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I don't see the problem here. A burger flipper makes $10 in an hour. An engineer designing a burger flipping robot makes $100. Their department's engineering

I don't see the problem here. A burger flipper makes $10 in an hour. An engineer designing a burger flipping robot makes $100. Their department's engineering manager makes $1,000. The CTO makes $10,000. The hardest worker here is the burger flipper. They work 16 hour days just to afford rent, and it's hard manual labor. The engineer makes 10 times as much because each line of code they write produces more value than an entire day of manual burger flipping. Their department manager makes 10 times as much because they solve problems impacting entire teams of engineers that are more important and more difficult than coding problems. The CTO makes 10 times that because their policies affect many engineering departments throughout a large organization and have multibillion-dollar consequences. It doesn't matter if they work 1000 times harder than a burger flipper, they probably work less than the burger flipper. But their work is 1000 times more important, so it's worth 1000 times more.

topaz0 4y ago
This is not 100% wrong, but you are missing an important part of the calculus, which is that as you go up the hierarchy you have more overall and more concentrated power to demand higher pay, out of proportion to the value of your labor.
- pdonis 4y ago
  > higher pay, out of proportion to the value of your labor To the extent this is a problem, it's a problem of corporate governance. Unfortunately, I'm not sure that problem is fixable, since its root cause is a shift in corporate ownership from individual stockholders to mutual funds (because mutual funds is how most people now invest their retirement savings in 401ks or the equivalent). The effect of this on individual corporations is to make their time horizon for stock price growth much shorter, because unlike individual retirement investors, most of whom adopt a buy and hold strategy and don't trade very often, mutual funds trade stocks all the time based on short term performance.
  - topaz0 4y ago
    Somehow that wasn't always the case in the past, so presumably it's also possible for things to be different in the future. If we have the audacity to imagine a different world, it is fixable through organizing and demanding that incentives be aligned with our values rather than with the spiraling fortunes of a handful of extremely self-centered people.
    - pdonis 4y ago
      > that wasn't always the case in the past Yes, that's correct. The movement of stock ownership to mutual funds largely took place in the few decades after WW II. > presumably it's also possible for things to be different in the future Yes, but the changes that would have to take place are quite drastic. I don't think disallowing mutual funds is an option. But the only other mechanism of control (aside from market forces--see below) would be to drastically change the regulations concerning corporate governance, and it's not even clear that that would do more than exchange one problem for another, since regulatory capture is a thing. The only other way to change the incentives facing corporate governance structures is to change the market, either on the producer side or the consumer side. On the consumer side, consumers would have to stop buying goods and services from companies that overpay their CEOs and underpay their workers. Unfortunately that would mean consumers choosing to take a huge economic hit, since those same companies provide huge economic value to consumers. (And in some cases, such as Google and Facebook, consumers don't even have the option of not paying, since the services are free; they would have to stop using the services altogether even though they're free, which is probably even harder to make happen than getting consumers to stop paying for something.) On the producer side, new companies that are structured differently in terms of governance (for example as worker cooperatives) would need to enter the market and out-compete the existing companies. Sooner or later that might well happen, but it could be quite a long time.
      - topaz0 4y ago
        I didn't say it would be easy. What I said is that the potential for change is rooted in organizing and class struggle. > regulatory capture Regulatory capture just is the capitalist class organizing to shape the structures of society to their continued advantage. It is class struggle. The only solution is to struggle back.
- seti0Cha 4y ago
  I think you have the causality backwards. A person is able to demand higher pay not because they are in charge, but because the owners/upper management want them to be in charge. That is, they get hired with high pay because that's the value the employer puts on their labor. They determine that the same way the determine what they're willing to pay for other goods and services: how much do they want it, and how easy it is to get.
  - topaz0 4y ago
    I don't know what point you are trying to make. You are describing some of the ways that people higher up the hierarchy have more power to demand higher wages. That's what I was talking about.
    - seti0Cha 4y ago
      Ok, let me say it a different way. They don't have the power to demand more than they are worth, because the amount the employer offers reflects what the employer thinks they are worth. You may disagree about how much value they supply, but that's not really relevant. Wages aren't set by what some 3rd party thinks is fair, they're set like other prices - how much the employee's skills are needed and the available supply of people with those skills. Hierarchy is only incidentally involved, and not always. Consider, for example, the wages of actors or professional athletes for example.
  - danielscrubs 4y ago
    In my experience it’s not about labor at all. It’s very far from wanting to put the best high up and more about which social circles you get access to. It’s always a struggle between what’s best for the company and what is best for the individual board members/ceo and there is way to few real active investors for the best of the company to take priority usually.
strawpeople 4y ago
There is no evidence that management problems are harder to solve than coding problems. Not only that, but when coders make mistakes the impact can be large and the responsibility clearly falls on the coder, whereas when managers make mistakes, the responsibility is diffused to their subordinates. Managers should either be paid a lot less, or be fireable by their reports when they make mistakes.
- kortilla 4y ago
  It has nothing to do with difficulty. It’s not a leveling up game of leetcode. > whereas when managers make mistakes, the responsibility is diffused to their subordinates. No it’s not. They will roast their subordinates but unless the org is completely dysfunctional they are responsible for the ultimate deliverables. The higher up you move, the more responsible for outcomes that are less and less in your control. You even gain legal liability as you enter the “officer of the company” levels.
  - strawpeople 4y ago
    > It has nothing to do with difficulty. It’s not a leveling up game of leetcode. Then you should reply to the parent comment and not mine. > No it’s not. They will roast their subordinates but unless the org is completely dysfunctional they are responsible for the ultimate deliverables. Please. If you’ve never seen incompetent managers bumbling along making their staff into scapegoats, etc., then you don’t have a lot of experience. Nothing changes at the higher levels either. Projects are cancelled and teams fired etc, not the executive in charge. The time execs get fired is when they do deliver and there is some kind of liability.
    - kortilla 4y ago
      I guess I’ve been mainly working at successful companies? The biggest company I worked at was Google 7+ years ago and managers that couldn’t deliver and blamed employees would get exited or demoted quite quickly. It’s been even more aggressive in the startups I’ve been at since.
  - 4y ago
Veen 4y ago
But then you jump up another level, where someone is making a hundred thousand or a million times what the burger flipper makes. Are they generating enough value to warrant that? Elon Musk's current net worth is roughly what 100,000 burger flippers will make in their whole lives. Is it plausible that he generates some multiple of that value, or is he just much better at capturing value than the burger flipper?
- ejb999 4y ago
  Given the things he has managed to bring to market, and the impact he is having on the world - I would say yes. People can get really lucky once, but Musk has an overall track record that can't be attributed to just getting lucky or being in the right place at the right time; I can't think of anyone else - except perhaps Steve Jobs, who managed to go from one huge idea to another and execute well more often than not, at several companies and industries.
pydry 4y ago
Were what you said even remotely true than a really bad department manager and CTO would stand to lose 100x/1000x what a burger flipper makes when they fuck up and make things worse. The force multiplier works in both directions. More realistically, the pay is about control and class. An incompetent CTO who always makss everything worse is just not in the same social class as a programmer, let alone a burger flipper, and will typically still earn 100x as much while making everything 100x worse. ^ I've worked with one of them.
geodel 4y ago
Good point. Usually sentiment here is equality should be about pay of engineer and higher ups. Anyone lower than engineer deserve what they get due to market forces. They can always up-skill themselves to become engineers.
eevilspock 4y ago
Let's pretend for a moment that your ratios were true (i.e. that we actually have an efficient labor market), it has nothing to do with what anyone deserves, nothing to do with their worth. Do not conflate an economic system chosen for its ability to allocate resources efficiently (whether it does is another question) with a moral value system that assigns value to individual humans or what share of resources or power they deserve.
ajross 4y ago
> But their work is 1000 times more important, so it's worth 1000 times more. This too is misunderstanding the value equation. The cost of replacement has to be part of this too. Engineering salaries are bid up in the market relative to other professions not because their work is more "important" than teaching or administration or whatever, but because engineers are hard to hire. Literally every software group, even now, has open spots where they'd like to put someone. There are never enough people. And... is that true at the top of the hierarchy? Have you ever even heard of a company with a VP req sitting open for months for lack of candidates? That just doesn't happen. Senior positions seem to be drowning in competition[1]. And yet, their salaries aren't showing the result of that competition between candidates. Boards aren't going out to find a "better deal" on their CEO. Maybe they should, but they don't. And I think it's worth asking why that is. [1] In fact I think with the exception of a very small list of genuine innovators, even tech CEOs are mostly just replacement level players shepherding already-tuned organizations. You could dump Jassy or Nadella out on the street tomorrow and Amazon and Microsoft would be just fine with whoever stepped in.
manuelabeledo 4y ago
> Their department manager makes 10 times as much because they solve problems impacting entire teams of engineers that are more important and more difficult than coding problems. This is very rarely true.

topaz0 4y ago

This is not 100% wrong, but you are missing an important part of the calculus, which is that as you go up the hierarchy you have more overall and more concentrated power to demand higher pay, out of proportion to the value of your labor.

pdonis 4y ago
> higher pay, out of proportion to the value of your labor To the extent this is a problem, it's a problem of corporate governance. Unfortunately, I'm not sure that problem is fixable, since its root cause is a shift in corporate ownership from individual stockholders to mutual funds (because mutual funds is how most people now invest their retirement savings in 401ks or the equivalent). The effect of this on individual corporations is to make their time horizon for stock price growth much shorter, because unlike individual retirement investors, most of whom adopt a buy and hold strategy and don't trade very often, mutual funds trade stocks all the time based on short term performance.
- topaz0 4y ago
  Somehow that wasn't always the case in the past, so presumably it's also possible for things to be different in the future. If we have the audacity to imagine a different world, it is fixable through organizing and demanding that incentives be aligned with our values rather than with the spiraling fortunes of a handful of extremely self-centered people.
  - pdonis 4y ago
    > that wasn't always the case in the past Yes, that's correct. The movement of stock ownership to mutual funds largely took place in the few decades after WW II. > presumably it's also possible for things to be different in the future Yes, but the changes that would have to take place are quite drastic. I don't think disallowing mutual funds is an option. But the only other mechanism of control (aside from market forces--see below) would be to drastically change the regulations concerning corporate governance, and it's not even clear that that would do more than exchange one problem for another, since regulatory capture is a thing. The only other way to change the incentives facing corporate governance structures is to change the market, either on the producer side or the consumer side. On the consumer side, consumers would have to stop buying goods and services from companies that overpay their CEOs and underpay their workers. Unfortunately that would mean consumers choosing to take a huge economic hit, since those same companies provide huge economic value to consumers. (And in some cases, such as Google and Facebook, consumers don't even have the option of not paying, since the services are free; they would have to stop using the services altogether even though they're free, which is probably even harder to make happen than getting consumers to stop paying for something.) On the producer side, new companies that are structured differently in terms of governance (for example as worker cooperatives) would need to enter the market and out-compete the existing companies. Sooner or later that might well happen, but it could be quite a long time.
    - topaz0 4y ago
      I didn't say it would be easy. What I said is that the potential for change is rooted in organizing and class struggle. > regulatory capture Regulatory capture just is the capitalist class organizing to shape the structures of society to their continued advantage. It is class struggle. The only solution is to struggle back.
seti0Cha 4y ago
I think you have the causality backwards. A person is able to demand higher pay not because they are in charge, but because the owners/upper management want them to be in charge. That is, they get hired with high pay because that's the value the employer puts on their labor. They determine that the same way the determine what they're willing to pay for other goods and services: how much do they want it, and how easy it is to get.
- topaz0 4y ago
  I don't know what point you are trying to make. You are describing some of the ways that people higher up the hierarchy have more power to demand higher wages. That's what I was talking about.
  - seti0Cha 4y ago
    Ok, let me say it a different way. They don't have the power to demand more than they are worth, because the amount the employer offers reflects what the employer thinks they are worth. You may disagree about how much value they supply, but that's not really relevant. Wages aren't set by what some 3rd party thinks is fair, they're set like other prices - how much the employee's skills are needed and the available supply of people with those skills. Hierarchy is only incidentally involved, and not always. Consider, for example, the wages of actors or professional athletes for example.
- danielscrubs 4y ago
  In my experience it’s not about labor at all. It’s very far from wanting to put the best high up and more about which social circles you get access to. It’s always a struggle between what’s best for the company and what is best for the individual board members/ceo and there is way to few real active investors for the best of the company to take priority usually.

strawpeople 4y ago

There is no evidence that management problems are harder to solve than coding problems. Not only that, but when coders make mistakes the impact can be large and the responsibility clearly falls on the coder, whereas when managers make mistakes, the responsibility is diffused to their subordinates. Managers should either be paid a lot less, or be fireable by their reports when they make mistakes.

kortilla 4y ago
It has nothing to do with difficulty. It’s not a leveling up game of leetcode. > whereas when managers make mistakes, the responsibility is diffused to their subordinates. No it’s not. They will roast their subordinates but unless the org is completely dysfunctional they are responsible for the ultimate deliverables. The higher up you move, the more responsible for outcomes that are less and less in your control. You even gain legal liability as you enter the “officer of the company” levels.
- strawpeople 4y ago
  > It has nothing to do with difficulty. It’s not a leveling up game of leetcode. Then you should reply to the parent comment and not mine. > No it’s not. They will roast their subordinates but unless the org is completely dysfunctional they are responsible for the ultimate deliverables. Please. If you’ve never seen incompetent managers bumbling along making their staff into scapegoats, etc., then you don’t have a lot of experience. Nothing changes at the higher levels either. Projects are cancelled and teams fired etc, not the executive in charge. The time execs get fired is when they do deliver and there is some kind of liability.
  - kortilla 4y ago
    I guess I’ve been mainly working at successful companies? The biggest company I worked at was Google 7+ years ago and managers that couldn’t deliver and blamed employees would get exited or demoted quite quickly. It’s been even more aggressive in the startups I’ve been at since.
- 4y ago

Veen 4y ago

But then you jump up another level, where someone is making a hundred thousand or a million times what the burger flipper makes. Are they generating enough value to warrant that? Elon Musk's current net worth is roughly what 100,000 burger flippers will make in their whole lives. Is it plausible that he generates some multiple of that value, or is he just much better at capturing value than the burger flipper?

ejb999 4y ago
Given the things he has managed to bring to market, and the impact he is having on the world - I would say yes. People can get really lucky once, but Musk has an overall track record that can't be attributed to just getting lucky or being in the right place at the right time; I can't think of anyone else - except perhaps Steve Jobs, who managed to go from one huge idea to another and execute well more often than not, at several companies and industries.

pydry 4y ago

Were what you said even remotely true than a really bad department manager and CTO would stand to lose 100x/1000x what a burger flipper makes when they fuck up and make things worse. The force multiplier works in both directions. More realistically, the pay is about control and class. An incompetent CTO who always makss everything worse is just not in the same social class as a programmer, let alone a burger flipper, and will typically still earn 100x as much while making everything 100x worse. ^ I've worked with one of them.

geodel 4y ago

Good point. Usually sentiment here is equality should be about pay of engineer and higher ups. Anyone lower than engineer deserve what they get due to market forces. They can always up-skill themselves to become engineers.

eevilspock 4y ago

Let's pretend for a moment that your ratios were true (i.e. that we actually have an efficient labor market), it has nothing to do with what anyone deserves, nothing to do with their worth. Do not conflate an economic system chosen for its ability to allocate resources efficiently (whether it does is another question) with a moral value system that assigns value to individual humans or what share of resources or power they deserve.

ajross 4y ago

> But their work is 1000 times more important, so it's worth 1000 times more. This too is misunderstanding the value equation. The cost of replacement has to be part of this too. Engineering salaries are bid up in the market relative to other professions not because their work is more "important" than teaching or administration or whatever, but because engineers are hard to hire. Literally every software group, even now, has open spots where they'd like to put someone. There are never enough people. And... is that true at the top of the hierarchy? Have you ever even heard of a company with a VP req sitting open for months for lack of candidates? That just doesn't happen. Senior positions seem to be drowning in competition[1]. And yet, their salaries aren't showing the result of that competition between candidates. Boards aren't going out to find a "better deal" on their CEO. Maybe they should, but they don't. And I think it's worth asking why that is. [1] In fact I think with the exception of a very small list of genuine innovators, even tech CEOs are mostly just replacement level players shepherding already-tuned organizations. You could dump Jassy or Nadella out on the street tomorrow and Amazon and Microsoft would be just fine with whoever stepped in.

manuelabeledo 4y ago

> Their department manager makes 10 times as much because they solve problems impacting entire teams of engineers that are more important and more difficult than coding problems. This is very rarely true.