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This is absolutely not how wages are set anywhere and certainly not in tech. Workers are paid according to the prevailing wages and what they’ll accept, not acc

This is absolutely not how wages are set anywhere and certainly not in tech. Workers are paid according to the prevailing wages and what they’ll accept, not according to the value they generate for the firm.

yieldcrv 2y ago
and yet, they could, no matter what happens in other industries
- hmmokidk 2y ago
  if they were paid for exactly the value they produced the firm would not profit as all the profit would be paid out to those generating it
  - yieldcrv 2y ago
    oh okay, if anyone anywhere suggested otherwise in this thread I'll let them know
  - pests 2y ago
    > the firm would not profit as all the profit would be paid out to those generating it Then what is the firm doing at this point?
    - deathanatos 2y ago
      In theory, it could re-invest those profits into the company, in hopes of further gains down the road. (But like all things, there's a healthy balance.) In practice, I think the answer is "executive bonuses" and [short-term] "stock buybacks". (But morally I agree; there is no reason every company has to be Scrooge, and I think it's to their long-term unprofitability to be so, by effectively ensuring a lack of experience & growth within the employees generating the value in the first place.)
BurningFrog 2y ago
How much value a worker generates is of course much harder to quantify in tech, vs a finance trader, but the market forces will produce a rough equivalent result over time. But to get back to the topic, tech wages are definitely not set by comparing with finance wages!
- adrianN 2y ago
  Markets are not guaranteed to convergence faster than surrounding conditions change.
  - freen 2y ago
    Markets are not guaranteed to converge. “The market can stay irrational for longer than you can stay solvent” There are price makers and price takers. Guess which side labor is on?
- roughly 2y ago
  > the market forces will produce a rough equivalent result over time. No, they absolutely will not. Absolutely not. The entire history of the labor movement and of labor law is testament to this. We’ve tried this, repeatedly, in the real world, and labor gets fucked every single time. Employers do not pay according to the value generated by the employee, they pay the minimum they need to get an employee. Get this model out of your head, it is wrong.
  - ethbr1 2y ago
    There's probably a case for Henry Ford, if the parable about paying above-market wages is true. But certainly not since then. And even he probably paid the minimum overage he could. It's the nature of business.
    - roughly 2y ago
      Every once in a while someone recognizes that paying good workers good wages works out well for the business, but that never makes it back into the textbooks somehow.
jknoepfler 2y ago
Having had real conversations with company leadership about "the board being concerned about engineer salaries being above industry norms" despite "having the highest revenue per engineer in their portfolio" I can... anecdotally confirm.
- dijit 2y ago
  I'm here to second this. I've been in the board room when discussing salaries and told that we need to offer the lowest that the candidate will accept - "it's just good business". I was arguing against that mentality as responsibilities and retention are a more important metric to my mind when thinking about compensation. But even there, I'm part of the problem as I would set my "retention" target to some measure above industry standard: where-by I am still thinking in industry standard terms. (as per this thread)

yieldcrv 2y ago

and yet, they could, no matter what happens in other industries

hmmokidk 2y ago
if they were paid for exactly the value they produced the firm would not profit as all the profit would be paid out to those generating it
- yieldcrv 2y ago
  oh okay, if anyone anywhere suggested otherwise in this thread I'll let them know
- pests 2y ago
  > the firm would not profit as all the profit would be paid out to those generating it Then what is the firm doing at this point?
  - deathanatos 2y ago
    In theory, it could re-invest those profits into the company, in hopes of further gains down the road. (But like all things, there's a healthy balance.) In practice, I think the answer is "executive bonuses" and [short-term] "stock buybacks". (But morally I agree; there is no reason every company has to be Scrooge, and I think it's to their long-term unprofitability to be so, by effectively ensuring a lack of experience & growth within the employees generating the value in the first place.)

BurningFrog 2y ago

How much value a worker generates is of course much harder to quantify in tech, vs a finance trader, but the market forces will produce a rough equivalent result over time. But to get back to the topic, tech wages are definitely not set by comparing with finance wages!

adrianN 2y ago
Markets are not guaranteed to convergence faster than surrounding conditions change.
- freen 2y ago
  Markets are not guaranteed to converge. “The market can stay irrational for longer than you can stay solvent” There are price makers and price takers. Guess which side labor is on?
roughly 2y ago
> the market forces will produce a rough equivalent result over time. No, they absolutely will not. Absolutely not. The entire history of the labor movement and of labor law is testament to this. We’ve tried this, repeatedly, in the real world, and labor gets fucked every single time. Employers do not pay according to the value generated by the employee, they pay the minimum they need to get an employee. Get this model out of your head, it is wrong.
- ethbr1 2y ago
  There's probably a case for Henry Ford, if the parable about paying above-market wages is true. But certainly not since then. And even he probably paid the minimum overage he could. It's the nature of business.
  - roughly 2y ago
    Every once in a while someone recognizes that paying good workers good wages works out well for the business, but that never makes it back into the textbooks somehow.

jknoepfler 2y ago

Having had real conversations with company leadership about "the board being concerned about engineer salaries being above industry norms" despite "having the highest revenue per engineer in their portfolio" I can... anecdotally confirm.

dijit 2y ago
I'm here to second this. I've been in the board room when discussing salaries and told that we need to offer the lowest that the candidate will accept - "it's just good business". I was arguing against that mentality as responsibilities and retention are a more important metric to my mind when thinking about compensation. But even there, I'm part of the problem as I would set my "retention" target to some measure above industry standard: where-by I am still thinking in industry standard terms. (as per this thread)