4 ms·

That number is the ceiling. The floor is what someone else with the skills to make those particular changes will accept as a wage. Do you think a toll booth ope

by roel_v 7y ago

That number is the ceiling. The floor is what someone else with the skills to make those particular changes will accept as a wage. Do you think a toll booth operator can say 'I do 10k in revenue a day, pay me half of that and we'll call it good'? Please.

WalterBright 7y ago
> Do you think a toll booth operator can say 'I do 10k in revenue a day, pay me half of that and we'll call it good'? Of course not, because it isn't his skills making that happen.
- roel_v 7y ago
  There are lots of software jobs where the 'skills' are equally interchangeable. Most programmers aren't in a position to negotiate a rate based on the scarcity of their skills; they have to negotiate based on the market rate, which is set by supply and demand under fungibility od the good (or service, in this case). That is not to say that those services are 100% fungible, but a lot closer to 100 than to 0.
  - WalterBright 7y ago
    > There are lots of software jobs where the 'skills' are equally interchangeable. The added value of a software engineer is much higher than the value added by a clerk. That's why software engineers get paid much more. Supply and demand will force a company to pay more for a person that creates $100 in value than a person that creates $10 in value.
    - roel_v 7y ago
      Of course, but that's not what the original claim was. The original claim was that software engineers, on average, can demand a wage proportional to the value they create. Which is simply not true. They can command a higher wage because they generate more profit, but how much more they will be paid is not that value (or a function of it - and, again, speaking for the average developer, not highly niche specialists), it's set by supply and demand. If the claim from the beginning had been 'career advice: specialize your tech skills to the point where you can present such a unique proposition that you can command a share of your value add as salary, and also make sure that that specialization is something that brings a high value add', then of course I would have agreed. But saying that the average joe schmoe web developer is in a position to negotiate based on their value add is simply not true. I mean, don't take my word for it - just look at what the salaries for run of the mill software engineers are. (someone is going to bring up big five salaries and claim SE's are paid 1/2 mill - yeah no, those are not 'average')
      - WalterBright 7y ago
        > The original claim was that software engineers, on average, can demand a wage proportional to the value they create. Which is simply not true. It is true from a simple gedanken experiment. Suppose I pay you $10 and you produce $100 in value. My competitor notices this and offers you $20 and entices you away, making $80 on $20 invested. His competitor notices, and offers you $30 to make $70. Rinse, repeat. Your pay will stabilize at $100 minus the opportunity cost of the money, which around 15%. This scenario relies on the players all being greedy and completely self-interested. The scenario of someone hiring you for $10 and you producing $100 is highly unstable and unlikely to last very long.
        roel_v 7y ago
        That is again another argument than the original one under discussion. Of course prices converge to an equilibrium in a perfectly efficient market. But wages are sticky, and labor is a lemon market the the employer's pov. Amd those are just two reasons for why people cannot walk into a comp negotiation and negotiate based on value produced. (not to mention that no prospective employee would ever even know that value, but I've left that out of the discussion all along)

by roel_v 7y ago

WalterBright 7y ago

> Do you think a toll booth operator can say 'I do 10k in revenue a day, pay me half of that and we'll call it good'? Of course not, because it isn't his skills making that happen.

roel_v 7y ago
There are lots of software jobs where the 'skills' are equally interchangeable. Most programmers aren't in a position to negotiate a rate based on the scarcity of their skills; they have to negotiate based on the market rate, which is set by supply and demand under fungibility od the good (or service, in this case). That is not to say that those services are 100% fungible, but a lot closer to 100 than to 0.
- WalterBright 7y ago
  > There are lots of software jobs where the 'skills' are equally interchangeable. The added value of a software engineer is much higher than the value added by a clerk. That's why software engineers get paid much more. Supply and demand will force a company to pay more for a person that creates $100 in value than a person that creates $10 in value.
  - roel_v 7y ago
    Of course, but that's not what the original claim was. The original claim was that software engineers, on average, can demand a wage proportional to the value they create. Which is simply not true. They can command a higher wage because they generate more profit, but how much more they will be paid is not that value (or a function of it - and, again, speaking for the average developer, not highly niche specialists), it's set by supply and demand. If the claim from the beginning had been 'career advice: specialize your tech skills to the point where you can present such a unique proposition that you can command a share of your value add as salary, and also make sure that that specialization is something that brings a high value add', then of course I would have agreed. But saying that the average joe schmoe web developer is in a position to negotiate based on their value add is simply not true. I mean, don't take my word for it - just look at what the salaries for run of the mill software engineers are. (someone is going to bring up big five salaries and claim SE's are paid 1/2 mill - yeah no, those are not 'average')
    - WalterBright 7y ago
      > The original claim was that software engineers, on average, can demand a wage proportional to the value they create. Which is simply not true. It is true from a simple gedanken experiment. Suppose I pay you $10 and you produce $100 in value. My competitor notices this and offers you $20 and entices you away, making $80 on $20 invested. His competitor notices, and offers you $30 to make $70. Rinse, repeat. Your pay will stabilize at $100 minus the opportunity cost of the money, which around 15%. This scenario relies on the players all being greedy and completely self-interested. The scenario of someone hiring you for $10 and you producing $100 is highly unstable and unlikely to last very long.
      - roel_v 7y ago
        That is again another argument than the original one under discussion. Of course prices converge to an equilibrium in a perfectly efficient market. But wages are sticky, and labor is a lemon market the the employer's pov. Amd those are just two reasons for why people cannot walk into a comp negotiation and negotiate based on value produced. (not to mention that no prospective employee would ever even know that value, but I've left that out of the discussion all along)