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What you are seeing here with the labor market is essentially the same thing we are seeing with real estate. It is a liquidation and recapitalization into a hig

What you are seeing here with the labor market is essentially the same thing we are seeing with real estate. It is a liquidation and recapitalization into a higher asset class. People selling their homes, cashing out and using their equity to get a larger home with a larger basis for appreciation. Similarly for the labor market, employees taking their experience and recapitalizing into other roles with better benefits and pay. What you see is effectively a greater polarization between those who do well and those who don’t. See amazons de facto policy of give the top tier best benefits, raised and comp and to hell with the rest. So where do things end up? Well, the rich get richer. Ultimately everyone moves up since there’s such a demand for (houses|labor). However as we see with first time home buyers, it gets harder, those who are paying more end up demanding more. Furthermore there is a never ending supply of labor which is why companies like Amazon are not taking this as seriously as you’d expect. There will always be H1b de facto slavery which creates a large inventory pool. However the “housing” is effectively top tier employees which command top dollar. Ultimately I don’t think the system changes except for the best of the best. Because as always it is very supply constrained.

nickjj 5y ago
> See amazons de facto policy of give the top tier best benefits, raised and comp and to hell with the rest. I think the last part of that is really important. Your comment made me think back to 2002 when I was playing a game called Diablo II. I used to substantially overpay for things because the things I were buying helped me make 10x the amount I was investing (all in game currency). I didn't care that I was buying things for 2-3x what others were offering to pay. Salary and the value you produce (direct or indirect) is the same deal. If an employee generates a million dollars of value a year, paying them 300k instead of 150k is still one of the best investments you can ask for -- especially if you amplify this to 10 developers. Now you're talking about making 10 million dollars while only "overpaying" 1.5 million. That's a ~6.5x return.

nickjj 5y ago

> See amazons de facto policy of give the top tier best benefits, raised and comp and to hell with the rest. I think the last part of that is really important. Your comment made me think back to 2002 when I was playing a game called Diablo II. I used to substantially overpay for things because the things I were buying helped me make 10x the amount I was investing (all in game currency). I didn't care that I was buying things for 2-3x what others were offering to pay. Salary and the value you produce (direct or indirect) is the same deal. If an employee generates a million dollars of value a year, paying them 300k instead of 150k is still one of the best investments you can ask for -- especially if you amplify this to 10 developers. Now you're talking about making 10 million dollars while only "overpaying" 1.5 million. That's a ~6.5x return.