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You are both getting into a weird sort of definition fight here. Pay is a reflection of market demand, not the monetary value you bring to a company which is n

by pfisch 8y ago

You are both getting into a weird sort of definition fight here. Pay is a reflection of market demand, not the monetary value you bring to a company which is not easily quantifiable. Walmart wouldn't function without someone at the register, but how much "value" that person at the register brings doesn't dictate their salary. The supply of people who could do the same job does.

evrydayhustling 8y ago
What you're saying is true at the bottom end of the job market, where labor is highly exchangeable. At the other side -- say a one of a kind performer, like Beyonce -- price gets set by an auction of gigs, where she accepts those that keep her busy and leave her with the highest margins. In between, where most of us live, neither candidates nor jobs are fully exchangeable, so both value to company and appeal to candidate (however imperfectly estimated) come into play. A hiring manager's job is to pay an employee less than the value they generate, but as much or more than they would get at a job they like just as much. Paying a Utah programmer 80 cents for what a SoMa dev gets a buck for sends the message that (a) you could pay either of them more than a dollar but (b) you could replace either of them for less than .80. Yet (c) for some reason you want them both to have the same left over after paying for their very different apartments.
dragonwriter 8y ago
> Pay is a reflection of market demand, not the monetary value you bring to a company Market demand is itself based on the perception of the hiring parties of the value you would supply. Companies hire people [0] only when they expect that that the cost of doing so will be justified by the return. But, yes, I agree that supply and demand set price, but I just disagree with the idea that those are somehow unrelated to value. > Walmart wouldn't function without someone at the register, but how much "value" that person at the register brings doesn't dictate their salary. The value sets an upper limit to what WalMart will pay, just as the perceived opportunity cost to the worker of taking the job sets the lower limit of pay they’ll accept. The former is demand, the latter supply. [0] outside of hires where a decision maker is funnelling business resources to the hired party as a kind of personal gift, which do happen, sure.
- pathseeker 8y ago
  Value only sets a maximum. It's meaningless when you are talking about giving paycuts to people you know are in cheaper locations.
  - dragonwriter 8y ago
    > Value only sets a maximum. That sounds very much like what said about setting an upper limit, yes. > It's meaningless when you are talking about giving paycuts to people you know are in cheaper locations. Sure, each side is actually seeking the other sides limit price: as an employee, you demand what you think you are worth to the employer; as an employer, you offer what you think the employee is willing to work for (both sides, of course, present this as reflecting their own side rather than their guess of what the other side will accept.) This gets weird when an employer continues to try to do this but tries to have salary transparency, because then they either have to abandon elements that go into their estimate of what employees will accept or make it clear that that' they are targeting an estimate of the employees lower limit.
  - evrydayhustling 8y ago
    What lets you pay them less is not their lower costs, it's the unavailability of higher pay in their area. So if you're going to do it, size it that way and, ideally, call it what it is.

by pfisch 8y ago

evrydayhustling 8y ago

What you're saying is true at the bottom end of the job market, where labor is highly exchangeable. At the other side -- say a one of a kind performer, like Beyonce -- price gets set by an auction of gigs, where she accepts those that keep her busy and leave her with the highest margins. In between, where most of us live, neither candidates nor jobs are fully exchangeable, so both value to company and appeal to candidate (however imperfectly estimated) come into play. A hiring manager's job is to pay an employee less than the value they generate, but as much or more than they would get at a job they like just as much. Paying a Utah programmer 80 cents for what a SoMa dev gets a buck for sends the message that (a) you could pay either of them more than a dollar but (b) you could replace either of them for less than .80. Yet (c) for some reason you want them both to have the same left over after paying for their very different apartments.

dragonwriter 8y ago

> Pay is a reflection of market demand, not the monetary value you bring to a company Market demand is itself based on the perception of the hiring parties of the value you would supply. Companies hire people [0] only when they expect that that the cost of doing so will be justified by the return. But, yes, I agree that supply and demand set price, but I just disagree with the idea that those are somehow unrelated to value. > Walmart wouldn't function without someone at the register, but how much "value" that person at the register brings doesn't dictate their salary. The value sets an upper limit to what WalMart will pay, just as the perceived opportunity cost to the worker of taking the job sets the lower limit of pay they’ll accept. The former is demand, the latter supply. [0] outside of hires where a decision maker is funnelling business resources to the hired party as a kind of personal gift, which do happen, sure.

pathseeker 8y ago
Value only sets a maximum. It's meaningless when you are talking about giving paycuts to people you know are in cheaper locations.
- dragonwriter 8y ago
  > Value only sets a maximum. That sounds very much like what said about setting an upper limit, yes. > It's meaningless when you are talking about giving paycuts to people you know are in cheaper locations. Sure, each side is actually seeking the other sides limit price: as an employee, you demand what you think you are worth to the employer; as an employer, you offer what you think the employee is willing to work for (both sides, of course, present this as reflecting their own side rather than their guess of what the other side will accept.) This gets weird when an employer continues to try to do this but tries to have salary transparency, because then they either have to abandon elements that go into their estimate of what employees will accept or make it clear that that' they are targeting an estimate of the employees lower limit.
- evrydayhustling 8y ago
  What lets you pay them less is not their lower costs, it's the unavailability of higher pay in their area. So if you're going to do it, size it that way and, ideally, call it what it is.