3 ms·

"If you see that everyone with money on the line is doing something different from what you propose," But that's precisely what I don't see. There are lots of

by fsloth 7y ago

"If you see that everyone with money on the line is doing something different from what you propose," But that's precisely what I don't see. There are lots of examples of small high performing teams with way above 'market rate' salaries. I know several in my smallish home town (Helsinki area, 1.5M population). Some of these are in consulting, others in gaming. Sure, they are all in programming, but still their compensations are way higher than the local market would dictate for the "positions". For non-programming examples, there are manufacturing companies who pay an excellent rate for their employees if you compare with the global market (... china ...) but their quality and output is so good it makes total financial sense due to smart automation. You can't pay your employees more than you earn, and you need to get a certain interest on the invested capital. But other than that... I don't really understand why there would be any hard constraints on how much you can pay your employees if the numbers add up.

wyager 7y ago
Once again, you've inverted the causal relationship. The people who get paid more tend to be able to command higher fees because their economic output is higher. You can't take a random person, pay them 10% more, and expect to get 10+% more productivity out of them, ceteris paribus. It's not about "hard constraints"; it's about economic optimization, which involves getting the highest possible return on your capital. If paying everyone $70k were a reliable way to do that, everyone would be doing it.
- jschwartzi 7y ago
  You’re ignoring how teams actually work in this analysis. You’re not giving one guy a raise, you’re giving everyone a raise. And they all know it. So your call center workers can quit their second jobs, and get to solutions much faster because they can think more clearly. Your admin people now want to do professional level work out of appreciation. Your sales team has enough money to live that they can focus on big clients rather than taking a bunch of tent accounts to get commissions every month. So the entire company starts to perform better, and because everyone is in a better mood they work together more too. This is all missed by a strictly Taylorist analysis treating each employee individually and assuming their output are independent. Humans are social and they need to sleep to operate well. Paying them more makes them more social and lets them rest more instead of working for someone else. By paying a living wage you’re effectively buying the highest productivity you can get from your team which happens to be a lot.
- fsloth 7y ago
  "If paying everyone $70k were a reliable way to do that, everyone would be doing it." Um, would they? That, indeed is the interesting question as capital has accumulated, worker wealth growth has stopped and notoriously - productivity really does not grow as it should when we have all these nifty new IT tools to expedite various boring things. I could be as bold and say that there is a hint of extractive economical thinking in keeping some people in low pay grades. Generally, what you see in extractive economies historically is that the overall wealth is lower than would be if the system was more inclusive, but on the same time there is a bunch of people who are doing the extracting and are satisfied that their coffers are full and are not really concerned about systems level effects. I understand the logical thinking here - a person suddenly does not become a genious if you pay him more. But if more pay gives him more mental resources during the day as he does not need to be stressed and worried about basic substinence level things - you are actually increasing his performance by paying him more.

by fsloth 7y ago

wyager 7y ago

Once again, you've inverted the causal relationship. The people who get paid more tend to be able to command higher fees because their economic output is higher. You can't take a random person, pay them 10% more, and expect to get 10+% more productivity out of them, ceteris paribus. It's not about "hard constraints"; it's about economic optimization, which involves getting the highest possible return on your capital. If paying everyone $70k were a reliable way to do that, everyone would be doing it.

jschwartzi 7y ago
You’re ignoring how teams actually work in this analysis. You’re not giving one guy a raise, you’re giving everyone a raise. And they all know it. So your call center workers can quit their second jobs, and get to solutions much faster because they can think more clearly. Your admin people now want to do professional level work out of appreciation. Your sales team has enough money to live that they can focus on big clients rather than taking a bunch of tent accounts to get commissions every month. So the entire company starts to perform better, and because everyone is in a better mood they work together more too. This is all missed by a strictly Taylorist analysis treating each employee individually and assuming their output are independent. Humans are social and they need to sleep to operate well. Paying them more makes them more social and lets them rest more instead of working for someone else. By paying a living wage you’re effectively buying the highest productivity you can get from your team which happens to be a lot.
fsloth 7y ago
"If paying everyone $70k were a reliable way to do that, everyone would be doing it." Um, would they? That, indeed is the interesting question as capital has accumulated, worker wealth growth has stopped and notoriously - productivity really does not grow as it should when we have all these nifty new IT tools to expedite various boring things. I could be as bold and say that there is a hint of extractive economical thinking in keeping some people in low pay grades. Generally, what you see in extractive economies historically is that the overall wealth is lower than would be if the system was more inclusive, but on the same time there is a bunch of people who are doing the extracting and are satisfied that their coffers are full and are not really concerned about systems level effects. I understand the logical thinking here - a person suddenly does not become a genious if you pay him more. But if more pay gives him more mental resources during the day as he does not need to be stressed and worried about basic substinence level things - you are actually increasing his performance by paying him more.