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Executives Play Down the Possibility of Raises
- scrumption 8y agoAh, so you're telling me CEOs aren't individually greedy parasites, but that the entire system is to be blamed? Thanks for the advice, comrade Bloomberg!
- ceejayoz 8y agoI'm curious as to whether that "median wage growth" chart takes inflation into account.
- deathanatos 8y agoThe data appears to come from here[1], which describes it as, > Once we have constructed the individual hourly earnings data, we match the hourly earnings of individuals observed in both the current month and 12 months earlier. The matching algorithm results in an average of 2,400 individual wage growth observations per month. We then compute the median of the distribution of individual 12-month wage changes for each month. That seems to indicate that it does not take inflation into account. [1]: https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx?panel=1 https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx?pan...
- sharkweek 8y agoMy favorite scam I've seen lately has been the "We're gonna give you a promotion with no salary increase, see how you do, and then discuss a pay raise after X months! You should be grateful for this opportunity!" And then of course in six months, the pay raise is basically a small bump, versus what one might be paid if brought in as a manager/higher title.
- draw_down 8y agoThis is why people say you make your money going out the door.
- toyg 8y agoYou are supposed to take the promotion, update your linkedin, and find a real position with that title elsewhere for more money.
- ManFromUranus 8y agoThis is the right answer, they are simply making you more marketable, and you are now gaining "New Position" XP
- maxxxxx 8y agoI have heard that before. Immediately after a promotion it's best to use the new title in a job search. Pretty sad.
- hkmurakami 8y agoThis is basically what every McKinsey Engagement Magager does after 1 year on the job, and the firm is happy with it.
- ucaetano 8y agoThe difference is that McKinsey (and other consulting firms) rely on the network of alumni to secure new projects. So those people aren't (usually) leaving to a competitor, but mostly to a current (or possibly future) client. Same with law firms, auditing firms, etc.
- maxxxxx 8y agoThat's really good strategy. Is there another industry where you could apply this method? Hire young people for cheap and then let them move to future customers for high salaries. I guess it may work for somebody like Oracle: Hire young devs and after a few years let move to customers who pay them well as experts who then buy Oracle products.
- ucaetano 8y ago
- vonmoltke 8y agoOne nice thing about working at a place that doesn't have levels is that this crap doesn't happen.
- deleted 8y ago[deleted]
- jmull 8y agoNot a great scam because you give the employee both the means and motive to leave for a better paying job down the street. Then you'll either have to repeat this draining process or pay a reasonable salary after all, only now you'll have a less experienced person in place for a while.
- GFischer 8y agoI have been on the opposite side.. they'll give me pay raises, expanded responsibility but never a promotion. So if you do a LinkedIn search you'll think I'm a run of the mill programmer and they'll contact me for positions paying 1/3 or 1/4th of my current salary.
- maxxxxx 8y agoI like the concept of "cheap talk". In my company they always celebrate sales growth and higher profits loudly. It really seems to motivate a lot of people while at the same time salaries are frozen so most of them get no benefit from the "good news".
- JustSomeNobody 8y agoMy favorite is when this happens in the same meeting. "Best year evar!1!" Can we finally get a raise? "Oooooohhh, sorry."
- Rotdhizon 8y agoFor a typical working man job, this is the unfortunate reality of the job market For tech jobs, this is why people jump ship every few years.
- LoSboccacc 8y agoit's also why they try to instill&enforce the 'job hopper' stigma
- Eridrus 8y agoIs it really a stigma when it is perfectly rational to prefer employees who will stick around for a while?
- JustSomeNobody 8y agoAs an employee, I'd rather stick around. I greatly dislike the hazing rituals that tech hiring has become. Also, if I generally enjoy the problems I'm given to solve, I want to keep solving them. However, my view is that companies only care about money, so I should too. If I don't get good, consistent raises, I have to leave and take my experience with me.
- cryoshon 8y agothe point is that it's a stigma because they have made it into one because it benefits them. to the employee, it's an artificial social barrier to getting their economic worth by hopping jobs.
- deleted 8y ago[deleted]
- bcoates 8y agoThe idea that pay raises come from some sort of collective negotiation with a bunch of executives is just bizarre on its own. Executives do not get to decide the pay level of employees. The point of the tax law was to lower the cost of employment and investment in the US (specifically, the cost of repatriating foreign profits to pay US salaries and buy US-based infrastructure). The hope being that lower costs cause companies to value US labor more, which tightens the labor market. A tight labor market causes the raises: companies will continue to offer what they want to offer, and they will be unable to replace attrition because the would-be new hire can do better. The employer is either forced to offer more wages directly, lower their standards to poach employees from lower-paying employers, or do without and leave profit on the table. But none of that involves buttering up CEOs and getting them to pinky-swear that they're going to give out raises just because they can. The wage level is always "as low as they can get away with"
- ChrisLTD 8y ago"The point of the tax law was to lower the cost of employment and investment in the US. [...] The hope being that lower costs cause companies to value US labor more, which tightens the labor market." The point of the tax cut was to get more money in the hands of owners of corporations. And, so far, it's working quite well. We won't see much wage growth for one big reason, the Fed has and will continue to raise interest rates at the slightest sign of inflation.
- darawk 8y agoActually the point of the tax cut was to harmonize our corporate tax rates with the rest of the world, and take steps to eliminate the domicile arbitrage and general loopholing that creates an enormous amount of deadweight loss in our economy.
- s73v3r_ 8y agoNo, it wasn't. Corporate tax rates were fine, and absolutely nothing in the bill put an end to any of the other stuff.
- hitekker 8y ago> In fact, one basic result in the theory of cheap talk is that if you assume the cheap-talker will do what’s best for him and worst for you, you can often get him to reveal more of the truth. This is basically the definition of enemy. These people are your enemies. By that I mean, in the context of fair wages, employees ought to treat executives as enemies, not as slightly conflicted parties with slightly divergent interests. To win the pay he or she deserves, the employee must have both resolve ("I don't want this person to beat me") and clarity ("this person would gladly pay me half of what I make"). Mind and heart must be ready to fight, thus the word "enemy". A dangerous label but sometimes, a courageous one. Pretending that these people care about your best interests, that they'd be willing to sacrifice a little because they're so forward-thinking, smacks of conflict-avoidance. I.e., "Oh my boss's boss is just trying to minimize and maximize like any rational actor. It's normal. Happens to everyone. I'm scared!"
- Eridrus 8y agoThis is very reductive. You could use the same logic to argue that your coworkers are your enemies because the money being paid to them could be paid to you instead.
- hitekker 8y agoIf a person had a coworker who thought "well I could get a 40% pay increase if I get <person> fired", then that person should consider that coworker an enemy. Fortunately, the world does not revolve around game-theory and most other parties with whom we choose to associate, will at least consider and value our interests. Enemies do not do so, or value our interests at something close to zero; thus their calculus: "worst for you, best for them".
- ucaetano 8y agoIf you would get a 40% raise if you switched companies, would you? Should execs see you as the enemy, then? There are no "sides", everyone is just maximizing their own payouts. People here don't seem to mind when profit-focused engineers switch companies for better salaries, but seem to mind when companies do the same.
- denzil_correa 8y agoIn the end, it is back to the fundamental question : How should the business benefits created by the workforce be distributed?
- s73v3r_ 8y agoI mean, why on earth would they give raises? It's not like we just passed a huge tax cut bill with enormous cuts to corporate taxes with the justification that the money would go back to workers... Oh wait.
- bertjk 8y agoGiven that this was an event organized by the Dallas and Atlanta Federal Reserve Banks, we should consider the possibility that the CEOs were simply trying to encourage the Fed to keep interest rates low. Here is most likely the event being referenced: https://www.dallasfed.org/research/events/2018/18ted https://www.dallasfed.org/research/events/2018/18ted