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In tech, when your employer hires you as an engineer, they hope they're getting 10x your cost back in value each year, at a minimum a startup needs to get 2x re

In tech, when your employer hires you as an engineer, they hope they're getting 10x your cost back in value each year, at a minimum a startup needs to get 2x return to cover debt obligations with growth, on average they get 3-5x. You can get a rough estimate (with profit or earnings as a proxy for capital growth) by looking up a company's (or sector's) profit per employee. These are averages and not reflective of engineering roles. Walmart: ~5-6k profit per employee (Q3) Exxon: 176k profit per employee (Q3) Facebook[0]: 1.7M profit per employee (Q3) Apple: 522k profit per employee (Q3) Internet Services & Social Media sector average: 497k profit per employee Internet Services & Social Media sector average: 2.1M revenue per employee A competitor can/should/will try to steal you from your current employer with a higher compensation if they can extract good surplus value from you, relative to anyone else. The last part (relative to anyone else) is the crux of the situation, everyone selling their labor is doing so at a massive discount because of the competition in the labor pool. You can't actually demand anything close to your value because somebody else will undercut you. The people/firms that can demand the highest percentage of their value as compensation are those with the most unique skills, those for whom few alternatives in the pool exist. [0] https://csimarket.com/stocks/FB-Efficiency-Comparisons.html https://csimarket.com/stocks/FB-Efficiency-Comparisons.html

saint_fiasco 9y ago
> You can't actually demand anything close to your value because somebody else will undercut you. I'm confused by this part. If a person can undercut you, they can do what you do for less money. That means your value was not as high as you thought. We might be using different definitions of value. I'm using "replacement value", and I think you are using something like Marx's "use value".

saint_fiasco 9y ago

> You can't actually demand anything close to your value because somebody else will undercut you. I'm confused by this part. If a person can undercut you, they can do what you do for less money. That means your value was not as high as you thought. We might be using different definitions of value. I'm using "replacement value", and I think you are using something like Marx's "use value".