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This seems to describe disparity in tech worker wages across different cities. The value provided by an engineer in SFO is almost definitely not 2x what an engi

This seems to describe disparity in tech worker wages across different cities. The value provided by an engineer in SFO is almost definitely not 2x what an engineer in SLC provides. However, the wages are way higher b/c cost of living in higher. Companies don't pay your equal to the value you provide, they pay you as little as possible.

spacephysics 6y ago
If they paid you the value you provide, they would go out of business.
- mschuster91 6y ago
  Worker cooperatives exist. They just don't pay out value to shareholders who do nothing.
  - pasabagi 6y ago
    The problem is, shareholders can do something cooperatives cannot - they can operate at a substantial loss, effectively indefinitely, with the knowledge that they can get their profit by selling the share. Amazon, for instance, ran at a net loss for much of its history. I don't know how a workers cooperative would manage this. Secondly, in capitalism, capital is concentrated among a small number of people, who are often friends. Shareholders therefore often help with raising further capital, since they are always from the capitalist class. So a worker's cooperative won't be as good at raising funds.
    - jacobr1 6y ago
      Not the full answer, but loans. Trading equity isn't the only way to get a pile of cash. It isn't even the most common way.
      - nunez 6y ago
        Business and (especially) consumer lenders are, by and large, much more risk-averse than investors, almost by definition. They would absolutely not be okay with near-indefinite loss; they would never regain their principal!
- afthonos 6y ago
  I don’t buy that. That would imply the company as a whole provides no value except that brought by the employees.
  - spacephysics 6y ago
    Try running a company with no employees
kazen44 6y ago
> Companies don't pay your equal to the value you provide, they pay you as little as possible. this should be rather obvious, extraction of wealth through employment are one of the basics concepts in capitalism.
routerl 6y ago
The value provided by _the labour_ of an engineer in SFO is almost definitely not 2x what an engineer in SLC provides. There's value in a company having 200 engineers in SFO compared to 200 engineers in SLC, largely marketing related. To engineers, of course, this all has a naked emperor vibe, but on the business side our industry is largely about fake it till you make it. And being able to afford engineering offices and staff in SFO signals "we've made it", independently of whether that's true.
chadash 6y ago
> However, the wages are way higher b/c cost of living is higher. I think it's a little more subtle than this. The wages are higher because there's more opportunity for employees, who are being poached constantly, and often by companies with essentially limitless budgets. If you hope to retain engineers, you need to pony up in SFO, but less so in Omaha, where there are fewer people competing for talent. Companies say they pay for cost of living, but in reality, there are plenty of expensive cities where salaries are relatively low (e.g. much of Europe) and cheap cities where salaries are relatively high (e.g. Houston, though not necessarily for engineers).
klaudius 6y ago
Price of something in a competitive environment is equal to cost of it's production. What is the cost of production of services? It's the cost of living of a person performing those services. Price has nothing to do with a vague concept of 'value'.
dfxm12 6y ago
Companies don't pay your equal to the value you provide, they pay you as little as possible. American middle and low wage workers have seen their wages stagnate or decrease, despite being more productive than ever: https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/
ac29 6y ago
Only in part though, many tech workers are getting paid in the top 10% of wages in a given area, not "toward the minimum wage necessary to sustain the life of the worker". I think highly specialized/niche workers are a clear exception to this "law".

spacephysics 6y ago

If they paid you the value you provide, they would go out of business.

mschuster91 6y ago
Worker cooperatives exist. They just don't pay out value to shareholders who do nothing.
- pasabagi 6y ago
  The problem is, shareholders can do something cooperatives cannot - they can operate at a substantial loss, effectively indefinitely, with the knowledge that they can get their profit by selling the share. Amazon, for instance, ran at a net loss for much of its history. I don't know how a workers cooperative would manage this. Secondly, in capitalism, capital is concentrated among a small number of people, who are often friends. Shareholders therefore often help with raising further capital, since they are always from the capitalist class. So a worker's cooperative won't be as good at raising funds.
  - jacobr1 6y ago
    Not the full answer, but loans. Trading equity isn't the only way to get a pile of cash. It isn't even the most common way.
    - nunez 6y ago
      Business and (especially) consumer lenders are, by and large, much more risk-averse than investors, almost by definition. They would absolutely not be okay with near-indefinite loss; they would never regain their principal!
afthonos 6y ago
I don’t buy that. That would imply the company as a whole provides no value except that brought by the employees.
- spacephysics 6y ago
  Try running a company with no employees

kazen44 6y ago

> Companies don't pay your equal to the value you provide, they pay you as little as possible. this should be rather obvious, extraction of wealth through employment are one of the basics concepts in capitalism.

routerl 6y ago

The value provided by _the labour_ of an engineer in SFO is almost definitely not 2x what an engineer in SLC provides. There's value in a company having 200 engineers in SFO compared to 200 engineers in SLC, largely marketing related. To engineers, of course, this all has a naked emperor vibe, but on the business side our industry is largely about fake it till you make it. And being able to afford engineering offices and staff in SFO signals "we've made it", independently of whether that's true.

chadash 6y ago

> However, the wages are way higher b/c cost of living is higher. I think it's a little more subtle than this. The wages are higher because there's more opportunity for employees, who are being poached constantly, and often by companies with essentially limitless budgets. If you hope to retain engineers, you need to pony up in SFO, but less so in Omaha, where there are fewer people competing for talent. Companies say they pay for cost of living, but in reality, there are plenty of expensive cities where salaries are relatively low (e.g. much of Europe) and cheap cities where salaries are relatively high (e.g. Houston, though not necessarily for engineers).

klaudius 6y ago

Price of something in a competitive environment is equal to cost of it's production. What is the cost of production of services? It's the cost of living of a person performing those services. Price has nothing to do with a vague concept of 'value'.

dfxm12 6y ago

Companies don't pay your equal to the value you provide, they pay you as little as possible. American middle and low wage workers have seen their wages stagnate or decrease, despite being more productive than ever: https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/

ac29 6y ago

Only in part though, many tech workers are getting paid in the top 10% of wages in a given area, not "toward the minimum wage necessary to sustain the life of the worker". I think highly specialized/niche workers are a clear exception to this "law".