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How much you pay should be determined by the market and how much profit each person contributes the company. Instead managers have driven this figure down to th

by devoply 10y ago

How much you pay should be determined by the market and how much profit each person contributes the company. Instead managers have driven this figure down to the point where salaries don't in any way reflect the value being generated, and does not even match inflation. That's because the market isn't working, instead the managers are deciding and since they are all in implicit collusion with each other the market does not have the chance to actually work. The recent debacle of agreeing not to poach between the big 5 companies was explicit proof of this sort of thing occurring explicitly instead of implicitly. But it's managers who determine the pay structure not the market. And they keep on keeping it low by complaining about lack of workers. Getting H1Bs in to the country. Forcing pro immigration policies when the local population does not have job. It's all a conceited effort to diminish salaries. And they really are not affected by how it impacts their company. Company has billions sitting in the bank. As long as H/R does its job, i.e. keeping the salaries low, none of these sorts of people get fired. So they keep on. The work doesn't get done, but the CEO doesn't care. Enough profit is being generated, enough costs are being cut. Who cares if the economy has to pay for this sort of thing. It's not the people who are actually making the decisions. Small businesses depend on money from big companies paid out to employees to thrive. If they don't have it small business does not get done. But it's not as if that affects the managers making the decisions, so they keep on.

gnopgnip 10y ago
Without all of those managers and admin and sales doing what they do the engineers wouldn't be able to generate as much value. How do you decide who is responsible for the value and how everyone should be paid? If you can do it better than it is done traditionally, start your own company and eat their lunch.
- devoply 10y ago
  > If you can do it better than it is done traditionally, start your own company and eat their lunch. You can't make a company do anything objectively better through these insights, though in specific cases things would get done sooner, and even if you could which company is going to listen to someone saying that they should pay their employees more. In fact lots of management "wisdom" goes exactly against that, they see their engineers as idiots manipulated by pop psychology. Not people who deserve to get wealthy. It's just that operationally they adversely affect the economy, not necessarily the company. As I said usually the companies exercising this sort of behavior are already doing well. They have plenty of profit and plenty of money in the bank. It's those size of companies that have the sort of managerial class that practices this sort of behavior. And the managerial class justifies it, and the CEO believes it, so it continues. Who pays is the economy at large, and engineers who are not becoming wealthy who continue to be wage slaves. But lots of CEOs and managers believe that this is exactly how things should be. You can't change this by starting your own company. Because then you are a CEO or a manager. And if one company pays their employees well and does well, well that changes very little. Companies are simply systems, there are many ways to run them and still be profitable.
- dsp1234 10y ago
  I work at a tech heavy SaaS company, but in reality, we're really a sales company. I have recognized this, and have excelled because of it.
  - mooreds 10y ago
    Isn't every company a sales company, in reality?
    - devoply 10y ago
      My argument was not even about sales. So I don't know how it got thrown in there. Sales are important, marketing people are important, managers are important. That's not the issue that concerns me. It's this sort of behavior where you supposedly have a labor market, but it's not really a market, that concerns me. The markets regulate themselves with the value of labor going up with the value that it generates in the market through competition for finite resources. But here we have some sort of pseudo slavery, where a worker is only justified enough money to maintain their living while companies are deriving multiples of value from their work without competing for their services. It's as if I were selling a product, and the middle man as a class were forcing a price through collusion so they could make a massive profit on it. That in law is called unjust enrichment and it's illegal.
      - mooreds 10y ago
        Ah, I was replying to the parent comment, but your point is interesting. > where you supposedly have a labor market Anyone who thinks we have an econ 101 labor market (where what is being sold is fungible and easily tradeable) hasn't searched for a job recently. Unlike capital, where a dollar is typically a dollar no matter where it comes from (though the idea of "smart money" implies that this statement is false), labor has many gradations and suppliers that vary. Because of that, and because of the fact that employers have more leverage (because they typically are a monopsony of a particular laborer's offering), prices of labor are not equal to the marginal productivity of that laborer, but instead, as you argue, far lower. The solution is pretty simple: the laborer should stop being an employee, start their own firm, bear more of the risk that an employer does (ever chase down an invoice? No fun!), and get compensated as such. Other than that, you could organize and have the group (formerly called a union) compete with management for a greater share of profits, but the variation in laborer productivity would still exist and the more productive laborer would still be under compensated.

by devoply 10y ago

gnopgnip 10y ago

Without all of those managers and admin and sales doing what they do the engineers wouldn't be able to generate as much value. How do you decide who is responsible for the value and how everyone should be paid? If you can do it better than it is done traditionally, start your own company and eat their lunch.

devoply 10y ago
> If you can do it better than it is done traditionally, start your own company and eat their lunch. You can't make a company do anything objectively better through these insights, though in specific cases things would get done sooner, and even if you could which company is going to listen to someone saying that they should pay their employees more. In fact lots of management "wisdom" goes exactly against that, they see their engineers as idiots manipulated by pop psychology. Not people who deserve to get wealthy. It's just that operationally they adversely affect the economy, not necessarily the company. As I said usually the companies exercising this sort of behavior are already doing well. They have plenty of profit and plenty of money in the bank. It's those size of companies that have the sort of managerial class that practices this sort of behavior. And the managerial class justifies it, and the CEO believes it, so it continues. Who pays is the economy at large, and engineers who are not becoming wealthy who continue to be wage slaves. But lots of CEOs and managers believe that this is exactly how things should be. You can't change this by starting your own company. Because then you are a CEO or a manager. And if one company pays their employees well and does well, well that changes very little. Companies are simply systems, there are many ways to run them and still be profitable.
dsp1234 10y ago
I work at a tech heavy SaaS company, but in reality, we're really a sales company. I have recognized this, and have excelled because of it.
- mooreds 10y ago
  Isn't every company a sales company, in reality?
  - devoply 10y ago
    My argument was not even about sales. So I don't know how it got thrown in there. Sales are important, marketing people are important, managers are important. That's not the issue that concerns me. It's this sort of behavior where you supposedly have a labor market, but it's not really a market, that concerns me. The markets regulate themselves with the value of labor going up with the value that it generates in the market through competition for finite resources. But here we have some sort of pseudo slavery, where a worker is only justified enough money to maintain their living while companies are deriving multiples of value from their work without competing for their services. It's as if I were selling a product, and the middle man as a class were forcing a price through collusion so they could make a massive profit on it. That in law is called unjust enrichment and it's illegal.
    - mooreds 10y ago
      Ah, I was replying to the parent comment, but your point is interesting. > where you supposedly have a labor market Anyone who thinks we have an econ 101 labor market (where what is being sold is fungible and easily tradeable) hasn't searched for a job recently. Unlike capital, where a dollar is typically a dollar no matter where it comes from (though the idea of "smart money" implies that this statement is false), labor has many gradations and suppliers that vary. Because of that, and because of the fact that employers have more leverage (because they typically are a monopsony of a particular laborer's offering), prices of labor are not equal to the marginal productivity of that laborer, but instead, as you argue, far lower. The solution is pretty simple: the laborer should stop being an employee, start their own firm, bear more of the risk that an employer does (ever chase down an invoice? No fun!), and get compensated as such. Other than that, you could organize and have the group (formerly called a union) compete with management for a greater share of profits, but the variation in laborer productivity would still exist and the more productive laborer would still be under compensated.