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Actually we have known for a long time that most people's salaries are completely decoupled from the value they create. I've never seen anyone claim the opposi

Actually we have known for a long time that most people's salaries are completely decoupled from the value they create. I've never seen anyone claim the opposite except for business owners and middle management. Everyone wages are more so tied to how much leverage they have. Increasing one's output has never been a great recipe for increasing compensation, however, increasing your leverage (get a new offer, get a government certified monopoloy, lower the supply of people with your skills, etc) will do wonders for your wage! Seriously, though.

_Tev 9y ago
When you say it like that you can naturally follow with "creating bigger value for the company increases your leverage", which seems to be trivially true. You might question rate of leverage increase between your value / other factors, but ranting about "decoupling" seems simply wrong.
- tiggybear 9y ago
  Besides my own personal observations, I have heard and read so many anecdotes of people who can't get a decent raise to save their life until they have a competing offer. All of a sudden the company is happy to give them an extra 20% despite the employee not increasing their output. I see your point and while I think their is some merit to it, I think it boils down to, "If you were a boss, how would you calculate how much someone's salary should be?" I think the answer will reveal that you look at the market for a general range and use information asymmetry to push an employee's salary down as far as you can get it. Except the work they will be doing is often not a 1:1 at any other company, a good number of people can output 5-10x as much work as the worst employee but salaries never range that much except for in sales, etc. etc. etc. There's no reasonably efficient way to calculate someone's true value to the company (at least without a team of people dedicated to studying the inner workings of the company and the economy at large), so we rely on proxy measurements like leverage.

_Tev 9y ago

When you say it like that you can naturally follow with "creating bigger value for the company increases your leverage", which seems to be trivially true. You might question rate of leverage increase between your value / other factors, but ranting about "decoupling" seems simply wrong.

tiggybear 9y ago
Besides my own personal observations, I have heard and read so many anecdotes of people who can't get a decent raise to save their life until they have a competing offer. All of a sudden the company is happy to give them an extra 20% despite the employee not increasing their output. I see your point and while I think their is some merit to it, I think it boils down to, "If you were a boss, how would you calculate how much someone's salary should be?" I think the answer will reveal that you look at the market for a general range and use information asymmetry to push an employee's salary down as far as you can get it. Except the work they will be doing is often not a 1:1 at any other company, a good number of people can output 5-10x as much work as the worst employee but salaries never range that much except for in sales, etc. etc. etc. There's no reasonably efficient way to calculate someone's true value to the company (at least without a team of people dedicated to studying the inner workings of the company and the economy at large), so we rely on proxy measurements like leverage.