million industry, or you can destroy an $800 billion industry. Not all choices are equal.

Johnny555 11y ago
It's not because he got in early and worked for a year, but because he got in early, worked for less (or no) pay than he would have gotten at a more established company. I.e. that developer took on risk, and with risk comes (sometimes) reward. And, his investment may never pay off, the company may never be successful so all of that time and effort spent at low pay may have been for naught. Not all developers can work for companies poised to take over an $800B industry. For every developer in a disruptive company that's going to earn huge rewards, there's 100 developers writing a web backend for a struggling publishing company, or writing integrations for an ERP implementation. (and though that ERP can save the company millions of dollars, that savings is only due in a small part to that single developer's efforts)
- seiji 11y ago
  Not all developers can work for companies poised to take over an $800B industry. That's the point of managing your own career and your own life, isn't it? Nothing gets handed to you. You have to position yourself for success. that savings is only due in a small part to that single developer's efforts Not if you quit, make it SaaS and sell it to 3,000 companies for $100/month (or even $1,000/month).
  - Johnny555 11y ago
    Not all developers can work for companies poised to take over an $800B industry. That's the point of managing your own career and your own life, isn't it? Well no, it's a market limitation, not every developer can work for companies that are poised to take over an $800B industry. No matter how successful a developer is at such a company, there will still be a need for developers in less lucrative, more mundane jobs. Not if you quit, make it SaaS and sell it to 3,000 companies for $100/month (or even $1,000/month). Again, that's the risk part, not every developer is in a place in his life where he can quit his job with a steady paycheck and work for some speculative startup that may or may not ever become successful. And besides, didn't you just say that developer who quit his job to work at a small startup shouldn't get an outsized reward just because he took that risk to work for an early stage startup?