> I wasn't expecting Paul Graham to recite orthodox Marxism. This paragraph is only missing the word "exploited", because he's effectively saying that young good workers are undervalued because a large employer makes more money from them than they are paid.
At the very least, if the employer strictly loses money on all employees, the business shouldn't be sustainable (if it depends on employees, and they're not just a frivolous "inefficiency" economically speaking).
There is also this idea that a company, or a firm is a miniature socialism and the compensation structure is flattened in relation to the real value produced. Funny that this type of thinking kind of forces us to use some notion of value not directly tied to market, since the labor you do when working for yourself (and presumably, taking money for that directly from the market) is not the same labor you would do for an employer. The latter also provides you with a host of things (accounting, infrastructure...) that you would have to organize yourself if you weren't working for them. This doesn't even account for more financial stability and fixed work hours that you should get under enforced labor laws. So there is definitely value you get from an employer apart from the monetary compensation, if we are to compare that with the theoretical scenario of own business.