6 ms·

Salary doesn't reflect skill level or worth to the company. It's at best correlated and shouldn't be part of this discussion.

code_scrapping 6y ago
If we're discussing the capitalist society, the salary does represent in a very literal form your worth to the company, and by consequence probably your skill level too. I'll admit that it's more complicated than that. What you should not associate with your salary is your own sense of worth or success, because there you're on mentally unstable grounds. But in my original response I just gave a random example, and you're right that we should not expand the discussion in that direction.
- richardwhiuk 6y ago
  Assuming that the labour market is efficient, which is manifestly not true.
- Hammershaft 6y ago
  The definition of "worth" in that context is also contingent on factors that have nothing to do with the quality or social value of the skill that salary supposedly represents. Can you create an exaggerated perception of your skill in others? To what degree does your skill have latent demand vs effective demand? To what degree has your skill been monopsonized? To what degree does your skill apply to solving problems that are currently externalized? Some simple examples: An amazing social worker could change the lives of dozens if not hundreds of people, however, since those people are broke & homeless, her target demographic is unable to compensate her for what she does (latent demand), and her salary is very meagre and state subsidized. An expert in environmental restoration could save a strip mining conglomerate millions of dollars while improving the health of hundreds of thousands of people in communities downriver, however because that conglomerate chooses to externalize those costs onto those communities, that environmental expert also ends up recieving a meagre state subsidized salary.
- burade 6y ago
  Lmao no it doesn't. Your salary is simply the amount of money you have convinced a company to pay you. You could waste 3 years making 100k a year only to deliver a failed project that resulted in 0 revenue.
  - Domenic_S 6y ago
    No, they're right but I can see how you interpreted it. They said salary is "your worth to the company" -- meaning, the amount of money they're willing to part with to have you, or to keep you from working elsewhere (your "worth" to them). I think you took it to mean actual calculated dollar-value driven-by-the-eng worth. Even thinking about that, your example is wrong because it ignores expected value (EV) of a project which takes into account risk. For example, if your theoretical project has a 10% chance of generating $5mm/yr and a 90% of completely failing, the EV of the project is $500k/yr - so it's totally worth it to pay an eng $100k/yr to work on it, even if it fails.
    - bonoboTP 6y ago
      No they mean that bullshitters, asslickers, and manipulative but charismatic and confident politics players often get more recognition and salary than the objectively skillful and technically competent, value delivering people. Sure you can redefine "worth" to include scheming and taking undue credit and deflecting blame, but it's a stretch.
      - RobertKerans 6y ago
        To keep things in track in the spirit of the originating comment, do those people not fit exactly what the commenter was talking about? That they may be average/below average at many things, but they have spent a great deal of time to become well above average at, say, understanding how to manipulate people (which I stress may not be a conscious decision to be a bad person), rather than having, say, expert knowledge of automobile mechanics? I mean it's a shitty thing, but it's not really about "worth" per se, it's about skill, and that skill doesn't have to be ethically positive/neutral
- kodoque2 6y ago
  In the same way that we should distinguish producing wealth and extracting wealth, we should distinguish worth and ability to signal worth.
- fallingfrog 6y ago
  No, salary reflects leverage- how hard you are to replace. Not the amount of value you generate. There are lots of ways for a company to figure out ways to make you easier to replace, thereby decreasing your leverage, and the difference between the amount of value you generate, and the amount they have to pay you, is their profit.
- Der_Einzige 6y ago
  Not expecting a non-commie to come in and advocate for the labor theory of value on HN! Kudos to you for having the balls to do it!
- thescriptkiddie 6y ago
  In capitalism your salary is by definition less than your value to the company. Additionally, there is a tendency for wages to be reduced to the social minimum.
  - dragonwriter 6y ago
    > In capitalism your salary is by definition less than your value to the company. No, it's not. Under ideal market conditions, the price of any good (including labor) is exactly equal to its value to the marginal purchaser (and, also, to the marginal seller.)
    - Supermancho 6y ago
      > Under ideal market conditions Human on Human interactions, which are required for the majority of employment, employ game theory to ensure that your pay is below your value. When talking about labor groups/unions you can approach an ideal scenario. Even those will have variation that are manipulated by human to human interaction. There are no "ideal market conditions". The real conditions are such that, statistically, you will be underpaid in comparison to your value within a company. Sometimes you get lucky and drop into an upside down position, which is overpaid, but that's the best wage slaves can hope for.
      - dragonwriter 6y ago
        > Human on Human interactions, which are required for the majority of employment, employ game theory to ensure that your pay is below your value. Sure. But now we're talking about “in practice” not “by definition”.
        Supermancho 6y ago
        In theory there is no difference between theory and practice – in practice there is” (Yogi Berra) I do not use the "ideal market conditions" theory to describe what happens in practice, because it has little utility (except in predicting some very constrained trends).
- HowTheStoryEnds 6y ago
  It represents your cost to the company: something they try to keep down and which gets countered by their need to have you, the scarcity of your position and most importantly your willingness to walk away. If people got paid their actual worth to the company there probably wouldn't be much profit to go around at the end.
danielbarla 6y ago
I wouldn't say it's _completely_ separate, in the sense that within a certain field + industry combination, the salaries will be fairly stable, and from there it's a combination of skill, worth to company, being able to market yourself, be visible, and being in a position (financially and otherwise) to be able to bargain effectively for your salary. Along with your networks, looks, etc. With an added heap of some randomness. All of these add a lot of noise, but there's still an underlying signal there. It's kind of like BMI; at an individual level, it may be highly misleading due to the variance, but at a population level, it's fairly insightful.
robertlagrant 6y ago
> Salary doesn't reflect skill level or worth to the company. It's at best correlated and shouldn't be part of this discussion. I think that's strong. It will generally reflect perceived value, which is often caused by skill level and worth-based factors.

code_scrapping 6y ago

If we're discussing the capitalist society, the salary does represent in a very literal form your worth to the company, and by consequence probably your skill level too. I'll admit that it's more complicated than that. What you should not associate with your salary is your own sense of worth or success, because there you're on mentally unstable grounds. But in my original response I just gave a random example, and you're right that we should not expand the discussion in that direction.

richardwhiuk 6y ago
Assuming that the labour market is efficient, which is manifestly not true.
Hammershaft 6y ago
The definition of "worth" in that context is also contingent on factors that have nothing to do with the quality or social value of the skill that salary supposedly represents. Can you create an exaggerated perception of your skill in others? To what degree does your skill have latent demand vs effective demand? To what degree has your skill been monopsonized? To what degree does your skill apply to solving problems that are currently externalized? Some simple examples: An amazing social worker could change the lives of dozens if not hundreds of people, however, since those people are broke & homeless, her target demographic is unable to compensate her for what she does (latent demand), and her salary is very meagre and state subsidized. An expert in environmental restoration could save a strip mining conglomerate millions of dollars while improving the health of hundreds of thousands of people in communities downriver, however because that conglomerate chooses to externalize those costs onto those communities, that environmental expert also ends up recieving a meagre state subsidized salary.
burade 6y ago
Lmao no it doesn't. Your salary is simply the amount of money you have convinced a company to pay you. You could waste 3 years making 100k a year only to deliver a failed project that resulted in 0 revenue.
- Domenic_S 6y ago
  No, they're right but I can see how you interpreted it. They said salary is "your worth to the company" -- meaning, the amount of money they're willing to part with to have you, or to keep you from working elsewhere (your "worth" to them). I think you took it to mean actual calculated dollar-value driven-by-the-eng worth. Even thinking about that, your example is wrong because it ignores expected value (EV) of a project which takes into account risk. For example, if your theoretical project has a 10% chance of generating $5mm/yr and a 90% of completely failing, the EV of the project is $500k/yr - so it's totally worth it to pay an eng $100k/yr to work on it, even if it fails.
  - bonoboTP 6y ago
    No they mean that bullshitters, asslickers, and manipulative but charismatic and confident politics players often get more recognition and salary than the objectively skillful and technically competent, value delivering people. Sure you can redefine "worth" to include scheming and taking undue credit and deflecting blame, but it's a stretch.
    - RobertKerans 6y ago
      To keep things in track in the spirit of the originating comment, do those people not fit exactly what the commenter was talking about? That they may be average/below average at many things, but they have spent a great deal of time to become well above average at, say, understanding how to manipulate people (which I stress may not be a conscious decision to be a bad person), rather than having, say, expert knowledge of automobile mechanics? I mean it's a shitty thing, but it's not really about "worth" per se, it's about skill, and that skill doesn't have to be ethically positive/neutral
kodoque2 6y ago
In the same way that we should distinguish producing wealth and extracting wealth, we should distinguish worth and ability to signal worth.
fallingfrog 6y ago
No, salary reflects leverage- how hard you are to replace. Not the amount of value you generate. There are lots of ways for a company to figure out ways to make you easier to replace, thereby decreasing your leverage, and the difference between the amount of value you generate, and the amount they have to pay you, is their profit.
Der_Einzige 6y ago
Not expecting a non-commie to come in and advocate for the labor theory of value on HN! Kudos to you for having the balls to do it!
thescriptkiddie 6y ago
In capitalism your salary is by definition less than your value to the company. Additionally, there is a tendency for wages to be reduced to the social minimum.
- dragonwriter 6y ago
  > In capitalism your salary is by definition less than your value to the company. No, it's not. Under ideal market conditions, the price of any good (including labor) is exactly equal to its value to the marginal purchaser (and, also, to the marginal seller.)
  - Supermancho 6y ago
    > Under ideal market conditions Human on Human interactions, which are required for the majority of employment, employ game theory to ensure that your pay is below your value. When talking about labor groups/unions you can approach an ideal scenario. Even those will have variation that are manipulated by human to human interaction. There are no "ideal market conditions". The real conditions are such that, statistically, you will be underpaid in comparison to your value within a company. Sometimes you get lucky and drop into an upside down position, which is overpaid, but that's the best wage slaves can hope for.
    - dragonwriter 6y ago
      > Human on Human interactions, which are required for the majority of employment, employ game theory to ensure that your pay is below your value. Sure. But now we're talking about “in practice” not “by definition”.
      - Supermancho 6y ago
        In theory there is no difference between theory and practice – in practice there is” (Yogi Berra) I do not use the "ideal market conditions" theory to describe what happens in practice, because it has little utility (except in predicting some very constrained trends).
HowTheStoryEnds 6y ago
It represents your cost to the company: something they try to keep down and which gets countered by their need to have you, the scarcity of your position and most importantly your willingness to walk away. If people got paid their actual worth to the company there probably wouldn't be much profit to go around at the end.

danielbarla 6y ago

I wouldn't say it's _completely_ separate, in the sense that within a certain field + industry combination, the salaries will be fairly stable, and from there it's a combination of skill, worth to company, being able to market yourself, be visible, and being in a position (financially and otherwise) to be able to bargain effectively for your salary. Along with your networks, looks, etc. With an added heap of some randomness. All of these add a lot of noise, but there's still an underlying signal there. It's kind of like BMI; at an individual level, it may be highly misleading due to the variance, but at a population level, it's fairly insightful.

robertlagrant 6y ago

> Salary doesn't reflect skill level or worth to the company. It's at best correlated and shouldn't be part of this discussion. I think that's strong. It will generally reflect perceived value, which is often caused by skill level and worth-based factors.