4 ms·

I think this conveniently ignores the risk factor your risk of not getting payed your wage is a tiny fraction of the risk of someone loosing the invested money.

by qaq 8y ago

I think this conveniently ignores the risk factor your risk of not getting payed your wage is a tiny fraction of the risk of someone loosing the invested money. You want to participate on the win side of that risk without sharing the losses.

Dowwie 8y ago
You raise a good point about risk profiles. Let's consider other asymmetric risks? An employee is hired at will and largely vulnerable to employment risk. The employee has no legal claim to income earned by an employer beyond general compensation provided in the duration of employment. On the other hand, an investor, without major financial restructuring, can through equity or debt secure a claim with various degrees of seniority. So, to counter your claim, an employee is exposed to downside through these terms.
- imgabe 8y ago
  > An employee is hired at will and largely vulnerable to employment risk. The employee is almost always paid for work they have already done, except in extreme circumstances. There are substantial legal protections in place to assure this. There are entire divisions of Federal and State governments in place to ensure that employees get their wages for work they have already done. The risk you're talking about is that they may not continue getting paid the future. They haven't done that work yet, that work may not even exist and need to be done yet, so of course there's no guarantee that they'll get paid for it. In order to make it analogous to the risk an investor takes, the employee's deal would have to be something like "come in and work for 40 hours a week, if it turns out your work created a profit, you'll get a cut of that profit in a few months or years"
  - chii 8y ago
    > governments in place to ensure employees get their wages for work they have already done. does payment to employees override payment to creditors/investors when a company goes belly up? I get the feeling that employees are secondary compared to the primary creditors.
    - qaq 8y ago
      the coupon on bonds is not capital gains so as far as this discussion goes taxes and wages are first. Also generally you have the whole investment at risk vs a few weeks of wages.

by qaq 8y ago

Dowwie 8y ago

You raise a good point about risk profiles. Let's consider other asymmetric risks? An employee is hired at will and largely vulnerable to employment risk. The employee has no legal claim to income earned by an employer beyond general compensation provided in the duration of employment. On the other hand, an investor, without major financial restructuring, can through equity or debt secure a claim with various degrees of seniority. So, to counter your claim, an employee is exposed to downside through these terms.

imgabe 8y ago
> An employee is hired at will and largely vulnerable to employment risk. The employee is almost always paid for work they have already done, except in extreme circumstances. There are substantial legal protections in place to assure this. There are entire divisions of Federal and State governments in place to ensure that employees get their wages for work they have already done. The risk you're talking about is that they may not continue getting paid the future. They haven't done that work yet, that work may not even exist and need to be done yet, so of course there's no guarantee that they'll get paid for it. In order to make it analogous to the risk an investor takes, the employee's deal would have to be something like "come in and work for 40 hours a week, if it turns out your work created a profit, you'll get a cut of that profit in a few months or years"
- chii 8y ago
  > governments in place to ensure employees get their wages for work they have already done. does payment to employees override payment to creditors/investors when a company goes belly up? I get the feeling that employees are secondary compared to the primary creditors.
  - qaq 8y ago
    the coupon on bonds is not capital gains so as far as this discussion goes taxes and wages are first. Also generally you have the whole investment at risk vs a few weeks of wages.