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In the same way as offering products below costs would be to drive out competition and become a monopolist. I'm not sure I think this is bad but I believe this

In the same way as offering products below costs would be to drive out competition and become a monopolist. I'm not sure I think this is bad but I believe this is the argument.

JoshTriplett 6y ago
Equating the two creates a perception that employees shouldn't be paid as much as they're worth. An employee being paid $500k/year is probably producing even more value to their employer than that, and if anything, the goal should be to close the gap between value and compensation, not widen it.
- Cederfjard 6y ago
  I think the point is that very wealthy companies can temporarily pay employees more than the value they provide, and willingly eat that cost until the competition has been stifled, at which point they can lower compensation again.
  - jefftk 6y ago
    On the other hand, offering extremely high salaries makes a lot of people consider becoming programmers who wouldn't otherwise think of it. You can't buy your way out of having your competitors having access to skilled labor, outside of perhaps the very short-term.
    - saalweachter 6y ago
      Yeah, this is the housing problem all over again. If the price to buy (well, rent) an engineer is too high, build more engineers.
- thesuitonym 6y ago
  >is probably producing even more value to their employer than that That's the crux of the argument, though. Google can afford to take a loss on the employee's salary for years, just to keep them from a competitor. We're not talking about Google arbitrarily paying a developer more than their competitors, we're talking about Google diverting funds from other business units to cover costs.
  - deleted 6y ago
    [deleted]
wry_discontent 6y ago
In the same way, isn't that just the way markets work?
- Bootvis 6y ago
  IANAL but I believe lowering prices to kill competition is illegal in the western world and in the US in particular. Googled: https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost https://www.ftc.gov/tips-advice/competition-guidance/guide-a... It’s called predatory pricing in that case and legality is unclear. It seems you probably get away with it in the US.
danudey 6y ago
It's the "invisible hand of the market" vs. the "invisible hand of rich monopolists". I think one is (conceptually) good, while the other is (provably) bad.

In the same way as offering products below costs would be to drive out competition and become a monopolist. I'm not sure I think this is bad but I believe this is the argument.

JoshTriplett 6y ago

Equating the two creates a perception that employees shouldn't be paid as much as they're worth. An employee being paid $500k/year is probably producing even more value to their employer than that, and if anything, the goal should be to close the gap between value and compensation, not widen it.

Cederfjard 6y ago
I think the point is that very wealthy companies can temporarily pay employees more than the value they provide, and willingly eat that cost until the competition has been stifled, at which point they can lower compensation again.
- jefftk 6y ago
  On the other hand, offering extremely high salaries makes a lot of people consider becoming programmers who wouldn't otherwise think of it. You can't buy your way out of having your competitors having access to skilled labor, outside of perhaps the very short-term.
  - saalweachter 6y ago
    Yeah, this is the housing problem all over again. If the price to buy (well, rent) an engineer is too high, build more engineers.
thesuitonym 6y ago
>is probably producing even more value to their employer than that That's the crux of the argument, though. Google can afford to take a loss on the employee's salary for years, just to keep them from a competitor. We're not talking about Google arbitrarily paying a developer more than their competitors, we're talking about Google diverting funds from other business units to cover costs.
- deleted 6y ago
  [deleted]

wry_discontent 6y ago

In the same way, isn't that just the way markets work?

Bootvis 6y ago
IANAL but I believe lowering prices to kill competition is illegal in the western world and in the US in particular. Googled: https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/single-firm-conduct/predatory-or-below-cost https://www.ftc.gov/tips-advice/competition-guidance/guide-a... It’s called predatory pricing in that case and legality is unclear. It seems you probably get away with it in the US.

danudey 6y ago

It's the "invisible hand of the market" vs. the "invisible hand of rich monopolists". I think one is (conceptually) good, while the other is (provably) bad.