Federal Reserve chair says decline in workers' share of profits 'very troubling' • Hacker News Board

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#251

Post by dunpeal » Tue, Jul 17, 2018, 10:57 PM UTC

methodover wrote: post #239

pembrook wrote: post #124

Earlier quoted context omitted.

That's not what the Fed chair is talking about. Nobody is concerned about wages in tech. Tech is one of the few industries that has the opposite of a stagnant wage growth problem.

Yeah, I mean you're absolutely right. I'm in an incredible position, and yet, it still feels unfair. I'm 90% sure that it's just that I'm petty and greedy. And yet, like, at the end of the day the engine that drives the economy forward -- and humanity forward -- isn't cash. It's individual human beings sitting down and putting in the hard work in creating something new and nurturing it for years. It feels like our ec…

> I'm in an incredible position

Why? Because the founders gave you 1.8% pre-dillution equity, vesting over 8 years, and told you that's "very generous"?

You're an engineer in a market where engineers are in high demand and short supply. Being one of 3 engineers developing a product and getting just 1.8% of the equity - coupled with high demands and (I would bet) under-market pay isn't such a great deal.

You're shouldering quite a bit of risk spending your best working years in a place that likely will never be able to promote or pay you fairly. Your potential reward for that is very limited.

Yet after all this time, you still think you're getting an "incredible" deal...

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#252

Post by peacetreefrog » Tue, Jul 17, 2018, 10:57 PM UTC

s73v3r_ wrote: post #176

peacetreefrog wrote: post #106

Earlier quoted context omitted.

Really disagree with these comments (not as much this one as the other one in this thread) being flagged and removed. IIRC the line was basically, "many people have much more to invest then they claim, but they spend it on netflix, brunch, concerts etc instead" Sure, obv won't apply to everyone and not everyone will agree, but seems like a reasonable sentiment that should at least be allowed to exist on the thread. D…

I strongly disagree, mainly because that line of thought has no basis in reality, and allowing it to persist like this encourages the dehumanization of the lower classes. It's not a reasonable sentiment in the least.

No one said anything about dehumanization. It's your prerogative to disagree to what extent that line of thinking is based in reality. It shouldn't be your prerogative to see comments like that deleted because you disagree with them.

This article is talking about the labor-shareholder profit split. It's absolutely relevant to point out the opportunities normal people have for becoming shareholders. stockpile.com let's you buy fractional shares (no longer need 2k to buy a share of amazon) for a 99 cent commission. You can get commission free ETF's from Schwab with a couple hundred $ account minimum.

Arguing that most workers are so strapped for cash that they literally cannot set aside a few bucks to invest -- and not only that -- that arguments even hinting at such a thing should not even be said out loud, is mind boggling.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#253

Post by peacetreefrog » Tue, Jul 17, 2018, 11:02 PM UTC

kadenshep wrote: post #111

slg wrote: post #97

Earlier quoted context omitted.

I am not victim blaming, I am pointing out a way that the "broken system" has failed to educate people about the problem. You also can't just cite the average cost of living as if that it is a standard that has no waste in it. We need to do a better job of framing things like "if you switch to a worse phone plan and save $10 per month to invest, you will probably have something around $30,000 in 30 years while only i…

I edited my comment to remove the statement "Stop blaming people for a system they didn't choose." I'm sorry you read it. It was unnecessary and you're right, you're not really victim blaming. I got frustrated at face value because increasing wages would do more to alleviate a lot of American's financial woe's -- now and later -- than (rightfully) helping to educate Americans about investing money. You're right, even…

I appreciate the spirit of this comment too. I do think though that where many well-intentioned people go wrong is that they think wages are just like a dial that "we" (or gov or whomever) can easily turn. I think this essay gets at a lot of these ideas very well:

http://russroberts.info/article/the-reality-of-markets/

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#254

Post by Crye » Tue, Jul 17, 2018, 11:04 PM UTC

gbacon wrote: post #160

methodover wrote: post #79

The allocation of profits in startups, at least, feels... problematic. I was the #2 engineer hire when I was hired five years ago. Since then, we haven't become super successful -- yet -- but we're at least at breakeven. We have three engineers and we're working on a huge new project that hopefully will really grow the company. I have 1.8% equity. Sometimes when I'm working late or working on the weekend, which is of…

We've thrown a significant percentage of our lives, and they've only thrown in money Money saved, borrowed, or inherited represents a significant percentage of someone’s life. Even if you deny this, the money in someone’s pocket in the present represents an enormous percentage of that person’s future life. Put yourself in the shoes of the owner who took risk up front. Yes, you took some as well, but at any time you c…

Or we can look at it the way it really is.

Equity is just a point system which gives people the ability to make decisions and influence our world.

They could earned the equity, been given it or just been plain lucky and found it. It literally doesn't matter. They have it now, and we all accept these are the rules.

It's just a sorting algorithm we come up with to help efficiently allocate resources.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#255

Post by dunpeal » Tue, Jul 17, 2018, 11:04 PM UTC

methodover wrote: post #244

dunpeal wrote: post #191

Earlier quoted context omitted.

> Sometimes when I'm working late or working on the weekend, which is often, I wonder: Is this really worth it? The key problem in your (all too common) story is that you're only waking up to reality now. I'm guessing that like most startup employees, you were swayed by initial aggressive courtship by the founders / chief-execs, with lots of vague handwaving and hyperboles telling you that you'll definitely become a…

> From your perspective, you are already fully vested So, um, about that. I should not have said I have 1.8% in the bank. I actually just have about half of that vested so far. I won't be fully vested until three years from now. I don't really want to quit. I'm excited about what we're working on and I think it could be really useful for people. I just wish that the upside was a little bigger. I also really loathe th…

Are you getting paid your market rate in cash?

Did you do a bit of searching, and failed to find anyone who would pay you substantially more?

Are you OK with working hard, including these weekends you mentioned?

If the answers to all these questions is "yes", then by all means - stay.

Otherwise, you may have a reason to leave. This is your decision. Think about what is best for you.

> I just wish that the upside was a little bigger.

Either take action, or just forget about it.

If you have a realistic chance of getting more, for example by threatening to quit, then go ahead and do that. I saw below you already asked your founder, who declined with a BS excuse ("the board won't like it" - read: I don't want to give you more equity).

There's obviously risk in pushing it, especially after you already got denied twice.

So either accept it and stay, or push for more, taking the risk you'll be denied again and possibly they'll look to replace you since they'll realize you're not happy.

> I also really loathe the idea of walking away from something that isn't finished, you know?

Man, this is software. Nothing is ever finished :)

Always that extra feature, another platform to support, that other scaling target you wanted to hit...

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#256

Post by kimdotcom » Tue, Jul 17, 2018, 11:10 PM UTC

bluGill wrote: post #168

jrjarrett wrote: post #83

Shocking. SHOCKING, I say. The recent tax cuts were touted to generate big raises for American workers. A few companies made some news with one-time payouts, but then the rest of that is just being funneled to shareholders. If a government creates laws that incent shareholder givebacks, you wonder why workers' share of profits aren't increasing?

The recent tax cuts will take a few years to filter though the economy to workers - at best. Thus it is incorrect use results to judge any policy until many years have passed. This is the nature of most things that the government does, and why it is really hard to figure out what is best. There are ways to make judgement that are not based on results, but they always subject to their own biases.

Ronnie?

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#257

Post by jwhitlark » Tue, Jul 17, 2018, 11:15 PM UTC

colordrops wrote: post #88

methodover wrote: post #79

The allocation of profits in startups, at least, feels... problematic. I was the #2 engineer hire when I was hired five years ago. Since then, we haven't become super successful -- yet -- but we're at least at breakeven. We have three engineers and we're working on a huge new project that hopefully will really grow the company. I have 1.8% equity. Sometimes when I'm working late or working on the weekend, which is of…

This is a common discussion item here at HN. Really it only makes sense to work at a startup in the following scenarios: you are founder, you are new and need experience, you are getting paid very well, or you don't care about money and love the work. Trying to get rich as a non founder is a fools game.

I agree. Salary is paid for work, returns are paid for success (or speculation). But while it is a component, work != success.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#258

Post by clairity » Tue, Jul 17, 2018, 11:19 PM UTC

methodover wrote: post #79

The allocation of profits in startups, at least, feels... problematic. I was the #2 engineer hire when I was hired five years ago. Since then, we haven't become super successful -- yet -- but we're at least at breakeven. We have three engineers and we're working on a huge new project that hopefully will really grow the company. I have 1.8% equity. Sometimes when I'm working late or working on the weekend, which is of…

the ingenuity and curse of capitalism is boiling all of human value down to a number. when someone uses the phrase "business decision", that's shorthand for "let's use monetary value in place of the messiness of the human condition".

this generally isn't a malicious act--meant to make the task more manageable--but it does set up the board to be advantageous to the capital holder (in this case VCs, and to a somewhat lesser extent, founders). the capital holders aren't bad people per se, just that the emergent property of the system is tilted toward capital and away from labor. this is the version of capitalism as we have it now.

you've implicitly accepted that game when you took a salary and an equity stake. capital holders are exceedingly motivated and practiced at squeezing value out of a transaction--that is why they got into the game in the first place. within this game, you'll need to either find leverage points (like a unique skill or asset) to get what you think you deserve, accept what you've got and appreciate your relative comfort, or find another opportunity (which is a potential leverage point in itself).

(part of) the medium-term solution is to bend the regulatory environment toward fairness. things like making the capital gains tax rate the same as ordinary income, and holding corporations and executives responsible for their actions, just like regular persons.

in the long-term, is there another system of figuring out who deerves what and how much? how do we allocate resources fairly so that no one feels shafted? it's the ultimate (dynamic systems) optimization problem. capitalism is attractive because it's decentralized, but is there a system better at solving this optimization problem without losing this attractive property?

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#259

Post by s73v3r_ » Tue, Jul 17, 2018, 11:19 PM UTC

peacetreefrog wrote: post #252

s73v3r_ wrote: post #176

Earlier quoted context omitted.

I strongly disagree, mainly because that line of thought has no basis in reality, and allowing it to persist like this encourages the dehumanization of the lower classes. It's not a reasonable sentiment in the least.

No one said anything about dehumanization. It's your prerogative to disagree to what extent that line of thinking is based in reality. It shouldn't be your prerogative to see comments like that deleted because you disagree with them. This article is talking about the labor-shareholder profit split. It's absolutely relevant to point out the opportunities normal people have for becoming shareholders. stockpile.com let'…

"No one said anything about dehumanization."

I did.

"It shouldn't be your prerogative to see comments like that deleted because you disagree with them."

It absolutely should be everyone's prerogative here to see comments that disagree with reality deleted.

"It's absolutely relevant to point out the opportunities normal people have for becoming shareholders."

It is. The comment you're talking about did no such thing, and proceeded to blame poor people for not doing so based on a viewpoint that is completely divorced from reality.

"Arguing that most workers are so strapped for cash that they literally cannot set aside a few bucks to invest -- and not only that -- that arguments even hinting at such a thing should not even be said out loud, is mind boggling."

Arguments that have no basis in reality are not being done in good faith. Arguments like the one you're currently trying to defend exist solely to blame the poor for being poor, and to make the person feel smugly superior that they're not poor, even though the difference between them and the people they're complaining about is usually just dumb luck.

Re: Federal Reserve chair says decline in workers' share of profits 'very troubling'

#260

Post by s73v3r_ » Tue, Jul 17, 2018, 11:21 PM UTC

slg wrote: post #233

s73v3r_ wrote: post #169

Earlier quoted context omitted.

"We need to do a better job of framing things like "if you switch to a worse phone plan and save $10 per month to invest, you will probably have something around $30,000 in 30 years while only investing $3,600."." Prove that is possible. Find an investment that will do that.

Those were back of the napkin numbers. The S&P 500 has an average annual return around 10%. With a monthly investment of $10, it would take just over 32 years to get to $30,000. So I might have been a little too generous but the numbers are still realistic and the specific numbers were not really the point of the comment anyway.

The numbers were very much a part of the comment, and thus it is quite valid to guarantee you're still operating in reality when you make claims like that. Your 32 years to get $30,000 makes a lot of assumptions. One, that in 32 years $30k is going to be a significant amount of money, still. Second, that the person investing does not have an event in their life that would drain away any investments that they have, like an illness.