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Hi, former employer here who valued employees over profitability. It's true for all employers. Your job as a business owner is not to provide jobs to your empl

by hnbad 2y ago

Hi, former employer here who valued employees over profitability. It's true for all employers. Your job as a business owner is not to provide jobs to your employees, it's to keep the business afloat and maintain your income. There are limits to how much of a good person you can be, those limits are set by the economic system we exist in. Ignoring these limits will cause your business to fail. It's a sad view and it's not entirely accurate but it has better predictive power than the rose-tinted glasses you and possibly your employer may be wearing. Profitability is the baseline requirement, all else comes after. That's how a market economy works. If you remain at a stable net-zero that's great as long as nothing ever changes but it means you're extremely vulnerable to any disruption. To be clear: I'm not even talking about shareholders. This is true for private businesses too, maybe even more so. Profit means reserves, reserves mean being able to survive dips and downturns. But when the market changes you need to adjust and adjustment means the value of an employee can change drastically and it may be better to replace someone who was a great fit for the old market with someone who's a better fit for the new market. Sentimentality is a competitive disadvantage. You can balk at the morality and decency of this and I'd agree with you but you shouldn't be upset about the persons, you should be upset about the system that is requiring those persons to act this way in order to stay afloat.

palata 2y ago
This. I don't mean it as a criticism towards the employer: if they ignored profit and favoured the employees they would go out of business and eventually that would be bad for the employees as well. It's just how it is: your employer is not your friend. It's a contract.
- renegat0x0 2y ago
  Ludwig von Mises "In the market economy the worker sells his services as other people sell their commodities. The employer is not the employee’s lord. He is simply the buyer of services which he must purchase at their market price."
  - js8 2y ago
    Sorry, but that's not how the real world works, Mises is a fantasy for kids. That works for maybe contractors, and even that is muddy in cases like Uber etc. But for employees, they sell labor, not services. Likewise, when someone owns a factory, they don't just own the physical tools and material inputs of production (which they would rent to workers), but they own (control) the whole social structure that is needed to produce, all the human relationships (workers - management - owners - customers) required for the factory to work. That was Marx's main point, and that's why sane countries have labor laws that regulate this relationship. (But even if everybody was truly selling a service, "free market" would quickly collapse into oligopolies, as it usually does.)
    - hnbad 2y ago
      > they don't just own the physical tools and material inputs of production (which they would rent to workers), but they own (control) the whole social structure that is needed to produce Ayup. That's why when you run a small business an early lesson is that your competitive advantage isn't your intellectual property (because any larger company can come along and find a way to copy that legally) but your business relations and reputation.
  - hnbad 2y ago
    Well, there's a good reason the Mises Institute is a right-wing libertarian think tank that is very blunt about wanting to abolish social welfare and workers' rights. This quote completely ignores real-world power dynamics and distribution of resources. The employer has capital, the employee does not. The employer can be a Fortune 500 or a mom and pop shop. Even the most highly paid employee can not exert as much political or economical power as Jeff Bezos. At a certain point wealth stops being about what you can buy and starts becoming about what decisions you can influence. This is the reason unions exist. A Fortune 500 company's board members already engage in collective bargaining. It's only fair for its employees to do the same. And this works at almost any scale, even if at the mom and pop shop the employees may not need to formally unionize because there's few enough of them that they can organize directly.
vladsiv 2y ago
> There are limits to how much of a good person you can be, those limits are set by the economic system we exist in. > you should be upset about the system that is requiring those persons to act this way in order to stay afloat. How would you change the system or modify the current situation in order to define new limits that are more, let's say, humane? In the article, there is an example of an ex-Google employee that got fired via email, he couldn't say "Bye" to his colleagues after 20 years of working with them. That doesn't seem like a system with reasonable limits.
- cjfd 2y ago
  "How would you change the system" is an above human level question. Winston Churchill said that democracy is the worst form of Government except for all those other forms that have been tried from time to time. The same for capitalism. It is an illusion that it is easy to change a system in which millions of people participate. The economic forces as painted here are very real but cruelty is optional. It is not very expensive to give an employee the time to say goodbye to colleagues.
  - hnbad 2y ago
    > Winston Churchill said that democracy is the worst form of Government except for all those other forms that have been tried from time to time. Sure but he had a good reason to conflate all forms of democracy as if there were no difference between them or ways to give more power to the people in, say, UK's form of democracy. Replacing first-past-the-post voting for example wouldn't require abandoning the entire system of government. > The same for capitalism. Sure but again there are important differences between laissez faire capitalism and a social market economy and yet this is used to justify reforming the latter into closer and closer approximations of the former. This also ignores that while the economy at large is clearly some form of "capitalism", communities otherwise operate on more non-capitalist patterns of behavior (e.g. buying rounds at the bar among friends, borrowing tools to your neighbors, BYOBs/potlucks). Even interactions involving currency (remember markets and currency alone don't define capitalism) don't have to be transactional or profit optimized or be defined in terms of ownership and servitude. Of course things like the gig economy, consumerism and "hustle culture" are built around "capitalism"-ifying those non-capitalist interactions by reframing them as transactional or business opportunities - the most blatant example probably being the widely ridiculed genre of blog post a la "what breaking up with my partner taught me about being a hiring manager".
lazide 2y ago
Also - every system that has ever existed has had some variant of this. Output and effectiveness towards market needs has to matter or eventually the system collapses under its own weight. Churn has to happen, or ‘deadwood’ builds up through inertia. And when the system collapses, it’s like a forest fire with a massive amount of dead wood - it burns everything to the ground, not to grow again for a generation. As compared to periodic wildfires that may suck, but for which sprouts pop back up again in the spring.
- TheOtherHobbes 2y ago
  That depends on who gets to define "market needs" and how. Currently "the market" is literally just a betting shop for shareholders, which seems an odd way to be making important strategic decisions.
  - lazide 2y ago
    The market as in who needs things, and is willing/able to pay for them, and who provides things and is willing/able to sell them. I’m not talking about the stock market (which is built on top), I’m talking the actual economy. Of course, command economies exist (and may again), and those tend to shortcut many of the niceties eh?
    - disgruntledphd2 2y ago
      > Of course, command economies exist (and may again), and those tend to shortcut many of the niceties eh? Command economies like corporations?
      - lazide 2y ago
        Internally a corporation is a command economy, externally it isn’t of course. Other command economy examples - gov’t, the USSR, the US during wartime, Russia right now, etc. Aka when someone in a position of authority says ‘money gets spent here and this way’, regardless of any natural market tendencies (and sometimes with little regard to solvency or pesky things like quality of life).
jessekv 2y ago
It is also very demoralising for everyone if the company does not retrain or remove people from roles in which they are chronically underperforming.
surgical_fire 2y ago
> Your job as a business owner is not to provide jobs to your employees, it's to keep the business afloat and maintain your income. Employee here. There's nothing wrong with that. In fact, I think it is healthy for both the employer and the employee to recognize this as a base of a good professional relationship.
kortilla 2y ago
> You can balk at the morality and decency of this and I'd agree with you Why would you agree? A business is people voluntarily getting together trying to make money. If it fails to do so, why should other people have to step in and pay?
- TheOtherHobbes 2y ago
  The only reason that's how "business" is defined is centuries of imperial colonialism, much of it shaped by aristocratic patronage of the slave trade. Sooner or later we're going to have to take a look at that definition because the evidence strongly suggests it's doing more harm than good. There have been other more humane models, even in corporate America.
  - throwaway7ahgb 2y ago
    What are these humane models? My understanding is that there are a lot of very similar economic systems. There are pros and cons to each of these systems. I don't believe one system or government as truly figured it out. Folks on HN and reddit like to use other systems as a better system, but they always have some subjective negatives that are pushed aside.
igleria 2y ago
> former employer Interested in your opinion about the following: Should employees get their salaries adjusted by inflation once per year?
- throwaway7ahgb 2y ago
  Should employees get their salaries adjusted by inflation once per year? Why yearly, not monthly? Also what if there is deflation, do people get pay cuts? A lot of these issues are very easy to criticize on the surface, I don't think many here have ever tried to employee people and work on profit margins.
  - igleria 2y ago
    > Why yearly, not monthly? can be monthly, should be put in a contract. > Also what if there is deflation, do people get pay cuts? Yes, put it written form in a contract too. What I suggest (employer and employee explicitly negotiating inflation/deflation terms) could be better than the standard song and dance we all are used to suffer.
vaidhy 2y ago
I think you are missing the metapoint (maybe purposefully). In the US, even very profitable companies are laying off tons of workers to boost share price and executive compensation. The only reasons I can think of are: 1. They expect the company to be not profitable in near future and they are taking advance steps. 2. They think the workers add nothing to the top line or bottom line and cannot think of anything else that would gainfully make use of their talents. 3. They think the market would like it if they lay people off and hence it is in their selfish motive to keep laying people off. 1 requires a crystal ball and 2 is just incompetence. 3 seems the most likely answer for these layoffs. If you were running a company at a loss to pay people, you are not running a business, you are a charity. At the same time, if your profitable company wants to move the payoff from labor to shareholders in increasing percentages, your company is detrimental to the society.
jdbernard 2y ago
Sounds like a skill issue. Joking aside I know, personally, business owners who have consistently acted with integrity and managed to maintain a successful, profitable business over the course of 30+ years, adjacent to the real estate market, surviving 2008, etc. so it's not like they've never faced had time or tough competitors. In that time they have never had layoffs. They've had to cut pay and reduce benefits in lean times, but providing gainful employment is a core value (above profit!!) and it has worked.

by hnbad 2y ago

palata 2y ago

This. I don't mean it as a criticism towards the employer: if they ignored profit and favoured the employees they would go out of business and eventually that would be bad for the employees as well. It's just how it is: your employer is not your friend. It's a contract.

renegat0x0 2y ago
Ludwig von Mises "In the market economy the worker sells his services as other people sell their commodities. The employer is not the employee’s lord. He is simply the buyer of services which he must purchase at their market price."
- js8 2y ago
  Sorry, but that's not how the real world works, Mises is a fantasy for kids. That works for maybe contractors, and even that is muddy in cases like Uber etc. But for employees, they sell labor, not services. Likewise, when someone owns a factory, they don't just own the physical tools and material inputs of production (which they would rent to workers), but they own (control) the whole social structure that is needed to produce, all the human relationships (workers - management - owners - customers) required for the factory to work. That was Marx's main point, and that's why sane countries have labor laws that regulate this relationship. (But even if everybody was truly selling a service, "free market" would quickly collapse into oligopolies, as it usually does.)
  - hnbad 2y ago
    > they don't just own the physical tools and material inputs of production (which they would rent to workers), but they own (control) the whole social structure that is needed to produce Ayup. That's why when you run a small business an early lesson is that your competitive advantage isn't your intellectual property (because any larger company can come along and find a way to copy that legally) but your business relations and reputation.
- hnbad 2y ago
  Well, there's a good reason the Mises Institute is a right-wing libertarian think tank that is very blunt about wanting to abolish social welfare and workers' rights. This quote completely ignores real-world power dynamics and distribution of resources. The employer has capital, the employee does not. The employer can be a Fortune 500 or a mom and pop shop. Even the most highly paid employee can not exert as much political or economical power as Jeff Bezos. At a certain point wealth stops being about what you can buy and starts becoming about what decisions you can influence. This is the reason unions exist. A Fortune 500 company's board members already engage in collective bargaining. It's only fair for its employees to do the same. And this works at almost any scale, even if at the mom and pop shop the employees may not need to formally unionize because there's few enough of them that they can organize directly.

vladsiv 2y ago

> There are limits to how much of a good person you can be, those limits are set by the economic system we exist in. > you should be upset about the system that is requiring those persons to act this way in order to stay afloat. How would you change the system or modify the current situation in order to define new limits that are more, let's say, humane? In the article, there is an example of an ex-Google employee that got fired via email, he couldn't say "Bye" to his colleagues after 20 years of working with them. That doesn't seem like a system with reasonable limits.

cjfd 2y ago
"How would you change the system" is an above human level question. Winston Churchill said that democracy is the worst form of Government except for all those other forms that have been tried from time to time. The same for capitalism. It is an illusion that it is easy to change a system in which millions of people participate. The economic forces as painted here are very real but cruelty is optional. It is not very expensive to give an employee the time to say goodbye to colleagues.
- hnbad 2y ago
  > Winston Churchill said that democracy is the worst form of Government except for all those other forms that have been tried from time to time. Sure but he had a good reason to conflate all forms of democracy as if there were no difference between them or ways to give more power to the people in, say, UK's form of democracy. Replacing first-past-the-post voting for example wouldn't require abandoning the entire system of government. > The same for capitalism. Sure but again there are important differences between laissez faire capitalism and a social market economy and yet this is used to justify reforming the latter into closer and closer approximations of the former. This also ignores that while the economy at large is clearly some form of "capitalism", communities otherwise operate on more non-capitalist patterns of behavior (e.g. buying rounds at the bar among friends, borrowing tools to your neighbors, BYOBs/potlucks). Even interactions involving currency (remember markets and currency alone don't define capitalism) don't have to be transactional or profit optimized or be defined in terms of ownership and servitude. Of course things like the gig economy, consumerism and "hustle culture" are built around "capitalism"-ifying those non-capitalist interactions by reframing them as transactional or business opportunities - the most blatant example probably being the widely ridiculed genre of blog post a la "what breaking up with my partner taught me about being a hiring manager".

lazide 2y ago

Also - every system that has ever existed has had some variant of this. Output and effectiveness towards market needs has to matter or eventually the system collapses under its own weight. Churn has to happen, or ‘deadwood’ builds up through inertia. And when the system collapses, it’s like a forest fire with a massive amount of dead wood - it burns everything to the ground, not to grow again for a generation. As compared to periodic wildfires that may suck, but for which sprouts pop back up again in the spring.

TheOtherHobbes 2y ago
That depends on who gets to define "market needs" and how. Currently "the market" is literally just a betting shop for shareholders, which seems an odd way to be making important strategic decisions.
- lazide 2y ago
  The market as in who needs things, and is willing/able to pay for them, and who provides things and is willing/able to sell them. I’m not talking about the stock market (which is built on top), I’m talking the actual economy. Of course, command economies exist (and may again), and those tend to shortcut many of the niceties eh?
  - disgruntledphd2 2y ago
    > Of course, command economies exist (and may again), and those tend to shortcut many of the niceties eh? Command economies like corporations?
    - lazide 2y ago
      Internally a corporation is a command economy, externally it isn’t of course. Other command economy examples - gov’t, the USSR, the US during wartime, Russia right now, etc. Aka when someone in a position of authority says ‘money gets spent here and this way’, regardless of any natural market tendencies (and sometimes with little regard to solvency or pesky things like quality of life).

jessekv 2y ago

It is also very demoralising for everyone if the company does not retrain or remove people from roles in which they are chronically underperforming.

surgical_fire 2y ago

> Your job as a business owner is not to provide jobs to your employees, it's to keep the business afloat and maintain your income. Employee here. There's nothing wrong with that. In fact, I think it is healthy for both the employer and the employee to recognize this as a base of a good professional relationship.

kortilla 2y ago

> You can balk at the morality and decency of this and I'd agree with you Why would you agree? A business is people voluntarily getting together trying to make money. If it fails to do so, why should other people have to step in and pay?

TheOtherHobbes 2y ago
The only reason that's how "business" is defined is centuries of imperial colonialism, much of it shaped by aristocratic patronage of the slave trade. Sooner or later we're going to have to take a look at that definition because the evidence strongly suggests it's doing more harm than good. There have been other more humane models, even in corporate America.
- throwaway7ahgb 2y ago
  What are these humane models? My understanding is that there are a lot of very similar economic systems. There are pros and cons to each of these systems. I don't believe one system or government as truly figured it out. Folks on HN and reddit like to use other systems as a better system, but they always have some subjective negatives that are pushed aside.

igleria 2y ago

> former employer Interested in your opinion about the following: Should employees get their salaries adjusted by inflation once per year?

throwaway7ahgb 2y ago
Should employees get their salaries adjusted by inflation once per year? Why yearly, not monthly? Also what if there is deflation, do people get pay cuts? A lot of these issues are very easy to criticize on the surface, I don't think many here have ever tried to employee people and work on profit margins.
- igleria 2y ago
  > Why yearly, not monthly? can be monthly, should be put in a contract. > Also what if there is deflation, do people get pay cuts? Yes, put it written form in a contract too. What I suggest (employer and employee explicitly negotiating inflation/deflation terms) could be better than the standard song and dance we all are used to suffer.

vaidhy 2y ago

I think you are missing the metapoint (maybe purposefully). In the US, even very profitable companies are laying off tons of workers to boost share price and executive compensation. The only reasons I can think of are: 1. They expect the company to be not profitable in near future and they are taking advance steps. 2. They think the workers add nothing to the top line or bottom line and cannot think of anything else that would gainfully make use of their talents. 3. They think the market would like it if they lay people off and hence it is in their selfish motive to keep laying people off. 1 requires a crystal ball and 2 is just incompetence. 3 seems the most likely answer for these layoffs. If you were running a company at a loss to pay people, you are not running a business, you are a charity. At the same time, if your profitable company wants to move the payoff from labor to shareholders in increasing percentages, your company is detrimental to the society.

jdbernard 2y ago

Sounds like a skill issue. Joking aside I know, personally, business owners who have consistently acted with integrity and managed to maintain a successful, profitable business over the course of 30+ years, adjacent to the real estate market, surviving 2008, etc. so it's not like they've never faced had time or tough competitors. In that time they have never had layoffs. They've had to cut pay and reduce benefits in lean times, but providing gainful employment is a core value (above profit!!) and it has worked.