5 ms·

You could view it a different way. You could view that he did act in the best interests of his shareholders; if you pay your employees poorly they aren't as ef

You could view it a different way. You could view that he did act in the best interests of his shareholders; if you pay your employees poorly they aren't as effective which hurts profits. Two sides of the same coin.

Me1000 10y ago
That also assumes that the market equilibrium for every job is at least $70,000, which it probably is not.
- Jtsummers 10y ago
  Paying over the market value for the employees is a pretty powerful motivator for them. If they're in a job that normally gets $30k/year, and now they're recieving an extra $40k, they don't want to risk going back out in the job market.
  - cookiecaper 10y ago
    If you really want to keep your employees stuck, the key is to over-pay them. The vast majority of people immediately scale up their obligations to maximize the entire breadth of their paycheck (or at the very least, they become accustomed to having a large amount of disposable income). If they'd have to take a 30%+ pay cut to get employed by another company, most employees literally can't leave without risking financial ruination, and it's certainly not a pleasant prospect in any case. Over my career, the saddest, most stuck employees have been those whose salaries outstrip anything they could get if they go back on the market. It's wise to think carefully before accepting a salary that is much higher than normal, because it's likely that you'll have a very difficult time leaving.
    - hx87 10y ago
      It's less of a problem if you spend and borrow as if you were making market average salary.
    - physicalist 10y ago
      First world problems never get old! :-D
    - croon 10y ago
      Am I the only one thinking "serves them right"? I have never understood people aligning their lifestyle to their limits. Find a lifestyle and hobbies and people you enjoy. If that is dependent on a lot more money than other people can get by on just fine... Suit yourself. Otherwise you should have a huge safety net when you finally decide to switch jobs to something that makes you happier.
      - dpark 10y ago
        > I have never understood people aligning their lifestyle to their limits. It's almost as if people enjoy luxuries. I assume you live in a rented bedroom and eat mostly packaged ramen while saving 90% of your take-home pay?
        clock_tower 10y ago
        Stinting yourself and wasting money aren't the only two options; look up The Old Money Book for a third. If your purchases are timeless and long-lasting -- if your durable goods are genuinely durable -- you can live surprisingly well while spending surprisingly little.
        dpark 10y ago
        Obviously you can and should spend you money wisely. You should not live paycheck to paycheck if you can avoid it. You also should not hoard all of your money and live a miserable penny pinching life unless that somehow makes you happy. But this is boring advice that everyone knows. The reality is that people tend to spend most or all of what they earn. People like to own nice homes and nice vehicles and take nice vacations etc etc. When someone says something like "I don't understand why people spend all their money", it's just pretension. They know exactly why people spend all their money. Money buys nice things and nice experiences. It's a good idea to live beneath your means, but it's a different thing to pretend that typical behavior is somehow incomprehensible. Also, buying quality doesn't stop you from spending all your money. It is extremely easy to spend all your money on quality stuff that you don't really need and justify it as "buying quality" or "buying once".
- dpark 10y ago
  "Market equilibrium" seems like a great place to be if you want to cultivate no employee loyalty. "How are your pay and benefits?" "Definitely not better than any of our competitors'!"

Me1000 10y ago

That also assumes that the market equilibrium for every job is at least $70,000, which it probably is not.

Jtsummers 10y ago
Paying over the market value for the employees is a pretty powerful motivator for them. If they're in a job that normally gets $30k/year, and now they're recieving an extra $40k, they don't want to risk going back out in the job market.
- cookiecaper 10y ago
  If you really want to keep your employees stuck, the key is to over-pay them. The vast majority of people immediately scale up their obligations to maximize the entire breadth of their paycheck (or at the very least, they become accustomed to having a large amount of disposable income). If they'd have to take a 30%+ pay cut to get employed by another company, most employees literally can't leave without risking financial ruination, and it's certainly not a pleasant prospect in any case. Over my career, the saddest, most stuck employees have been those whose salaries outstrip anything they could get if they go back on the market. It's wise to think carefully before accepting a salary that is much higher than normal, because it's likely that you'll have a very difficult time leaving.
  - hx87 10y ago
    It's less of a problem if you spend and borrow as if you were making market average salary.
  - physicalist 10y ago
    First world problems never get old! :-D
  - croon 10y ago
    Am I the only one thinking "serves them right"? I have never understood people aligning their lifestyle to their limits. Find a lifestyle and hobbies and people you enjoy. If that is dependent on a lot more money than other people can get by on just fine... Suit yourself. Otherwise you should have a huge safety net when you finally decide to switch jobs to something that makes you happier.
    - dpark 10y ago
      > I have never understood people aligning their lifestyle to their limits. It's almost as if people enjoy luxuries. I assume you live in a rented bedroom and eat mostly packaged ramen while saving 90% of your take-home pay?
      - clock_tower 10y ago
        Stinting yourself and wasting money aren't the only two options; look up The Old Money Book for a third. If your purchases are timeless and long-lasting -- if your durable goods are genuinely durable -- you can live surprisingly well while spending surprisingly little.
        dpark 10y ago
        Obviously you can and should spend you money wisely. You should not live paycheck to paycheck if you can avoid it. You also should not hoard all of your money and live a miserable penny pinching life unless that somehow makes you happy. But this is boring advice that everyone knows. The reality is that people tend to spend most or all of what they earn. People like to own nice homes and nice vehicles and take nice vacations etc etc. When someone says something like "I don't understand why people spend all their money", it's just pretension. They know exactly why people spend all their money. Money buys nice things and nice experiences. It's a good idea to live beneath your means, but it's a different thing to pretend that typical behavior is somehow incomprehensible. Also, buying quality doesn't stop you from spending all your money. It is extremely easy to spend all your money on quality stuff that you don't really need and justify it as "buying quality" or "buying once".
dpark 10y ago
"Market equilibrium" seems like a great place to be if you want to cultivate no employee loyalty. "How are your pay and benefits?" "Definitely not better than any of our competitors'!"