5 ms·

By its nature, you get more value out of an employee than you pay in wages. Otherwise, there would be no point to hiring anyone.

throw123123123 4y ago
At the same time, the proposal has to be better than what others companies offer, or nobody would accept the position.
jollofricepeas 4y ago
Exactly. Fundamentally, tech workers don’t seem to understand this point mainly because they are making more money than “everyone else.” The other reason is that we as humans don’t understand big numbers. Big ape brains can’t understand the gap between $1 million and $1 billion let alone 100 billion. If software engineers would have banded together a long time ago to get a larger piece of the pie like professional athletes, then…. - Senior engineers would make NFL wages - And quants would be making NBA/NFL wages
- edanm 4y ago
  > - Senior engineers would make NFL wages That is an absurd exaggeration, unless by "senior engineers" you are including people who do a lot more than "just" engineering, e.g. build companies, build products, etc. The reason NFL wages are so high is not just that they bring in a lot of money, it's that the players are to a large extent irreplaceable. If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome. So each of them commands a very large salary - because the alternatives are worse, and will lead to worse outcomes, which will lead to less money for the team. And at the top end, the best players are a massive draw that makes teams tons of money. Compare that to engineers. We are, to a much larger extent, replaceable. If Amazon can't hire the 1000 "best" engineers, going to the next 1000 will probably not noticeably impact their product. I'm not denying that there are talent differentials between engineers - I think it's even more than the commonly cited 10x. But it's still not that big, definitely not bigger than the difference in NFL players (since engineering is not competitive.) Note that if you stretch the definition of software engineer to include people building and launching brand new products, building huge successful teams, etc, then you're getting into the realm of CTOs, CEOs, founders, etc, which are far less replaceable (I'm a good engineer, but I couldn't have built Stripe). But then we're talking about the people who are adequately compensated for their work.
  - xmprt 4y ago
    > If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome I genuinely believe that a league made of the 500-1000 rank players would be just as (or at least almost as) entertaining as one with the top 500 players. Relative rank is what matters and it's why NCAA March Madness is so popular despite being made up of relatively low ranked players.
    - listenallyall 4y ago
      The AFL, WFL, USFL, XFL, AAFL, 2nd XFL and 2nd USFL would likely disagree. "March Madness" is an anomaly, a single-elimination tournament with 48 games in one weekend with a history of upsets and buzzer-beaters. Additionally, college basketball and football in the US benefit greatly from the local and alumni network affinity for the programs, that doesn't exist with, say, minor league baseball or the NBA D-League.
      - philwelch 4y ago
        We also have a third XFL coming soon! The AFL was actually relatively successful since it forced a merger with the NFL. Meanwhile, at least according to a 30 for 30 documentary, the original USFL had a potentially viable niche as a second-tier spring league for awhile until they made the bizarre decision to switch to the fall football season and try to force an NFL merger.
      - xmprt 4y ago
        I mean that if the NFL didn't exist then the AFL would be popular. A better example would be Japanese Baseball. A lot of those players are great but very few of them ended up transferring to the American leagues, yet the sport is still extremely popular in Japan.
    - France_is_bacon 4y ago
    - philwelch 4y ago
- izgzhen 4y ago
  While senior engineers don’t make NFL wages, the executives do (including some former senior engineers). Would it be fair to compare execs to NFL player instead? (While engineers are those work behind the scene to support the game)
- thrixton 4y ago
  I doubt this to be honest. If you could hire 2 or 5 of the next best engineers for the price of a top pick 'NFL' engineer, you'd be ahead in output in most situations. The same does not go for the NFL.
kortilla 4y ago
You used that employee’s labor in conjunction with a bunch of other things to produce more value than the wages. If the value was in just the work alone and not the work directed at the right things in the right environment, there would be no point in working for Amazon and you could just collect the entire revenue yourself. This is the main reason it’s completely illogical to expect that an employee receive most of the revenue their labor helped generate.
- tjs8rj 4y ago
  This is the answer and why the labor theory of value tends to fall flat without due consideration to the labor of managers and the cumulative returns of labor. If your work earns $100k/y in revenue for a company, that doesn't mean your work created it entirely. The continued dividends of organization of the company, customer acquisition, legal apparatus, support of your entire organization made that revenue possible and are entitled to a share of it too. It took a village to make that revenue, unless it didn't, in which case: quit and do it yourself to keep all that money. This is a self-correcting system that ensures everyone gets paid approximately what they contributed.
  - tsimionescu 4y ago
    While you're right that you have to account for the entire organization, not just the engineers (obviously), the gap between what the owners earn compared to all other employees combined is still wildly disproportionate. It's of course hard to precisely quantify these things, but the worsening gap between worker and owner incomes is quite obviously not proportional to any change in how much value owners add to a corporation compared to workers (if anything, workers' contribution has been increasing, not decreasing, as productivity tools and techniques have been advancing).
    - philwelch 4y ago
      You're not taking risk premium into account. Owners run the risk of working for several years and getting absolutely nothing in return. Sometimes they put their own money into the company and never get it back.
oh_sigh 4y ago
On average, yes, but any given employee may be a net negative and not really earn their keep.
- rob74 4y ago
  Well, from what I hear, Amazon has several methods in place to quickly "weed out" these employees (see https://en.wikipedia.org/wiki/Criticism_of_Amazon#Treatment_of_workers https://en.wikipedia.org/wiki/Criticism_of_Amazon#Treatment_...). Gotta make sure that wealth keeps flowing smoothly from the bottom to the top...
kareemsabri 4y ago
No, on AVERAGE you get more value out of each employee than you pay in wages, if you turn a profit (let's put aside investing in growth / VC funding for simplicity). That's how you stay in business. That does not mean for each employee you are efficiently paying them based on the value created for the business, some may be underpaid and some grossly overpaid.
philwelch 4y ago
By its nature, the employee's wages are more valuable to them than the time and effort they are expending on the job. Otherwise, there would be no point to working. What's happening here is gains from trade. I have a lot of free time and a set of skills, while my employer has a lot of money and the willingness to shoulder the risk that the work they're asking me to do won't be profitable for them in the long run. Both sides get something out of the deal.
CryptoBanker 4y ago
On average that is true, but certainly employees who make minimum wage contribute a higher percentage of their salary than someone who earns 6 digits, to the point that the weapon who earns 6 digits may actually come out ahead depending on how many employees there are

throw123123123 4y ago

At the same time, the proposal has to be better than what others companies offer, or nobody would accept the position.

jollofricepeas 4y ago

Exactly. Fundamentally, tech workers don’t seem to understand this point mainly because they are making more money than “everyone else.” The other reason is that we as humans don’t understand big numbers. Big ape brains can’t understand the gap between $1 million and $1 billion let alone 100 billion. If software engineers would have banded together a long time ago to get a larger piece of the pie like professional athletes, then…. - Senior engineers would make NFL wages - And quants would be making NBA/NFL wages

edanm 4y ago
> - Senior engineers would make NFL wages That is an absurd exaggeration, unless by "senior engineers" you are including people who do a lot more than "just" engineering, e.g. build companies, build products, etc. The reason NFL wages are so high is not just that they bring in a lot of money, it's that the players are to a large extent irreplaceable. If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome. So each of them commands a very large salary - because the alternatives are worse, and will lead to worse outcomes, which will lead to less money for the team. And at the top end, the best players are a massive draw that makes teams tons of money. Compare that to engineers. We are, to a much larger extent, replaceable. If Amazon can't hire the 1000 "best" engineers, going to the next 1000 will probably not noticeably impact their product. I'm not denying that there are talent differentials between engineers - I think it's even more than the commonly cited 10x. But it's still not that big, definitely not bigger than the difference in NFL players (since engineering is not competitive.) Note that if you stretch the definition of software engineer to include people building and launching brand new products, building huge successful teams, etc, then you're getting into the realm of CTOs, CEOs, founders, etc, which are far less replaceable (I'm a good engineer, but I couldn't have built Stripe). But then we're talking about the people who are adequately compensated for their work.
- xmprt 4y ago
  > If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome I genuinely believe that a league made of the 500-1000 rank players would be just as (or at least almost as) entertaining as one with the top 500 players. Relative rank is what matters and it's why NCAA March Madness is so popular despite being made up of relatively low ranked players.
  - listenallyall 4y ago
    The AFL, WFL, USFL, XFL, AAFL, 2nd XFL and 2nd USFL would likely disagree. "March Madness" is an anomaly, a single-elimination tournament with 48 games in one weekend with a history of upsets and buzzer-beaters. Additionally, college basketball and football in the US benefit greatly from the local and alumni network affinity for the programs, that doesn't exist with, say, minor league baseball or the NBA D-League.
    - philwelch 4y ago
      We also have a third XFL coming soon! The AFL was actually relatively successful since it forced a merger with the NFL. Meanwhile, at least according to a 30 for 30 documentary, the original USFL had a potentially viable niche as a second-tier spring league for awhile until they made the bizarre decision to switch to the fall football season and try to force an NFL merger.
    - xmprt 4y ago
      I mean that if the NFL didn't exist then the AFL would be popular. A better example would be Japanese Baseball. A lot of those players are great but very few of them ended up transferring to the American leagues, yet the sport is still extremely popular in Japan.
  - France_is_bacon 4y ago
  - philwelch 4y ago
izgzhen 4y ago
While senior engineers don’t make NFL wages, the executives do (including some former senior engineers). Would it be fair to compare execs to NFL player instead? (While engineers are those work behind the scene to support the game)
thrixton 4y ago
I doubt this to be honest. If you could hire 2 or 5 of the next best engineers for the price of a top pick 'NFL' engineer, you'd be ahead in output in most situations. The same does not go for the NFL.

kortilla 4y ago

You used that employee’s labor in conjunction with a bunch of other things to produce more value than the wages. If the value was in just the work alone and not the work directed at the right things in the right environment, there would be no point in working for Amazon and you could just collect the entire revenue yourself. This is the main reason it’s completely illogical to expect that an employee receive most of the revenue their labor helped generate.

tjs8rj 4y ago
This is the answer and why the labor theory of value tends to fall flat without due consideration to the labor of managers and the cumulative returns of labor. If your work earns $100k/y in revenue for a company, that doesn't mean your work created it entirely. The continued dividends of organization of the company, customer acquisition, legal apparatus, support of your entire organization made that revenue possible and are entitled to a share of it too. It took a village to make that revenue, unless it didn't, in which case: quit and do it yourself to keep all that money. This is a self-correcting system that ensures everyone gets paid approximately what they contributed.
- tsimionescu 4y ago
  While you're right that you have to account for the entire organization, not just the engineers (obviously), the gap between what the owners earn compared to all other employees combined is still wildly disproportionate. It's of course hard to precisely quantify these things, but the worsening gap between worker and owner incomes is quite obviously not proportional to any change in how much value owners add to a corporation compared to workers (if anything, workers' contribution has been increasing, not decreasing, as productivity tools and techniques have been advancing).
  - philwelch 4y ago
    You're not taking risk premium into account. Owners run the risk of working for several years and getting absolutely nothing in return. Sometimes they put their own money into the company and never get it back.

oh_sigh 4y ago

On average, yes, but any given employee may be a net negative and not really earn their keep.

rob74 4y ago
Well, from what I hear, Amazon has several methods in place to quickly "weed out" these employees (see https://en.wikipedia.org/wiki/Criticism_of_Amazon#Treatment_of_workers https://en.wikipedia.org/wiki/Criticism_of_Amazon#Treatment_...). Gotta make sure that wealth keeps flowing smoothly from the bottom to the top...

kareemsabri 4y ago

No, on AVERAGE you get more value out of each employee than you pay in wages, if you turn a profit (let's put aside investing in growth / VC funding for simplicity). That's how you stay in business. That does not mean for each employee you are efficiently paying them based on the value created for the business, some may be underpaid and some grossly overpaid.

philwelch 4y ago

By its nature, the employee's wages are more valuable to them than the time and effort they are expending on the job. Otherwise, there would be no point to working. What's happening here is gains from trade. I have a lot of free time and a set of skills, while my employer has a lot of money and the willingness to shoulder the risk that the work they're asking me to do won't be profitable for them in the long run. Both sides get something out of the deal.

CryptoBanker 4y ago

On average that is true, but certainly employees who make minimum wage contribute a higher percentage of their salary than someone who earns 6 digits, to the point that the weapon who earns 6 digits may actually come out ahead depending on how many employees there are