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There's an economic theory that job satisfaction is a kind of compensation. That is, you have to pay people more to do unsatisfying jobs.

evanpw 8y ago
For those who are interested, the phrase to Google is “compensating differential”
exolymph 8y ago
This is just a form of supply and demand. More people want to do $desirable_job or $satisfying_job (and there's plenty of overlap), so you don't have to pay them as much, because there's always another person in line to take the position.
nikanj 8y ago
“Passion” careers are a great example of this. Many people would gladly save the planet or do art for free, so the pay in arts and environmental protection is really low.
interfixus 8y ago
There is such a theory, yes. It has obviously never encountered low-paying, shitty, backbreaking work on the factory floor.
- icebraining 8y ago
  I don't think the theory implies it's the only effect on salaries, only that it's a factor. Obviously when the workers have very few or no alternatives, the effect will be minimal. But I know people who dropped out of college courses that provided a good chance of a middle-class income for a career that fulfilled them more, despite paying like crap. So the effect exists.
ItsMe000001 8y ago
I doubt that top-paying jobs like CEO are undesirable to those people who have them as well as those who would like to have them. On the other hand all really shitty jobs pay nothing - that's true for hundreds of millions, maybe even billions of people worldwide. A >100k$ programmer office job in the US does not belong in the "shitty job" category, no matter how much someone complains online because they are bored while comfortably sitting in their chair waiting for the next big paycheck to arrive reliably. That rule must have been made by one of those super-rich people grumbling about how unfair life treats them and how the government attempts to steal "their" money. https://www.theatlantic.com/entertainment/archive/2012/02/poor-lives-rich-people/331159/ https://www.theatlantic.com/entertainment/archive/2012/02/po...
- randomdata 8y ago
  It's just basic supply and demand. Top paying jobs like CEO are top paying because the supply of trusted people, who boards are willing to hand control over billions of assets to, is vanishingly small. Programming jobs are reasonably well paying because businesses are careful about who they hand their code over to, although not the extreme degree of CEO. And something like fry cook is low paying because those businesses are willing to hire just about anyone. But we cannot completely discount the effects of desirability. If your employment options are fry cook or oil rig worker, most people would prefer fry cook and thus oil rig worker has considerably higher wages due to the aversion to the job, and therefore reduction in supply at the price point of fry cook. Of course, increased compensation can prompt people to look in alternative directions.
  - learc83 8y ago
    It's not just basic supply and demand though. There are many other factors driving up CEO pay. 1. CEO pay at public companies is public, so they feel the need to keep up with other companies. 2. The incestuous relationship between CEOs and the boards of directors that set their pay. CEO compensation isn't tied to performance.
    - randomdata 8y ago
      > 1. CEO pay at public companies is public, so they feel the need to keep up with other companies. That's just basic supply and demand. Since pay is public, people know how much the other party will balk at, affecting the supply. > 2. The incestuous relationship between CEOs and the boards of directors that set their pay. That's just basic supply and demand. Like I said, the people who have that kind of relationship are vanishingly small. > CEO compensation isn't tied to performance. There is no pay that is truly tied to performance. Just basic supply and demand.
      - ItsMe000001 8y ago
        CEO pay is not just supply and demand. You cannot even tell what "supply" even is, because "CEO supply" is nothing that can be well defined. You could make a lot of people CEO from the 2nd and 3rd ranks who also have the experience and knowledge, or you can seek only people who already have been CEOs - which does not guarantee anything at all, because CEO success depends a lot on context and circumstances. CEO supply is extremely flexible based on psychology for one (who you are willing to accept for the role is extremely subjective and based on personal preferences), and can also very easily be changed through actions (whom do you give a chance to learn to lead, and how). So the possible "supply" of CEOs is decided on a whim to a large degree, based on subjectivity (even if it's attempted to be hidden by some "thorough search" - which uses those same subjective criteria and selection heuristics). You misuse economic theory by simply using it to make unsubstantiatable claims pretending that it somehow proves anything as long as you use the right magic words from economic thinking.
RivieraKid 8y ago
That is an economic theory? This seems like an obvious observation that most people should be able to make.

evanpw 8y ago

For those who are interested, the phrase to Google is “compensating differential”

exolymph 8y ago

This is just a form of supply and demand. More people want to do $desirable_job or $satisfying_job (and there's plenty of overlap), so you don't have to pay them as much, because there's always another person in line to take the position.

nikanj 8y ago

“Passion” careers are a great example of this. Many people would gladly save the planet or do art for free, so the pay in arts and environmental protection is really low.

interfixus 8y ago

There is such a theory, yes. It has obviously never encountered low-paying, shitty, backbreaking work on the factory floor.

icebraining 8y ago
I don't think the theory implies it's the only effect on salaries, only that it's a factor. Obviously when the workers have very few or no alternatives, the effect will be minimal. But I know people who dropped out of college courses that provided a good chance of a middle-class income for a career that fulfilled them more, despite paying like crap. So the effect exists.

ItsMe000001 8y ago

I doubt that top-paying jobs like CEO are undesirable to those people who have them as well as those who would like to have them. On the other hand all really shitty jobs pay nothing - that's true for hundreds of millions, maybe even billions of people worldwide. A >100k$ programmer office job in the US does not belong in the "shitty job" category, no matter how much someone complains online because they are bored while comfortably sitting in their chair waiting for the next big paycheck to arrive reliably. That rule must have been made by one of those super-rich people grumbling about how unfair life treats them and how the government attempts to steal "their" money. https://www.theatlantic.com/entertainment/archive/2012/02/poor-lives-rich-people/331159/ https://www.theatlantic.com/entertainment/archive/2012/02/po...

randomdata 8y ago
It's just basic supply and demand. Top paying jobs like CEO are top paying because the supply of trusted people, who boards are willing to hand control over billions of assets to, is vanishingly small. Programming jobs are reasonably well paying because businesses are careful about who they hand their code over to, although not the extreme degree of CEO. And something like fry cook is low paying because those businesses are willing to hire just about anyone. But we cannot completely discount the effects of desirability. If your employment options are fry cook or oil rig worker, most people would prefer fry cook and thus oil rig worker has considerably higher wages due to the aversion to the job, and therefore reduction in supply at the price point of fry cook. Of course, increased compensation can prompt people to look in alternative directions.
- learc83 8y ago
  It's not just basic supply and demand though. There are many other factors driving up CEO pay. 1. CEO pay at public companies is public, so they feel the need to keep up with other companies. 2. The incestuous relationship between CEOs and the boards of directors that set their pay. CEO compensation isn't tied to performance.
  - randomdata 8y ago
    > 1. CEO pay at public companies is public, so they feel the need to keep up with other companies. That's just basic supply and demand. Since pay is public, people know how much the other party will balk at, affecting the supply. > 2. The incestuous relationship between CEOs and the boards of directors that set their pay. That's just basic supply and demand. Like I said, the people who have that kind of relationship are vanishingly small. > CEO compensation isn't tied to performance. There is no pay that is truly tied to performance. Just basic supply and demand.
    - ItsMe000001 8y ago
      CEO pay is not just supply and demand. You cannot even tell what "supply" even is, because "CEO supply" is nothing that can be well defined. You could make a lot of people CEO from the 2nd and 3rd ranks who also have the experience and knowledge, or you can seek only people who already have been CEOs - which does not guarantee anything at all, because CEO success depends a lot on context and circumstances. CEO supply is extremely flexible based on psychology for one (who you are willing to accept for the role is extremely subjective and based on personal preferences), and can also very easily be changed through actions (whom do you give a chance to learn to lead, and how). So the possible "supply" of CEOs is decided on a whim to a large degree, based on subjectivity (even if it's attempted to be hidden by some "thorough search" - which uses those same subjective criteria and selection heuristics). You misuse economic theory by simply using it to make unsubstantiatable claims pretending that it somehow proves anything as long as you use the right magic words from economic thinking.

RivieraKid 8y ago

That is an economic theory? This seems like an obvious observation that most people should be able to make.