5 ms·

This is all very self-indulgent. People don't get paid what they're worth, they get paid the smallest amount someone can get them to accept.

rcoveson 7y ago
Just what do you think the word “worth” means?
- iso1210 7y ago
  The amount of value they add Company X needs to employ two people in a role. The person they employ will add $100 an hour of value to the company. Person A has lots of money in the bank from a large inheritence and doesn't need the job to live Person B has desparately needs a job to pat the mortgage Company X offers both $40 an hour Person B takes the offer, as the alternative is reposession Person A says 'no' Company X still wants that extra $100 an hour of value, so offer person B $50 an hour, then $60. Person B then accepts at $60. Both person A and person B are worth $100, neither get paid what they are worth, but person A is paid 50% more than person B.
  - rcoveson 7y ago
    So if a crippled person needs somebody to go to the bank and withdraw $1,000 for them, and they figure they can hire somebody trustworthy for $50 to do the errand, is that person not being paid what they’re worth, because they added $1,000 dollars of value? If person A in your narrative was capable of creating $100 dollars of value all by themselves, they would do that instead. But they can’t. The $100 opportunity exists because of the company. The company needs a shovel strong enough to dig up the $100. If one person will sell such a shovel for $40, and that’s the best price available, they’ll take it. That was the market value of shovels. It would be wrong to say the shovel was worth $100. Even if all the shovel sellers in the area knew about the details of this opportunity and decided to set they’re prices at $99, it would quickly become apparent that shovels aren’t really worth that. Two things would happen: sellers would defect and set they’re prices lower than $99 to secure the deal; this would happen as long and there was still and profit to be made. And the company would remember what a shovel was supposed to cost, get suspicious, and look in to manufacturing a shovel of they’re own, or commissioning a rake shop to make one. This game of price setting is pretty good at approximating worth, especially compared to your proposed strategy of measuring the delta between company profits in reality, and in an alternate reality where the employee didn’t exist and the company didn’t attempt to fill their position with anybody or anything. The latter is not worth talking about.
    - EliRivers 7y ago
      So if a crippled person needs somebody to go to the bank and withdraw $1,000 for them, and they figure they can hire somebody trustworthy for $50 to do the errand, is that person not being paid what they’re worth, because they added $1,000 dollars of value? This is a terrible example. Moving something is not the same as creating that something. Moving $1000 could be worth nothing. It could have negative value. It could be worth millions.
      - rcoveson 7y ago
        Right, and there are many things in between. Maintaining an object, improving an object, combining objects to make complex object, etc. If you’re in the business of creating useful objects out of basically nothing, you don’t even need a company. Maybe you hire somebody to sell your objects for commission, or maybe you sell them yourself. If you’re looking for a closer analogy, try the shove analogy. Why is it that despite the fact that the shovel makers are creating an object, even out of nothing, that they aren’t worth what is dug up with them? Software engineers are a lot like the shovel makers. Sometimes the shovels we make are used in extraordinarily profitable ventures. But their value is still determined by how hard it was to make them, and to learn the skills to make them. Not what the company uses them for. I think it becomes hard to see when all the shovels being made are bespoke. Lots of software is written to fill one role for one client. That client will often use that particular thing to make lots of money. So maybe it appears like that thing bit of software created all the value? But this is clearly false. The fact that some part of a system is essential to the whole system’s success does not imply that the worth of every piece of the system is equivalent to the worth of the whole system.
        justanotherc 7y ago
        This is a good way of putting it. All these "run your own agency" self-help courses have been pushing "value based" pricing with the promise that you can slap together a Wordpress template and charge $40k for it because of the "value" a website brings to the company is mostly nonsense IME. Stuff is built by the lowest competent bidder, period.
deleted 7y ago
[deleted]

rcoveson 7y ago

Just what do you think the word “worth” means?

iso1210 7y ago
The amount of value they add Company X needs to employ two people in a role. The person they employ will add $100 an hour of value to the company. Person A has lots of money in the bank from a large inheritence and doesn't need the job to live Person B has desparately needs a job to pat the mortgage Company X offers both $40 an hour Person B takes the offer, as the alternative is reposession Person A says 'no' Company X still wants that extra $100 an hour of value, so offer person B $50 an hour, then $60. Person B then accepts at $60. Both person A and person B are worth $100, neither get paid what they are worth, but person A is paid 50% more than person B.
- rcoveson 7y ago
  So if a crippled person needs somebody to go to the bank and withdraw $1,000 for them, and they figure they can hire somebody trustworthy for $50 to do the errand, is that person not being paid what they’re worth, because they added $1,000 dollars of value? If person A in your narrative was capable of creating $100 dollars of value all by themselves, they would do that instead. But they can’t. The $100 opportunity exists because of the company. The company needs a shovel strong enough to dig up the $100. If one person will sell such a shovel for $40, and that’s the best price available, they’ll take it. That was the market value of shovels. It would be wrong to say the shovel was worth $100. Even if all the shovel sellers in the area knew about the details of this opportunity and decided to set they’re prices at $99, it would quickly become apparent that shovels aren’t really worth that. Two things would happen: sellers would defect and set they’re prices lower than $99 to secure the deal; this would happen as long and there was still and profit to be made. And the company would remember what a shovel was supposed to cost, get suspicious, and look in to manufacturing a shovel of they’re own, or commissioning a rake shop to make one. This game of price setting is pretty good at approximating worth, especially compared to your proposed strategy of measuring the delta between company profits in reality, and in an alternate reality where the employee didn’t exist and the company didn’t attempt to fill their position with anybody or anything. The latter is not worth talking about.
  - EliRivers 7y ago
    So if a crippled person needs somebody to go to the bank and withdraw $1,000 for them, and they figure they can hire somebody trustworthy for $50 to do the errand, is that person not being paid what they’re worth, because they added $1,000 dollars of value? This is a terrible example. Moving something is not the same as creating that something. Moving $1000 could be worth nothing. It could have negative value. It could be worth millions.
    - rcoveson 7y ago
      Right, and there are many things in between. Maintaining an object, improving an object, combining objects to make complex object, etc. If you’re in the business of creating useful objects out of basically nothing, you don’t even need a company. Maybe you hire somebody to sell your objects for commission, or maybe you sell them yourself. If you’re looking for a closer analogy, try the shove analogy. Why is it that despite the fact that the shovel makers are creating an object, even out of nothing, that they aren’t worth what is dug up with them? Software engineers are a lot like the shovel makers. Sometimes the shovels we make are used in extraordinarily profitable ventures. But their value is still determined by how hard it was to make them, and to learn the skills to make them. Not what the company uses them for. I think it becomes hard to see when all the shovels being made are bespoke. Lots of software is written to fill one role for one client. That client will often use that particular thing to make lots of money. So maybe it appears like that thing bit of software created all the value? But this is clearly false. The fact that some part of a system is essential to the whole system’s success does not imply that the worth of every piece of the system is equivalent to the worth of the whole system.
      - justanotherc 7y ago
        This is a good way of putting it. All these "run your own agency" self-help courses have been pushing "value based" pricing with the promise that you can slap together a Wordpress template and charge $40k for it because of the "value" a website brings to the company is mostly nonsense IME. Stuff is built by the lowest competent bidder, period.

deleted 7y ago

[deleted]