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How employment markets work, and fairness, are not the same thing. It's not a misconception, it's a criticism. And of course in the real world, wages are not b

How employment markets work, and fairness, are not the same thing. It's not a misconception, it's a criticism. And of course in the real world, wages are not based on supply and demand. They're based on leverage and BATNA. Simply put, given two equal employees (hypothetically, if it were possible to measure this), it's not "fair" to give one $50k and one $300k. It's not about the prevailing wage, it's about the contribution relative to what is coming back.

tptacek 13y ago
No, the argument you're making is irrational. You're a $100k/yr FTE dev. A VP above you makes $200k/yr. You believe that VP should be making $50k/yr. But your position isn't improved at all if they do. You're still making $100k/yr, and someone else is taking the $150k/yr premium. So you say, "no, I should get a share of that $150k/yr premium." Well, OK, why aren't you? What you're saying is that you're worth more than $100k/yr. You already have a way of demonstrating that: demand a raise, then start interviewing. The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too. What other people in your firm make is an orthogonal concern to what you make. Clinging to the belief that pay equity is an important part of your compensation is as likely to harm you as help you; stipulating that we are all especially high-functioning professionals, the notion of pay equity is part of what puts a ceiling on what you earn now.
- Anderkent 13y ago
  > The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too. The difference is in one scenario you're talking about a company that can pay out 300k a year, and in the other it's only 150k. Fairness is not about absolute numbers, but relative numbers in proportion to the total available.
  - tptacek 13y ago
    Are you doing work worth 250k a year? Why are you accepting 100k for it? Do you think every dollar generated by a company is allocated to salary? That's a company with a 0% (or worse) margin.
- infinity0 13y ago
  This is the most anti-rational anti-worker worthless "explanation" I have ever heard. What other people make is definitely not an orthogonal concern, and is hugely relevant. Your justification of not caring about other people earning more is incredibly short-sighted. Yes, it does improve my position if other people earn less, because that money is then available for the company to use on other things, such as paying me. Furthermore, to suggest that this is "irrational" is offensive and irrational in itself, and would not be inconsistent with psychological propaganda.
  - tptacek 13y ago
    How are you better off if an overpaid VP is laid off and replaced with a cheaper VC? Try to be specific. The word "irrational" doesn't mean "idiotic", by the way.
    - ricardobeat 13y ago
      The company has an extra $150k to spend on everyone else, R&D or sales, or distribute as profit. I think it's a net positive (for the employee, company and/or society).
      - tptacek 13y ago
        Before the VP got his pay cut, you made $100k. After the VP got his pay cut, you made $100k. Explain to me how this is a rational thing, in the economic sense of "rational", for you to care about.
        lawnchair_larry 13y ago
        > Explain to me how this is a rational thing, in the economic sense of "rational" Ah, I think this explains the disagreement. That kind of "rational" has nothing to do with fairness, and everything to do with maximizing individual payoff. I think you've conflated the two, when they're almost completely incompatible. I knew you were a closet republican ;)
- rdl 13y ago
  Equity grants are somewhat more rival than cash salary, though. If a company has 5% to give to employees in a certain year, VPs getting 1% does increase the odds an engineer will get 0.03% instead of 0.1%.
- lawnchair_larry 13y ago
  There is nothing irrational about equitable pay, unless you're the check-writer trying to depress wages and pay everyone the minimum that you can get away with. This is, of course, why salaries are secret. For what it's worth, I have made substantially more than my coworkers in almost all of my jobs (based on what I could infer from watercooler talk after being around a while), and I don't think that's fair either. I actually chewed out one of my managers once when I found out a coworker was making half of what I was. Why wasn't he paying him more? Because he could get away with it, not because it was fair. He was a hard worker, very smart, but rather timid. Put this guy against the alpha male manager, and unless the manager wants to be charitable, that guy is not getting a dime more than the manager can bully him into taking. What's worse, the guy will probably come out thinking he got a good deal.
  - tptacek 13y ago
    I don't think you addressed my point. How are you better off if a 200k/yr VP is replaced with a 50k/yr VP, and whatever benefit you get from that transition, why should it depend on what some other person makes? If you did work worth 150k/yr, you should be making 150k/yr regardless.

tptacek 13y ago

No, the argument you're making is irrational. You're a $100k/yr FTE dev. A VP above you makes $200k/yr. You believe that VP should be making $50k/yr. But your position isn't improved at all if they do. You're still making $100k/yr, and someone else is taking the $150k/yr premium. So you say, "no, I should get a share of that $150k/yr premium." Well, OK, why aren't you? What you're saying is that you're worth more than $100k/yr. You already have a way of demonstrating that: demand a raise, then start interviewing. The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too. What other people in your firm make is an orthogonal concern to what you make. Clinging to the belief that pay equity is an important part of your compensation is as likely to harm you as help you; stipulating that we are all especially high-functioning professionals, the notion of pay equity is part of what puts a ceiling on what you earn now.

Anderkent 13y ago
> The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too. The difference is in one scenario you're talking about a company that can pay out 300k a year, and in the other it's only 150k. Fairness is not about absolute numbers, but relative numbers in proportion to the total available.
- tptacek 13y ago
  Are you doing work worth 250k a year? Why are you accepting 100k for it? Do you think every dollar generated by a company is allocated to salary? That's a company with a 0% (or worse) margin.
infinity0 13y ago
This is the most anti-rational anti-worker worthless "explanation" I have ever heard. What other people make is definitely not an orthogonal concern, and is hugely relevant. Your justification of not caring about other people earning more is incredibly short-sighted. Yes, it does improve my position if other people earn less, because that money is then available for the company to use on other things, such as paying me. Furthermore, to suggest that this is "irrational" is offensive and irrational in itself, and would not be inconsistent with psychological propaganda.
- tptacek 13y ago
  How are you better off if an overpaid VP is laid off and replaced with a cheaper VC? Try to be specific. The word "irrational" doesn't mean "idiotic", by the way.
  - ricardobeat 13y ago
    The company has an extra $150k to spend on everyone else, R&D or sales, or distribute as profit. I think it's a net positive (for the employee, company and/or society).
    - tptacek 13y ago
      Before the VP got his pay cut, you made $100k. After the VP got his pay cut, you made $100k. Explain to me how this is a rational thing, in the economic sense of "rational", for you to care about.
      - lawnchair_larry 13y ago
        > Explain to me how this is a rational thing, in the economic sense of "rational" Ah, I think this explains the disagreement. That kind of "rational" has nothing to do with fairness, and everything to do with maximizing individual payoff. I think you've conflated the two, when they're almost completely incompatible. I knew you were a closet republican ;)
rdl 13y ago
Equity grants are somewhat more rival than cash salary, though. If a company has 5% to give to employees in a certain year, VPs getting 1% does increase the odds an engineer will get 0.03% instead of 0.1%.
lawnchair_larry 13y ago
There is nothing irrational about equitable pay, unless you're the check-writer trying to depress wages and pay everyone the minimum that you can get away with. This is, of course, why salaries are secret. For what it's worth, I have made substantially more than my coworkers in almost all of my jobs (based on what I could infer from watercooler talk after being around a while), and I don't think that's fair either. I actually chewed out one of my managers once when I found out a coworker was making half of what I was. Why wasn't he paying him more? Because he could get away with it, not because it was fair. He was a hard worker, very smart, but rather timid. Put this guy against the alpha male manager, and unless the manager wants to be charitable, that guy is not getting a dime more than the manager can bully him into taking. What's worse, the guy will probably come out thinking he got a good deal.
- tptacek 13y ago
  I don't think you addressed my point. How are you better off if a 200k/yr VP is replaced with a 50k/yr VP, and whatever benefit you get from that transition, why should it depend on what some other person makes? If you did work worth 150k/yr, you should be making 150k/yr regardless.