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> So your salary is your share of the profits in any pragmatic sense. Okay, so I'm getting a tiny fraction compared to everyone else. Again, this is a fairly p

> So your salary is your share of the profits in any pragmatic sense. Okay, so I'm getting a tiny fraction compared to everyone else. Again, this is a fairly pedantic tangent and no matter how we define these things, my observation seems to be accurate. Again, this sub-thread about the definition of profit is both tangential and unrelated to my original point. I think the standard accounting definition is pretty useless and silly in the context of modern large firms, but that seems like a discussion for another day. > This isn't MBA level stuff By MBA stuff I don't mean "useless econ 101 terms". What I mean is "aligning engineering talent with value creation", which AFAIK isn't taught is basic accounting courses...? The author of the post suggested this alignment is an engineer's job. But the whole point of a firm is that the MBAs do that and the engineers focus on building things. That's my point -- that in the context of a large firm, the author is wrong. Of course, joining a large firm means that your own compensation is disconnected from the value the firm creates. And that can mean less share of compensation, especially when the firm is doing well. But it also means you can make a good living without becoming a Monday morning economist. I don't really care about defining profit "correctly" according to accounting terminologists because I think a well-meaning reader can completely understand the point that I'm making in my original comment without this aside.

WalterBright 9y ago
> that in the context of a large firm, the author is wrong. An accountant serves two roles in a company. One is to produce a correct set of books for the investors and the tax man. The other is to determine the value to the business of things the business is spending money on. I.e. to determine the value produced by the engineers. They may get it wrong, as at some level it is indeterminate, but the more correct they calculate it, the more efficiently and effectively the business can allocate its resources. This calculated value determines, for example, what they're willing to offer you in salary. If they overvalue you, you're likely to get laid off, or more likely, no raises. If they undervalue you, they're likely to give you a raise to keep you from leaving. In my experience, individual engineers tend to have a large disconnect in their opinions on what value they deliver vs reality. If you believe your compensation is way under your opinion of your contribution, it is worth taking a good hard look at it, and deciding if you are better off getting another job.
- WalterBright 9y ago
  P.S. if it isn't obvious, companies who tend to be way off in determining the value of their engineers tend to go out of business.
- zzzcpan 9y ago
  > This calculated value determines, for example, what they're willing to offer you in salary. It doesn't. This is mostly a binary thing of whether the company can afford to pay an employee a bit above his market value or not, if we are talking about engineers of course. Such employee cannot actually get paid proportionally to the value he brings to the company.
  - nostrademons 9y ago
    If they can't afford to pay your market value, you should leave and go work for a company that can. That's how you set your "market value" - go out on the market and see what price you get. If you can't get a higher offer, than your current salary is your market value. How much value the engineer brings in (to a given employer) is basically the ceiling on bids that employer will make. It's completely economically rational for you to find the employer that values your work the most when you're searching for a job, because they'll be willing to pay the most.
    - zzzcpan 9y ago
      I would add that job market is only a market when employers are bidding on candidates and people are looking for jobs. The rest of the time it is not a market anymore, as bids are not open and not visible to anyone. So during this time employees slowly undervalue themselves by not participating in a market and employers benefit by not paying the market value and trying to keep employees as long as possible in this situation, essentially always underpaying even that. EDIT: This was all about short term and mid term behavior. I would like to mention that long term employers and investors can influence job market and increase competition among workers, pushing wages even further down.
    - barrkel 9y ago
late2part 9y ago
This is all explained here: https://www.amazon.com/Capital-Critique-Political-Economy-Vol/dp/1453716548 https://www.amazon.com/Capital-Critique-Political-Economy-Vo...
- throwawayjava 9y ago
  Really? I think the theories that I'm drawing on here -- about the role of the firm and so on -- are much more neo-classical than Marxist. Maybe you're confused by the second paragraph of my post. That wasn't intended to be read with any sort of moral indignation or as a suggestion that engineers ought to capture more of that value. Rather, it was a sincere question and the answer was "you've traded your ability to capture that value for the ability to work in an environment where you don't have to think strategically about the business and can focus on your engineering work".

WalterBright 9y ago

> that in the context of a large firm, the author is wrong. An accountant serves two roles in a company. One is to produce a correct set of books for the investors and the tax man. The other is to determine the value to the business of things the business is spending money on. I.e. to determine the value produced by the engineers. They may get it wrong, as at some level it is indeterminate, but the more correct they calculate it, the more efficiently and effectively the business can allocate its resources. This calculated value determines, for example, what they're willing to offer you in salary. If they overvalue you, you're likely to get laid off, or more likely, no raises. If they undervalue you, they're likely to give you a raise to keep you from leaving. In my experience, individual engineers tend to have a large disconnect in their opinions on what value they deliver vs reality. If you believe your compensation is way under your opinion of your contribution, it is worth taking a good hard look at it, and deciding if you are better off getting another job.

WalterBright 9y ago
P.S. if it isn't obvious, companies who tend to be way off in determining the value of their engineers tend to go out of business.
zzzcpan 9y ago
> This calculated value determines, for example, what they're willing to offer you in salary. It doesn't. This is mostly a binary thing of whether the company can afford to pay an employee a bit above his market value or not, if we are talking about engineers of course. Such employee cannot actually get paid proportionally to the value he brings to the company.
- nostrademons 9y ago
  If they can't afford to pay your market value, you should leave and go work for a company that can. That's how you set your "market value" - go out on the market and see what price you get. If you can't get a higher offer, than your current salary is your market value. How much value the engineer brings in (to a given employer) is basically the ceiling on bids that employer will make. It's completely economically rational for you to find the employer that values your work the most when you're searching for a job, because they'll be willing to pay the most.
  - zzzcpan 9y ago
    I would add that job market is only a market when employers are bidding on candidates and people are looking for jobs. The rest of the time it is not a market anymore, as bids are not open and not visible to anyone. So during this time employees slowly undervalue themselves by not participating in a market and employers benefit by not paying the market value and trying to keep employees as long as possible in this situation, essentially always underpaying even that. EDIT: This was all about short term and mid term behavior. I would like to mention that long term employers and investors can influence job market and increase competition among workers, pushing wages even further down.
  - barrkel 9y ago

late2part 9y ago

This is all explained here: https://www.amazon.com/Capital-Critique-Political-Economy-Vol/dp/1453716548 https://www.amazon.com/Capital-Critique-Political-Economy-Vo...

throwawayjava 9y ago
Really? I think the theories that I'm drawing on here -- about the role of the firm and so on -- are much more neo-classical than Marxist. Maybe you're confused by the second paragraph of my post. That wasn't intended to be read with any sort of moral indignation or as a suggestion that engineers ought to capture more of that value. Rather, it was a sincere question and the answer was "you've traded your ability to capture that value for the ability to work in an environment where you don't have to think strategically about the business and can focus on your engineering work".