Executives Play Down the Possibility of Raises • Hacker News Board

Re: Executives Play Down the Possibility of Raises

#41

Post by Tade0 » Wed, May 30, 2018, 4:03 PM UTC

ucaetano wrote: post #34

Tade0 wrote: post #32

Earlier quoted context omitted.

Which means it's essentially a free-for-all. If everybody is your enemy, then you still have enemies.

> Which means it's essentially a free-for-all. If everybody is your enemy, then you still have enemies. Being a free-for-all doesn't make it enemies, just a game. The two prisoners in the prisoner's dilemma aren't enemies. Employment is just another case of game theory. There are times when the best outcome for you is to collaborate with your employer, other times is to play against them. And so on. A reductive visio…

> Being a free-for-all doesn't make it enemies, just a game. The two prisoners in the prisoner's dilemma aren't enemies.

You're disregarding the fact that while the prisoner's dilemma is a non-zero sum game, employment in general is - any value added over your marginal usefulness is your loss and your employer's gain.

Some people even "solve" this problem by being minimally valuable.

Re: Executives Play Down the Possibility of Raises

#42

Post by eschevarria » Wed, May 30, 2018, 4:06 PM UTC

dnomad wrote: post #29

awinder wrote: post #18

Earlier quoted context omitted.

Is there any verifiable time in history when such a complicated multi-actor system actually did increase wages? Or is this the cold fusion of government policy?

No, not at all. There is no evidence that tax cuts lead to higher wages or economic growth. It's been studied and debunked to death but it never dies.

Deadweight losses from taxes have most certainly not been debunked.

Re: Executives Play Down the Possibility of Raises

#43

Post by eiji » Wed, May 30, 2018, 4:07 PM UTC

bcoates wrote: post #13

The idea that pay raises come from some sort of collective negotiation with a bunch of executives is just bizarre on its own. Executives do not get to decide the pay level of employees. The point of the tax law was to lower the cost of employment and investment in the US (specifically, the cost of repatriating foreign profits to pay US salaries and buy US-based infrastructure). The hope being that lower costs cause c…

>> A tight labor market causes the raises

Different economic theories can provide different explanations and the statement above is over-simplifying the situation (It should say 'can cause' raises). I'm not an economist. The labor theory of value (LTV) and other systems of thought would have a different take on this. Wages are not going up because various industries are bumping against hard systemic boundaries. I believe those are hard to see and not much appreciated or studied because they are not merely driven by supply and demand economics. Truckers are not being paid more because if they were, the rate-of-profit in that industry would not be sustainable anymore. But raising prices for logistics is not really an option for that industry, because as soon as you do that, other factors start to depress demand. What you end up with are maxed out industries where you either keep pay at todays levels, or go home and close shop.

It's complicated, but just 'A tight labor market causes the raises' does not even start to capture the situation. And it's not just greedy bankers that keep wages depressed. A tight labor market is not going to help increase wages. Not gonna happen because it's not seeing the whole picture.

Re: Executives Play Down the Possibility of Raises

#44

Post by ucaetano » Wed, May 30, 2018, 4:07 PM UTC

Tade0 wrote: post #41

ucaetano wrote: post #34

Earlier quoted context omitted.

> Which means it's essentially a free-for-all. If everybody is your enemy, then you still have enemies. Being a free-for-all doesn't make it enemies, just a game. The two prisoners in the prisoner's dilemma aren't enemies. Employment is just another case of game theory. There are times when the best outcome for you is to collaborate with your employer, other times is to play against them. And so on. A reductive visio…

> Being a free-for-all doesn't make it enemies, just a game. The two prisoners in the prisoner's dilemma aren't enemies. You're disregarding the fact that while the prisoner's dilemma is a non-zero sum game, employment in general is - any value added over your marginal usefulness is your loss and your employer's gain. Some people even "solve" this problem by being minimally valuable.

> employment in general is

You're absolutely, utterly wrong. Voluntary employment only exists because it isn't a zero-sum game.

Any voluntary trade is not a zero-sum game, by definition.

And any value generated in excess of your cost is capture by you and the employer based on the price elasticity of the demand for labor.

Re: Executives Play Down the Possibility of Raises

#45

Post by darawk » Wed, May 30, 2018, 4:10 PM UTC

ChrisLTD wrote: post #17

bcoates wrote: post #13

The idea that pay raises come from some sort of collective negotiation with a bunch of executives is just bizarre on its own. Executives do not get to decide the pay level of employees. The point of the tax law was to lower the cost of employment and investment in the US (specifically, the cost of repatriating foreign profits to pay US salaries and buy US-based infrastructure). The hope being that lower costs cause c…

"The point of the tax law was to lower the cost of employment and investment in the US. [...] The hope being that lower costs cause companies to value US labor more, which tightens the labor market." The point of the tax cut was to get more money in the hands of owners of corporations. And, so far, it's working quite well. We won't see much wage growth for one big reason, the Fed has and will continue to raise intere…

Actually the point of the tax cut was to harmonize our corporate tax rates with the rest of the world, and take steps to eliminate the domicile arbitrage and general loopholing that creates an enormous amount of deadweight loss in our economy.

Re: Executives Play Down the Possibility of Raises

#46

Post by mathiasben » Wed, May 30, 2018, 4:13 PM UTC

awinder wrote: post #18

bcoates wrote: post #13

The idea that pay raises come from some sort of collective negotiation with a bunch of executives is just bizarre on its own. Executives do not get to decide the pay level of employees. The point of the tax law was to lower the cost of employment and investment in the US (specifically, the cost of repatriating foreign profits to pay US salaries and buy US-based infrastructure). The hope being that lower costs cause c…

Is there any verifiable time in history when such a complicated multi-actor system actually did increase wages? Or is this the cold fusion of government policy?

Certainly during the biggest period of US wage growth ushered in by the Internal Revenue Act of 1954. Income in excess of $400K/yr taxed at 90% ensured that businesses invested as management and shareholders weren't permitted to capture earnings.

Re: Executives Play Down the Possibility of Raises

#47

Post by blfr » Wed, May 30, 2018, 4:16 PM UTC

bcoates wrote: post #13

The idea that pay raises come from some sort of collective negotiation with a bunch of executives is just bizarre on its own. Executives do not get to decide the pay level of employees. The point of the tax law was to lower the cost of employment and investment in the US (specifically, the cost of repatriating foreign profits to pay US salaries and buy US-based infrastructure). The hope being that lower costs cause c…

tight labor market causes the raises

Exactly. Trump's immigration policy has a much better chance of increasing wages than any tax reform which will barely make a difference at the margins. Not coincidentally, it's also much less popular with the corporate politicians.

Re: Executives Play Down the Possibility of Raises

#48

Post by ryandrake » Wed, May 30, 2018, 4:17 PM UTC

awinder wrote: post #18

bcoates wrote: post #13

The idea that pay raises come from some sort of collective negotiation with a bunch of executives is just bizarre on its own. Executives do not get to decide the pay level of employees. The point of the tax law was to lower the cost of employment and investment in the US (specifically, the cost of repatriating foreign profits to pay US salaries and buy US-based infrastructure). The hope being that lower costs cause c…

Is there any verifiable time in history when such a complicated multi-actor system actually did increase wages? Or is this the cold fusion of government policy?

It’s almost as if we are in Groundhog Day. Doomed to keep hopelessly trying trickle-down economics over and over again forever.

Re: Executives Play Down the Possibility of Raises

#49

Post by jmull » Wed, May 30, 2018, 4:21 PM UTC

sharkweek wrote: post #4

My favorite scam I've seen lately has been the "We're gonna give you a promotion with no salary increase, see how you do, and then discuss a pay raise after X months! You should be grateful for this opportunity!" And then of course in six months, the pay raise is basically a small bump, versus what one might be paid if brought in as a manager/higher title.

Not a great scam because you give the employee both the means and motive to leave for a better paying job down the street. Then you'll either have to repeat this draining process or pay a reasonable salary after all, only now you'll have a less experienced person in place for a while.

Re: Executives Play Down the Possibility of Raises

#50

Post by ksk » Wed, May 30, 2018, 4:22 PM UTC

dnomad wrote: post #29

awinder wrote: post #18

Earlier quoted context omitted.

Is there any verifiable time in history when such a complicated multi-actor system actually did increase wages? Or is this the cold fusion of government policy?

No, not at all. There is no evidence that tax cuts lead to higher wages or economic growth. It's been studied and debunked to death but it never dies.

There is evidence, its just that the evidence is weak and mere co-relations. All of macro economic theory is like that - just models explaining aggregate human behavior. Anything people propose can probably be shown to work in some model or another.

On the flip side, higher taxes also don't "lead to" any wage increases or economic growth. Given the massive waste and inefficiency in most government programs, very little of our taxes actually go to anything useful. Most of it goes towards war and to pay government contractors invoicing a $200 "military spec" screwdriver.