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"Companies will not be allowed to prohibit their workers from telling others how much they are paid." Companies are not allowed to do that now. That's Federal labor law, and it's been prohibited since 1935.[1] This only applies to employees, not contractors. [1] https://www.dol.gov/wb/media/pay_secrecy.pdf
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So, this supply and demand thing. We keep hearing from large tech companies that there's a crisis -- a massive shortage of qualified software engineers, to such a degree that they won't be able to operate at all if they can't raise the H1-B quotas and import more people to fill all the jobs currently going unfilled. If that truly is the case, then supply and demand would tell us that currently engineers are underpaid…
A similar issue exists with respect to illegal immigration and low-pay, low-status jobs such as crop picking, meat-packing, and janitorial services: if there aren't enough Americans willing to do the job at prevailing wages, then aren't prevailing wages too low? Sure, my tomatoes would cost more and cleaning services might be 200% more expensive, but that's just the cost of doing business.
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Because you can achieve high proficiency rather quickly. Contrast this with engineers who optimize compliers who need much deeper and broader knowledge to make decisions in their day to day work, yet have the same comp. How is this fair? Again, it's a market and it is what it is.
I think there is a flaw in your logic here. You are saying "you can achieve high proficiency rather quickly", but at the same time you are saying that "it's market and it's what it is". Since it's a market - it means there is a high demand in those "JavaScript engineers", and if it's so easy to become proficient then what prevents those "engineers who optimize compilers" to become proficient in JavaScript and compete…
Because money is not the only motivator for someone to work. And besides that, from a macro perspective the "free market" is simplistic propaganda. I don't know why people keep bringing it up. Nothing in the real world works that way. Real world is messy, arbitrary, impractical and irrational decisions are made every single day by all human beings. Normal human beings don't sit down and try to "optimize" some cost function in their life/work.
I love the US and California, the tech scene is amazing and I was lucky to met such talented and friendly people in about every place I worked... from very large tech cos to "garage" startups. Which is why it pains me to see that so many engineers get stuck with such ridiculous salaries (relative to the value and wealth they provide and create). Problem is that some salaries are seemingly high compared to what the av…
I am a developer, so I am all for higher developer salaries, but your posts shows a common misunderstanding about economics. The value someone creates has nothing to do with their salary. Their salary is dictated by how many people need to hire developers and how many developers exist to fill those jobs or in simple terms, supply and demand. I might create millions of dollars in value with my code, but there might be…
And what you neglected to mention is that there is currently a massive developer shortage of supply, and lots of developers are being suckered into low salaries when they could be making much more somewhere else.
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In Silicon Valley it seems popular to just start your own company and capture the value that way, but other fields have solved this issue by unionizing.
Unions do not have a good history of preserving value, at least not in the USA.
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But they are exposed! In case of financial trouble (very common at startups), who gets to be laid off first, the CEO or the developer? Also, rank-and-file employees are typically scape-goated in legal proceedings, example: finance people going to jail for rogue/insider trading, even though upper management at least encouraged such behavior.
Every employment position comes with some degree of risk exposure. But, the risk of "I might lose my job" is quite a lot less scary than "I might lose all my invested capital and/or be stuck with crippling debts after the company crumbles". Early-stage startup employees are given greater compensation packages than later-stage employees specifically because of the greater risk of going to work for an early-stage start…
In cases where employee ends up dependent on their employer, knowledge and experience of their job market would have prevented them from falling into this "trap", and also help them to escape it.
Likewise, employers (the shrewd ones at least, which our contemporary world tends to worship for good or bad) often don't actually take on real risk. We have witnessed many cases where companies have capitalized on profits, but chosen to socialize losses, bankruptcy or even worse, internal misconduct. This is in addition to the veil which usually shelters real corporate decision makers from risk.
This is not to say that risk analysis does not matter, but to emphasize its inherent subjectivity, and that the perception of risk can be varied through greater knowledge of one's situation.
I love the US and California, the tech scene is amazing and I was lucky to met such talented and friendly people in about every place I worked... from very large tech cos to "garage" startups. Which is why it pains me to see that so many engineers get stuck with such ridiculous salaries (relative to the value and wealth they provide and create). Problem is that some salaries are seemingly high compared to what the av…
I am a developer, so I am all for higher developer salaries, but your posts shows a common misunderstanding about economics. The value someone creates has nothing to do with their salary. Their salary is dictated by how many people need to hire developers and how many developers exist to fill those jobs or in simple terms, supply and demand. I might create millions of dollars in value with my code, but there might be…
If there exist jobs that produce $1MM in value but that have a going rate of 200k, then there should be more of those jobs: either the company doing the work should expand, or it should have competitors. This will lead to increased competition to hire, which means higher wages. The increased number of jobs might generate downward pressure on the value produced by those jobs (since the output is now less scarce), and the increase in salary should increase the number of people who want to work in the field (which would dampen the salary increase), but we should ultimately reach some sort of equilibrium. The fact that tech companies bemoan how hard it is to find employees suggests that we aren't at this equilibrium.
To give an analogy, your explanation is akin to when people observe that the price of a good is based on the competitive market, and that the cost to produce merely provides (in most cases) a floor to that price. However, that's only part of the story: in a well functioning market large spreads between cost to produce and price encourages competitors to enter the space, which leads to lower prices. There may be delays, and there may be exceptions, but generally the function of competition is to reduce these spreads. Likewise, we should expect competition to reduce the spreads between job value and job salary, generally by increasing salaries and lowering values.
This is desperately needed in the UK, the recruiters (external) here won't even let you proceed if you don't reveal it.
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But they are exposed! In case of financial trouble (very common at startups), who gets to be laid off first, the CEO or the developer? Also, rank-and-file employees are typically scape-goated in legal proceedings, example: finance people going to jail for rogue/insider trading, even though upper management at least encouraged such behavior.
I hate to say this, but if you think getting laid off is a huge financial risk then you probably have not done much business. There are exceptions of course, but most founders I know carry huge financial risks (like years and years of salary on the down side, and tens of times that on the upside...). If you haven't tried you probably can't imagine how stressful it can be at times...
Also, early startup employees are persuaded to accept below-market salaries and work a lot of overtime, exactly like the founders, without the upside ( rarely more than 1% of the company).
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As a counterpoint: people don't create millions of dollars in value in a vacuum. Somebody (usually several somebodies) took the chance to create a support structure to enable said person to create the millions of dollars in value. How much of the value should go to the value creator and how much to the enabler with the capital (and the vision to use it in that way instead of spending it on something else) is a very i…
> Somebody (usually several somebodies) took the chance to create a support structure to enable said person to create the millions of dollars in value. A tech company contains a lot of structure, and very little of that is actually geared toward enabling anyone to create millions of dollars of value. A large portion of that structure exists to enable the management of a company to justify taking in large profits. It'…