3 ms·

> Instead, workers usually prefer to estimate what the profitability will be up front and determine what they want out of the pie based on that assumption. I'm

> Instead, workers usually prefer to estimate what the profitability will be up front and determine what they want out of the pie based on that assumption. I'm not certain what you mean here. When does this happen? This doesn't sound like the usual method or motivation for job seeking.

randomdata 6y ago
It happens all the time. It is why software developers in incredibly high margin tech companies will ask for incomes >$100,000/year, while servers at low margin restaurants are left to ask for minimum wage. Tech companies can end up never making a dime and restaurants can produce fortunes, but on a statistical probability basis, the profitability of a tech company is more likely to round out to that $100,000 per employee figure and a restaurant the minimum wage figure, on average. That makes those asks to be quite reasonable and the market settles there. When the future is unknown, when the futures contracts are being established, one can only guess as to how much money that labour input is going to return. The value that is established for a given job, commensurable to its relation to producing that future income, is always done on a best guess basis, knowing that reality can swing widely in either direction. It's an average, of sorts. If you think the prevailing best guess is wrong and that a restaurant will easily make enough to give you back $100,000 as a server, you can defer your payout until that quantity is known. This arrangement does happen, but is usually eschewed as the worker would usually rather have the guaranteed known quantity, based on the best guess of their contribution in the profitability, even if removed from the final earnings, for their work. It reduces their risk. As an aside, servers at restaurants are an interesting example as they do commonly play both sides. They lock in some of their income on the future's market, but also capture a share of the profit when it is made. There is a lot of flexibility in your options. Typically, most workers prefer to stay within the futures market entirely, though, as they want the security of a known quantity for their income, rather than making millions one year and loosing millions the next.
- crumbshot 6y ago
  Are you talking about employees being paid a wage? If so, what you describe isn't what happens for the vast majority of people. We need income to pay for rent (or mortgage), food, utilities, and other essentials. With a bit saved over, where we can. There's no scope for estimating the profitability of the business or anything like that, we just need money to live. I'm sure it's the same for Apple's factory workers in the article.
  - randomdata 6y ago
    Yes, although not specifically as the specific dispersal mechanism is immaterial. A wage is one of many ways payout of the futures contact can be structured.

randomdata 6y ago

It happens all the time. It is why software developers in incredibly high margin tech companies will ask for incomes >$100,000/year, while servers at low margin restaurants are left to ask for minimum wage. Tech companies can end up never making a dime and restaurants can produce fortunes, but on a statistical probability basis, the profitability of a tech company is more likely to round out to that $100,000 per employee figure and a restaurant the minimum wage figure, on average. That makes those asks to be quite reasonable and the market settles there. When the future is unknown, when the futures contracts are being established, one can only guess as to how much money that labour input is going to return. The value that is established for a given job, commensurable to its relation to producing that future income, is always done on a best guess basis, knowing that reality can swing widely in either direction. It's an average, of sorts. If you think the prevailing best guess is wrong and that a restaurant will easily make enough to give you back $100,000 as a server, you can defer your payout until that quantity is known. This arrangement does happen, but is usually eschewed as the worker would usually rather have the guaranteed known quantity, based on the best guess of their contribution in the profitability, even if removed from the final earnings, for their work. It reduces their risk. As an aside, servers at restaurants are an interesting example as they do commonly play both sides. They lock in some of their income on the future's market, but also capture a share of the profit when it is made. There is a lot of flexibility in your options. Typically, most workers prefer to stay within the futures market entirely, though, as they want the security of a known quantity for their income, rather than making millions one year and loosing millions the next.

crumbshot 6y ago
Are you talking about employees being paid a wage? If so, what you describe isn't what happens for the vast majority of people. We need income to pay for rent (or mortgage), food, utilities, and other essentials. With a bit saved over, where we can. There's no scope for estimating the profitability of the business or anything like that, we just need money to live. I'm sure it's the same for Apple's factory workers in the article.
- randomdata 6y ago
  Yes, although not specifically as the specific dispersal mechanism is immaterial. A wage is one of many ways payout of the futures contact can be structured.