11 ms·

Good work is still highly valued, it's just that the value is not paid to the worker, but to the company owning the work. If you increase a company's profit by

• lordnacho 6y ago
  This is not far from the true numbers. I've known several management consultants - the young, educated hustlers who are on their first job - who discovered from their clients what the bill actually was. Ratios of 6+ are common.
  • JAlexoid 6y ago
    I worked with enough consultants to now that the good ones subsidize the salary of the bad ones.
• AlexTWithBeard 6y ago
  > the company will pocket the remaining $460k First, in most companies it's very hard to say who exactly managed to increase the profit. Is it you who came up with the idea? Is it your boss who picked this specific idea out of fifty other ideas you came up with last week? Is it the QA team who managed to catch the bug which would've erased all the profits? Is it HR who hired you among other candidates? Second, no, the remaining is not $460k. In a Big Greedy Corporation I work an average annual cost of employee in "primary" location is around $200k (pre-covid). It includes office space, technology, infrastructure, salary, taxes, fees, insurances and so on. Third, that's the premium the company gets for the risk. Intern will get his salary no matter what. The company makes a bet though. You want to own part of that risk? Build your own company.
  • deeeeplearning 6y ago
    > Third, that's the premium the company gets for the risk. Intern will get his salary no matter what. The company makes a bet though. You want to own part of that risk? Build your own company. Oh please what do you work for Prager U? What Risk, if the company goes belly up they'll get a bailout from the Gov and all the Execs will keep their bloated comp packages. There is no risk for business owners. That is an illusion peddled by Ayn Randian morons.
    • sojournerc 6y ago
      Take this kind of comment elsewhere.
      • deeeeplearning 6y ago
        Stop pandering to bootlicking psychopaths.
      • ves 6y ago
        Why? The tone is offensive, but large and connected companies have received substantial bailouts, and nearly every executive has a cushy golden parachute.
        • sojournerc 6y ago
          Why? Because of the guidelines of this community: "Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community. Comments should get more thoughtful and substantive, not less, as a topic gets more divisive. When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3."
        • entropea 6y ago
          Yeah there's absolutely zero risk when government bails you out every time you fail and CEO's and Board members have multi million dollar golden parachutes. Plenty of risk for the employee though!
• sandworm101 6y ago
  >> Good work is still highly valued ... If you increase a company's profit by $500k annually Not every job has the potential for such things. "Good work" is different than profitability. A factory line worker can be the hardest working and best worker on the planet, and not increase company profits more than a few dollars an hour. That's the point about how we now value work differently. We place value on work that has direct and immediate impact on the bottom line. We don't value the hard work that goes into just keeping the doors open from day to day.
  • fxtentacle 6y ago
    I fully agree with you. I chose to argue the way I did, because it is much easier to start at that end of the spectrum. If highly skilled highly productive employees who contributed massively to the company's bottom line cannot extract a fair share of the value in exchange for their work, then it's easy to convince someone that less skilled labor has these problems, too.
    • lotsofpulp 6y ago
      > If highly skilled highly productive employees who contributed massively to the company's bottom line cannot extract a fair share of the value in exchange for their work, then it's easy to convince someone that less skilled labor has these problems, too. What is the definition of fair share? When you are shopping for something, how do you determine what the fair price is to pay? If I buy a car that enables me to earn $500k per year, do I owe the seller of the car more than someone who buys the same car to earn $50k per year?
      • mola 6y ago
        If you work hard everyday, one job should suffice for a home to live in, never worry about food, or how to pay rent, quality education for your children, and a nice vacation once a year and not having a medical event bankrupt you. If a significant part of the population work more than one job, try actively to reach this sort of life, and hardly achieve it, then something is broken. I don't which policy will make us closer to this sort of fairness, but that's the only bottom line that interests me.
• lotsofpulp 6y ago
  > Good work is still highly valued, it's just that the value is not paid to the worker, but to the company owning the work. If you increase a company's profit by $500k annually through setting up a new automation system, you'll still only get your $40k internship salary. And the company will pocket the remaining $460k, to be paid out to the owners as profits. People are paid what it costs to replace them, not the profit they generate. The less replaceable you are, the more of the profit you get. Price (pay) is the intersection of supply and demand, and nothing else. That is why factory workers in the US got outsourced. That is why when deciding what you are going to sell for the rest of your life, you should go for something that few others are able to sell. And everyone does this, it’s not some evil business plan. No one pays $5 more for the same loaf of bread. Everyone I know pays the least amount they have to. Creating a floor for that is the government’s job, not an individual business (and it can’t anyway, since it has to compete).
  • entropea 6y ago
    >That is why factory workers in the US got outsourced. Nothing makes the CEO happier to know that you believe it is the employee's fault their jobs got outsourced, and not the fault of the CEO who wanted to maximize profit at the cost of millions of good paying American union jobs that actually helped families, communities, and created the 'American Dream', all so they could afford the status that brings when they show their new multi million dollar sailboat at the regatta. The job that was outsourced still needed to be done, someone still had to do it.
    • JAlexoid 6y ago
      There's no such thing as "American Job", jut like there's no such thing as a New York job or LA job. Jobs are a product of a market, that can be as local as a building or as global as information services. American Dream cannot exist in a world with limited resources. It only existed in a rapidly expanding resource pool - taking lands from natives, creating new tech, freeing up resources by killing millions of people or digging up stuff from the ground. As such - it's not CEOs job to maintain your job, specially when those CEOs are pushed by your own pension fund managers to move your job somewhere more efficient. And finally - global poverty has dropped significantly because of that outsourcing. Ignoring that is literally being the "they toork R jerbs" South Park charachter.
• minikites 6y ago
  I found this diagram particularly helpful in illustrating this concept: https://i.imgur.com/DxFl1XX.png https://i.imgur.com/DxFl1XX.png
  • read_if_gay_ 6y ago
    The outer circle is also proportionally taxed in practice. Why is that left out?
• BobbyJo 6y ago
  The reality is that the labor is only worth 500k to the company. If the individual could extract the same 500K from their labor without the company, they would (hopefully). They don't because it's not purely the labor generating that value, but the capital invested along with that labor. Being a great programmer is worthless without a computer. I think a really good example is a story from Google. An intern changed the compression of the Google logo on the search page and shaved off a few bytes. Since Google serves that page billions of times, that saved google a 10's of thousands of dollars a year, and was literally minutes of work. If the same intern did the same work anywhere else, it would have been almost worthless.
  • betaby 6y ago
    Regulatory capture prevents from entering the market directly. Among with many other harmful regulations.
• 6gvONxR4sf7o 6y ago
  In one of my first jobs, I came up with a novel idea to automate a big chunk of work, during the early days of ML. We A/B tested it and it increased the company’s revenue by like a third while decreasing costs (and this wasn’t a tiny company). It took a whole team a few months to implement the idea, as it involved a few different skill sets. To your point, who deserved to capture the value here? Well there was an A/B test to clearly show what caused the boost, and a simple trail from my research (done on my own initiative) to the team's implementation to the revenue, so we at least knew that this group of people was collectively responsible. Nobody got raises, bonuses, or anything. If we had captured that value it would have had to multiply our comp many times over. So why should I have ever gone above and beyond in the first place? Meanwhile my manager repeatedly complained to me that I only worked 9-5. This early experience was formative in my workplace opinions. Go figure.
  • 6gvONxR4sf7o 6y ago
    [I'm adding thoughts here instead of editing the above] Speaking more broadly, these kinds of misaligned incentives are probably doing massive damage to the economy, in terms of lost productivity and innovation. A huge chunk of the people who should be productive and be innovating literally don't have an incentive to do anything above and beyond keeping their job. It's all adversarial and extractive instead of cooperative. On both sides. Employers won't pay workers for the value the workers provide, and in return workers surf HN and reddit all day. Meanwhile, apparently there's some kind of epidemic of "bullshit jobs." Again, go figure.
    • WorldMaker 6y ago
      Arguably the incentives aren't aligned, innovation isn't happening, and "bullshit jobs" all exist because we've hit some sort of maximal productivity trough where the free market doesn't feel a need to incentivize innovation/productivity any further. This is often what a lot of people mean when they claim we've hit "late stage capitalism": it is possible the paperclip maximizers have already "eaten the world", turned everything to paperclips, and all that is left is "bullshit jobs". There's no reason to incentivize innovation because everything is already paperclips.
• rayiner 6y ago
  Except your premise that returns to capital are going up is false: https://www.vox.com/2015/4/1/8320937/this-26-year-old-grad-student-didnt-really-debunk-piketty-but-what-he https://www.vox.com/2015/4/1/8320937/this-26-year-old-grad-s... ("Rognlie finds that when you account for depreciation properly, the capital share's increase has been entirely about housing.") Returns to owning land and housing (rents) have gone up. That has come at the expense of both returns to labor, and returns to all other kinds of capital (stock ownership, etc.). This is obvious. Stock market returns aren't what they used to be. Banks are making 4% on mortgages, versus 8% back in the day. The country is awash in 0% financing for cars, refrigerators, etc. There is increasing inequality in how labor income is distributed. CEO salaries have gone up, programmer salaries have gone up, but secretary salaries have stagnated. But that's a separate issue than returns to capital ownership going up.
  • fxtentacle 6y ago
    I would take the constant growth in VC investments to mean that it's profitable. Also: https://wolfstreet.com/2015/11/04/corporate-profits-are-the-stock-markets-foundation-what-will-break-them/ https://wolfstreet.com/2015/11/04/corporate-profits-are-the-... Under "This is a new America" you can watch corporate profits grow and grow. But both your source and my source are 5 years old already. A lot has changed since then.
    • rayiner 6y ago
      Comparing corporate profits to GDP doesn’t make much sense. The BEA corporate profits number includes profits earned overseas, which aren’t included GDP. Corporate profits divided by GDP could go up without anything changing in the economic relationship between workers and corporations with respect to work done in the US.
• yibg 6y ago
  The problem with this is, if the intern doesn't add any value to the company does the intern not get paid or still gets paid the $40k? What if the intern only added $10k worth of value (however that's measured). Does the intern return $30k? You can't have your cake and eat it too; get all the reward without any of the risk.
  • i_haz_rabies 6y ago
    If it blew up in a few months due to some unforeseen problem, the intern would receive some of that risk in the form of a pink slip and a bad reference.
    • yibg 6y ago
      Some jobs may not have directly attributable monetary contribution but still are needed. But let’s assume we can attach a net dollar amount to each job and the company let’s go people that don’t contribute as much as they cost. Even in this case the company still loses out from the intern. That money still need to come from somewhere, most likely from profit derived from other employees. The point is “the intern increased the company’s profit by 500k annually but only gets paid 40k” is not the problem it’s made out to be. That 500k wasn’t created out of thin air. There were other employees in supporting functions that made it possible. That extra 460k goes to pay for them too, as well as for the employees that aren’t as productive. Those are the risks the company takes on.
      • i_haz_rabies 6y ago
        That's a great argument in favour of corporate taxes.
        • yibg 6y ago
          No arguments from me. Or at least close the loopholes.
    • GoOnThenDoTell 6y ago
      No one actually expects production level quality from an intern
• newacct583 6y ago
  > Good work is still highly valued, it's just that What about the people who don't or can't do good work, though? Your comment is all about better compensation for what amount to elite software developers. And elite software developers are already well compensated. Maybe not as well as they should be by your calculus, but still "well" in comparison to the people the grandparent comment was talking about.
• cptthrowaway 6y ago
  > you'll still only get your $40k internship salary. And the company will pocket the remaining $460k, to be paid out to the owners as profits. It's because of this that I try to work as little as possible, preferably remotely. I claim to the company that I work 8 hours, in reality I work between 4 to 6 hours, and if I'm really quick, simply 2 hours (happens rarely). That's how I keep my "profit", and if I meet expectations it's good enough for me. I don't think they'd be happy once they find out.
• WalterBright 6y ago
  Any company would immediately hire someone who adds $500k annually in profit, and would steal him away from someone only paying him $40k, by offering more money. The idea there's some large gap between value provided and value paid is unstable and completely unsustainable. As for owning stocks, pretty much everyone can. Robinhood has $0 commissions and sells fractional shares. There's no reason why people can't buy stocks.