Am I crazy for thinking it seems naive to not anticipate that current employees may not take kindly to people who earn half as much as them getting bumped up to their salaries?
No, not at all. I think it would have made more sense to give each employee a raise based on a percentage of their income. That way, everyone gets a pay raise, and you can give more money to the lower earners without offending employees because it is an equal percentage increase.
The higher earners receive a larger increase than they would have under a different regime (where everyone receives a constant $ increase [normalized for the "lowest earner"]).
I know what you're saying, but I've never understood this logic personally. How does someone else earning more money hurt you? It's not like a person doing better than you is taking your money.
Well the assumption is that the old salaries reflected what you were worth to the company. So bringing those who were previously compensated as 'less important' up to the same as the 'more important' people implies that the relative importance of those who were previously paid more has decreased, acting as a sort of 'now all your years of experience are worth no more than the minimal experience your colleague has.'
Whether you agree or disagree, that's how I think those who are offended by this sort of change see it.
I think it's more along the lines that slackers that are lower pay scale getting huge raises that could equate to a 200% increase, whereas top performers, people who get paid above the threshold already, get nothing really.
We're nicely dressed chimps, obsessed with hierarchies and status. A lot of our sense of value doesn't rest with how we're doing in absolute terms, but in how we are compared to the people around us. And even recognizing this, I'd be pissed off if I busted my ass off and provided lots of value to a company for a couple years and a new college hire ended up getting paid more than me, which has happened before.
“The only time you look in your neighbor's bowl is to make sure that they have enough. You don't look in your neighbor's bowl to see if you have as much as them.”
It means all of the previous sacrifices the good employees made were for nothing in the eyes of management. Therefore, there is no reason to work hard at all. It is better to go leave for a competitor that knows how to treat their hard working employees.
But if you were getting compensated fairly before, why are you no longer getting compensated fairly because other people got a raise? The most rational action would be simply to match your work output to your peers.
I mean if the market rate for the job you were doing is $70k, and all of a sudden fresh college grads are getting paid that at your company, it doesn't mean that you'll now get $100k elsewhere if you leave. If that is the case, you should have already left.
Now if you were already being underpaid and you were staying at the company for some other reason I could see bailing when others got a pay bump regardless of their contribution.
> If that is the case, you should have already left.
It's interesting how disingenuous conversations can become on HN. Where in one thread everyone will happily acknowledge that lots of developers work extremely long hours at startups for peanuts (in hopes of a possible big future payday) compared to what they could make guaranteed going to work at a larger established company, in another thread the mentality is that everyone is always optimizing for short term earnings.
I personally am happiest when I'm working 70-80 hours a week and appreciate being compensated for my hard work. Just because that doesn't describe you doesn't mean I should be forced to attain an artificial "balance."
His value system is consistent with the cultural norm (higher pay for longer harder work). In my opinion you shouldn't act like he is the one acting strange.
> So, other people make more, and you'd make yourself unhappy in retaliation?
No, but I would start looking for another job. If the company has the excess profit to be giving out huge raises, I'd be upset that those raises were allocated only to low performers.
First, I'm not forcing anyone, my opinion is completely inconsequential to your professional life.
Secondly, Ensorceled specifically said (s)he would start "enjoying the weekends", which implies the long hours were, unlike for you, not being particularly enjoyable.
There were a number of people making less than that at Gravity Payments; so it seems likely that there are other qualified people in the area who will appreciate the salary that you are now grumpy over.
In fact, apparently 1000s are applying to Gravity Payments hoping to take any grumpy person's job.
So if you are grumpy and 9-5ing it (as you said); why should Gravity Payments keep you?
How would your stated attitude help you work with people who did get a raise?
Who said I would be grumpy or toxic? Just working the same hours as my peers would actually probably make me less grumpy. I'd be very happy and grateful to adjust my effort downwards if I can keep my same salary.
One argument could be that the incentive to contribute to what used to be a higher-paid higher-skilled job goes away so now less people will do it, harming society as a whole.
1 - My productivity is X per month. (Whatever your definition of productivity, it must be, because I can ask for a bigger salary.)
2 - This other guy productivity is X/2 per month. (By the same rationale.)
3 - The other guy gets a raise, and now is paid twice for the same work.
4 - It follows that I'm losing the opportunity of a raise, because I do more than him.
It's not logically rigorous, it may not be true at all, but it's not an irrational reaction either.
Tons of studies show that it is not absolute pay, but pay relative to your coworkers which influences your feelings about fairness and your position in the company. Like it or not, that's how it is.
Do you not understand the logic of people who feel that way, or do you simply not believe in it yourself? If you were getting paid $35k/year to do the same job as everyone else who was getting paid $115k/year, would you feel that it was somewhat unfair?
So what you are really saying is the problem is people knowing other people's salaries? Because unless I'm the exception, the norm is not knowing what people are getting paid.
So, what you are really asking is: If you were getting paid $115k/year to do a job where $115k/year was the normal competitive salary in your area, would you feel that it was somewhat unfair?
I ask this because I wonder what would have happened if he'd not said anything.
"So, what you are really asking is: If you were getting paid $115k/year to do a job where $115k/year was the normal competitive salary in your area, would you feel that it was somewhat unfair?"
^ How in the world did you come to that conclusion? oh_sigh's whole point was that a person would be upset if they knew they were getting much less compensation than others for the same kind of job.
I'm guessing you had a point there, but I'm not sure how the quoted phrase above is supposed to support whatever the point was.
> How in the world did you come to that conclusion? oh_sigh's whole point was that a person would be upset if they knew they were getting much less compensation than others for the same kind of job.
Well, yeah. But that assumes you know what other people are getting. As I said, I'm assuming most people don't know or share what they are making (at least in the US) with their coworkers.
So, for the average person, this really comes down to the question I asked as most people don't know what others are making (again, total assumption on my part).
And that all comes down to my last statement in my original comment, which I guess is really just a way of saying "ignorance is bliss." And if you are ignorant of what others are making, the question is really as I put it: If you were getting paid $115k/year to do a job where $115k/year was the normal competitive salary in your area, would you feel that it was somewhat unfair? Don't assume $115k/year is higher or lower (you don't know).
I'm not pushing an agenda or anything. Just really wondering.
For most of my career, my salary has been not only known to my coworkers, but to the public at large via the local newspaper.
The impact? Nothing at all.
The only situation where I would be concerned about it would be a case where the company discriminating against people or aggressively ripping the employees off. I've witnessed both.
The big argument here is that the 10x producers are pissed off about others benefiting. The reality is that most of these "10x" people are mythical, and the ones who are real are either getting screwed anyway or make a salary consistent with their value.
Yeah, it sounds like we're asking to balance some pop psychology against a minimum amount needed for a middle class life. I would emphasize the latter, personally.
Even if people are paid the same, when times are tough the true value of each employee will be obvious. It's also not unusually to "signal" value through other types of compensation.
It reminds me of the view that poor people should be happy because they are still living a very high standard of wealth compared to some people in other countries. People have already created a list of problems with using an absolute standard; I'm sure many of them will carry over.
Also, it does impact you directly. As those around you get paid more, there is more disposable income which impacts pricing. Now, a hundred employees in a large city has zero actual impact, but the psychological resistance is already there because it will have an actual impact at larger scale (also could impact if there is a company store/cafeteria or such, but I don't think that applies here).
Then there is the notion of unequal raises. If someone else gets a 200% raise because the company has enough money, you are left wondering why you didn't get one. Did you not do good enough? Even if you already had a raise, if it was for some other reason, you are left wondering why you don't get one. Once again, even with a rational reason (because you were already making above the new minimum), the emotional damage is still there. Such a raise doesn't feel fair, regardless if it is or isn't.
Finally, considering how many times people are denied wages 'because the money isn't in the budget for it' (even if that is just used as an excuse), there is a chance one who deserves a raise can be denied it because the budgeted money for raises was already spent on other raises.
The arguments presented by the employees quoted in the article make it seem that it is exactly about someone else earning more money taking your money, not actual money but potential money. One of the high profile employees that left talked to Mr. Price about the fairness of newer employees with less responsibilities getting a dramatic pay raise while she and her co-workers, who have been at the company longer and have more responsibilities, did not receive a similarly substantial raise. It doesn't say exactly what Mr. Price said to her, but from her reaction ("He treated me as if I was being selfish and only thinking about myself") I would guess she got something close to "how does someone else earning more money hurt you?"
> I would guess she got something close to "how does someone else earning more money hurt you?"
I think that was in the article. If you work your ass off sacrificing your personal life for years helping build a company, at most companies there is a financial payout at some point for that hard work, but in this case, the money resulting from that hard work it seems is largely going to top up the incomes of the nine to fivers. I don't see how it's hard to understand that some people would be upset about these, it's pretty simple math (actual hourly pay based on hours worked).
>How does someone else earning more money hurt you?
It's not that simple. The employees were already working under conditions that job/person a was worth 2x and job/person b was worth 3x. That was established and everyone was content (or reasonably so).
All of a sudden, someone declared that job/person a is worth 3x too, with no corresponding change to the output or expectations of either job.
Job/Person b, having been previously told that their value was, at 3x, MORE than job/person a, is now told that their value is now equal.
That's a redefining of the previously established contract of understanding. To expect Job/person b to completely agree to that redefinition is rather naive, to say the least.
I'm more valuable to my company as their key software developer than the receptionist. I've got more knowledge of how the company works, contribute more to the bottom line and am harder to properly replace. I expect my compensation to reflect that.
If you suggest all of a sudden that I'm not any more valuable than the receptionist hired last month, you should rightly expect that I'd be a little pissed.
I understand that very human response and would probably feel it myself, but if your salary is 3x the receptionist's, you're still not technically getting paid 3x what he/she does, once you factor in a progressive tax rate and public services that are used disproportionately by lower-income people.
What this guy tried to do is in effect just raise the floor of the minimum wage, which is also unfair to you.
How do you know how valuable you are? Or how much more valuable you are than the receptionist.
My assistant is ridiculously valuable. She's a multiplier for the team. Her presence means invoices get paid, visitor logistics are taken care of, contracts get renewed, the office is in order. I don't control her pay, but every hour she is present easily saves me a quarter hour, and probably saves my direct reports a similar amount of time.
Essentially that role for me is manufacturing an asset that I cannot buy -- time. If I could control her salary, I would double it.
Because in most cases he could learn to do her job in a few weeks, whereas it would take her years to learn his, if at all. Look what website you're on - people here write software to literally eliminate jobs in many cases, and to do so you have to understand that job even better than the person who does it, and then some. And this doesn't just apply to "menial" jobs - by the time a software developer is done implementing in a highly specialized field, they often fully understand the domain better than the experts.
Look, I understand the value of a really good personal assistant, at times they can be like magic, but let's be serious, all jobs are not equally difficult.
To elaborate a bit on this, the term economists like to use for this is "alternative choices". The minimum price of the assistant is somewhere around how much it would cost to hire and train someone to replace her - that is, her minimum price is set by the price of the alternative choices that the employer has. After all, it is irrational to hire an assistant at $2X who will produce Y output when you could hire an assistant at $X who will produce Y output.
On the other end of the scale, the maximum price is value of her productive output to the company - it is irrational to pay her more than she can generate.
Negotiation is the skill of convincing your employer that you're harder (ie, more expensive) to replace, thus propelling your pay closer to that maximum.
> If you suggest all of a sudden that I'm not any more valuable than the receptionist hired last month, you should rightly expect that I'd be a little pissed.
Then leave.
Seriously. If you are so upset then leave.
But when interviewing, you might want to come up with a different reason for leaving the job. The interviewer might not be so understanding.
Update: wow, a downvote. :-) I welcome the downvotes.
I think this was researched in numerous psychology studies.
All else being equal, people were happier earning $70,000 knowing that their peers earned $50,000, and unhappier earning $90,000 knowing that their peers earned $110,000.
I am likely wrong on exact numbers, but studies are well-known enough to be quoted in "Fooled by Randomness", "Predictably Irrational" and some other pop-psych titles.
The sudden change is another factor: if people had "always" been making much more similar incomes, or if the company gradually/quietly narrowed pay spreads over time, the results may be different than a sudden change from large pay disparities to much smaller ones. Some of it in my opinion is quite cultural, not purely psychological, based on background expectations of what wage spreads "should" be.
When I used to work in Denmark, I noticed expats were often much more annoyed about the (approximate) wage equality than Danes were. I was making $80k or so, and most people I knew were making in the $70k-$100k range, doing jobs ranging from professor to software developer. Meanwhile, a typical full-time restaurant waiter or construction worker might make around $50-60k. So, we had higher incomes, but not by a huge margin, certainly less than the spread would be in the US. Many expats found this grossly unfair, that despite them having a high-status and supposedly high-end job, they were still in approximately the same socioeconomic class as basically any other worker. They considered themselves underpaid, and the other workers overpaid. But most Danes didn't really see an issue, and considered the Danish wage spreads to be normal.
Ask yourself - If you are making minimum plus x and they raise the minimum to your salary mark, do you consider your worth to be "the minimum" or would you prefer your wage rise in tune with the increase?
My guess is the latter.
The argument against minimum wage increases is that it has a ripple effect and raises other wages as well.
Answer: It raises prices for everyone, because the vast majority of companies will not simply absorb the hit to profitability, assuming they even have the ability to absorb a cost increase that large at all.
Whether you support a minimum wage increase or not, to think that it won't affect other people than those that are getting the increase just isn't true. Here's some possible side effects.
- Prices of products or services increase to compensate for the increase in salary.
- Higher paid employees don't get raises since the money that was previously allocated for that is being used to pay for the minimum wage increase. (This seems to be happening in this case, where more experienced workers received little to no increase in compensation).
- Other benefits are removed or reduced to cover the additional cost (health insurance, vacation, sick leave, etc)
- The company can no longer be profitable with the additional costs and reduces the size of their workforce or shuts down completely.
Which of these side effects (if any) occur, depends on the company and its current profits, management and/or investors, as well as how much they are already paying employees.
Or perhaps the company makes more money because the minimum wage workers are happier, work harder, and don't quit as often, leading to lower turnover costs, and because the company's customers (often minimum wage workers themselves) have more money to spend. Note the steady increase in restaurants and other food service companies in Seattle as the minimum wage increase phases in[0].
It could raise your cost of living (e.g., housing) because now there are more people who could afford to pay a certain price for something than before.
I think it's great that it elicits that reaction in such a stark way, though - it will make more than a few of them wrestle with it and maybe get past it.
I can totally defend the desire to quit out of not wanting to have golden handcuffs, but quitting because someone "below" you is now not as far "below" you (or is now "shackled" to you, a ridiculous thought) is just spiteful and self-damaging.
I think it is - for the cited examples getting a raise from 40k to 70k, this is strictly better than what they had before,/but they're still complaining. Economic rationality has nothing to do with it.
Am I crazy to think nobody should actually care? By that, I mean the cost of caring about it is probably much higher than the cost of not caring about it.
I wonder if on the grave marker of humanity it will not read "THEY CARED TOO MUCH ABOUT SOCIAL SIGNALLING". The Universe is far too personal (and, curiously impersonal at the same time ) to care about whether other people are "winning". They'll get theirs, you'll get yours.
I would love to see a more in depth case study of this.
I also wonder how much of the issue is because it was in some respects a publicity stunt. If instead it had been quietly phased in over two years, I doubt there'd be as many negative ramifications.
Are the crabs aware of their situation? Are they actually consciously preventing the other crabs from escaping? Or are they just trying to grab on to anything they can get get out of the crab-pile?
Seems like a deeply flawed metaphor that will likely lead you astray.
Like, if a human meerely intends "to grab on anything they can to get out of the [human]-pile", & they're quite rude/destructive while doing so, they're still rude/destructive regardless of how sympathetic we may judge their intentions to be.
Certainly. The linked reference argues otherwise though:
>is a phrase that describes a way of thinking best described by the phrase "if I can't have it, neither can you."
>Individually, the crabs could easily escape from the pot, but instead, they grab at each other in a useless "king of the hill" competition which prevents any from escaping and ensures their collective demise.
Interesting. He would have done well to have read The Hard Thing about Hard Things by Ben Horowitz, which conveys nicely that much of being a CEO is realizing that when you think you're talking to person X (about their salary, etc), you're also sending messages to everyone else in the company. You have to keep everyone in mind, all the time.
It seems (based on the Horowitz reference, pardon me if I am wrong) you're implying that Mr Price was wrong to make the change based on losing two key employees (and probably more that didn't up and quit). Maybe at the time he didn't anticipate that some would feel slighted but he also didn't know really what the change mean to the lives of other of his employees.
An interesting question would be "if you could go back in time would you do it all over again?" (PR and ego would probably indicate "yes" but we would never know the real truth).
It's not so much that the change was wrong or right, but that Mr Price didn't anticipate how big a deal it would be, both internally and externally. While a couple employees might have left, it sounds like the company may now be in a financial crisis which is a bigger deal.
I'm mostly saying he should have thought it through more, even if he did go through with it.
Whether it was foolish is a bit too soon to declare; he already is getting more business. And that's harsh to say "give it some forethought". I didn't read anywhere in the article about how much time he spent thinking over the decision.
This reminds me of a few months ago when gas price was down to a mere $2.00 . It was wonderful for the public, but all I heard on TV is how bad it was for the economy.
We shouldn't let this be the norm, these employees complaining or those who quit are angry that their "inferior" coworkers are getting the same wages.
> a few months ago when gas price was down to a mere $2.00 . It was wonderful for the public, but all I heard on TV is how bad it was for the economy.
That really pissed me off. When the gas prices were high, then the damage to the economy was clear—everyone was paying more, prices for everything across the board were going up, because the cost of doing everything went up.
And then when prices dropped? Suddenly it was "bad for the economy". I'm sure there were companies it was bad for—specifically, the companies that were riding high when prices were gigantic. But for the rest of the economy, it was a breath of fresh air.
> This reminds me of a few months ago when gas price was down to a mere $2.00 . It was wonderful for the public, but all I heard on TV is how bad it was for the economy.
WTF? Low gas prices are almost uniformly good for the economy. The only companies it isn't good for are oil companies. And they make so damn much money no matter what that it really doesn't hurt them very much.
While I have no idea whether this will work (or if it's a good idea), the most interesting part of all of this, to me, is the backlash from people calling it "unbridled Socialism."
I'm still not sure how a CEO of a profitable company electing to pay his employees more becomes a political debate. If it fails, perhaps it's a failed experiment in Capitalism? It's not like anyone is forcing the business owner to do this.
Theoretically, economics would dictate that by paying people $70K who would get paid $40K would make them fight like crazy to keep their jobs, wouldn't it? And if that's the case, wouldn't one conclude that their productivity would increase, and the company would be much better off? Unwise investment? Perhaps. Unbridled "Socialism?" Definitely not.
Because it makes a good story in their circle of people who don't know the meaning of socialism. If the CEO of a company is not making 200-300 times their average employee, they think it's socialism.
Because it makes a good story in their circle of people who don't know the meaning of socialism.
The thing is, like most words in English, "socialism" has taken on multiple meanings. Like it or not, there's the "textbook" definition and then then colloquial usage. And in America, "socialism" has come to refer to anything that involves redistributing wealth, providing social safety net(s), or otherwise trying to actively manage social inequality. It's a broader, more expansive definition, and I understand why purists hate seeing words diluted, but what can ya do? You can't put the horse back in barn, that ship has already sailed, can't un-ring a rung bell, etc., etc.
People call it socialism because a starting salary of 70k is likely to be uneconomic. Ie the cost of the employee is set above their value to the company. This is done at the expense of other stakeholders (ie management and investors, possibly other employees who would be paid less).
That's kinda the basic premise of socialism - whereby an employee's salary is dissociated from the economic benefit they bring.
Ie the backlash is because he chose to set everybody's salaries fairly high, regardless of seniority, etc.
I think the reason people are upset when this is called socialism is because those same people saying "you are paying those people more than they are worth!" don't call it socialism when other people are paid way more than the value of what they contribute to the company (CEOs of failing companies making millions, board members who don't do anything, etc).
Since when is an employee's salary based on their value to the company? Occasionally that value can be measured, and an employee will be payed by commission, but that seems like a bit of an exception. How do you judge the value of a business's single, extremely necessary, janitor?
I thought employees were generally paid by their market rate, i.e. how much it would cost to replace them, which is not necessarily related to their value to the company.
Conceptually, though in reality/over shorter time frames, it's potentially just as tied to political/human considerations vis a vis the person setting the compensation decision. Maybe easier to avoid this in start-ups, but I saw it happen with some frequency in the context of working for a large global bank. At a certain scale, feudalism or liege-lord-vassal models becomes as good of a mechanism for interpreting outcomes at a human level as anything else.
That's kinda the basic premise of socialism - whereby an employee's salary is dissociated from the economic benefit they bring.
The basic premise of socialism is that the means of production are in social ownership. Paying employees based on the economic benefit they bring is not contradictory to socialism.
People call this socialism because, after so long hearing the term bandied about as a catch-all fear word, they simply apply it to anything that doesn't match their view of the one true God's own capitalism.
As someone who actually lived in a socialist country (the one that started the whole socialism business :), take it from me. While the original framework devised by Marx in the 19th century referred to means of production, in actuality the socialism that came to pass meant that salaries were set for a given position / seniority with no relation to the person's education or how good of a job they were doing.
Ie that was the socialism as it was practiced 'on the ground' (which was in no small part responsible for why USSR economy collapsed).
Sure, that's one set of data, but there are other organisations of various sizes and various degrees of socialism. To tar them all with the brush of the former USSR hardly seems fair.
Not really relevant since I am working at a startup and have a significant % ownership. I am renegotiating for a much larger % of the ownership. But how much the % is worth at the end of the day remains to be determined.
> the backlash from people calling this "unbridled Socialism."
It depends on the CEO's reasoning for paying the employees more. If he paid them more for economic reasons, reducing turnover, or incentive pay for increased performance, or a retention bonus or something like that then it's capitalism. If he paid them more because he's moralising about society, or out of pity, or fear of some kind of social backlash, then I would say it's socialism that motivated it.
Okay after reading the article, I would agree with Rush's take on calling it socialism.
To paraphrase Oscar Wilde, you can judge a man--or a cause--by their enemies. Nothing makes me more interested in embracing socialism than Rush's rush to define socialism as "any action that shows concern for your fellow human."
> Theoretically, economics would dictate that by paying people $70K who would get paid $40K would make them fight like crazy to keep their jobs, wouldn't it?
From the article, it sounds like his business had a host of employees below and above that threshold, and the ones above felt resentful and unappreciated, with some people quitting. Remains to be seen if it will have any effect on the business, but it's the people above that level that tend to do non-trivial work, and are harder to train and replace.
Talking about "cost of living" in a place like Seattle, as if it were an ordinary economic issue, masks the real problem, which is that liberal US cities have made it very difficult to construct new housing. If a million families want to live in a city, and the city only allows half a million houses to be built, then a lot of people are going to be forced out. It's not a question of economics, it's a simple question of arithmetic. It doesn't matter how much you pay people or what minimum wage you have or what other policies you enact. It's like a giant game of musical chairs - if there are more people than chairs, it doesn't matter what else you do, because someone's going to wind up without a chair. Increase salaries, and rents go up to compensate. Subsidize housing for the poor, and landlords will charge more. Enact rent control, and watch as everyone converts rental buildings into super expensive condos. It's like trying to squeeze Jell-O to death: you can't beat the fundamental law that, if there are houses for X people, only X people can live there.
I like to consider myself a regular at my neighborhood council's meetings (NE Seattle). When the city shows up to present development plans, only older generations who feel somewhat entitled to their neighborhood's "culture" show up and berate the plans. At the last one, some lady was pissed because a new apartment building might block partial sunlight in her yard, which is apparently more important than 400 market priced units becoming available in a city starved for housing.
Then these same people get upset at Amazon (I have no affiliation) for bringing in tech money and causing a massive housing shortage. They then allow their short term memories to forget what a shithole South Lake Union was before Amazon bought and developed on the land.
There's an entire economic theory that progress only happens when the older generation dies off. A bit grim, but I can believe it. There's a subdivision near my house that allows only 55+, and anytime anyone wants to do anything it's a massive shitshow. They stalled a much needed bond for a local highschool for two years (during which said highschool got really, really overcrowded) and actually ran insane smear campaigns against the school board. Not fun.
That seems like it wouldn't work... I mean, a fraction of the 'older generation' dies off every day.... and a few new people join the 'older generation' as they age.
Now, I can imagine saying things like "The progress will only happen once all the people who grew up with things being the old way die off," especially with things like interracial or gay marriage, but I don't think that applies to something like housing. Whoever owns the current houses will never want more houses built; that will only drive down the value of their property. It may be true that the people who own those homes are usually older, but that will not end when they 'die off'.
You're absolutely correct; I quoted a gross oversimplification of the theory. It's more to do with per generation than actual old people, and people are always protective of home value.
Consider, however, that when an elderly person dies their assets,in this case houses, are usually sold off, which might be enough for a builder. It's not the core tenant of my argument, but it's something I'd never thought of before.
There's no need to toss "liberal" in there. Dense cities tend to have rent-control, and Dense cities tend to have people with policies generally referred to as "liberal" (to the extent that "liberal" means anything.
But NIMBYism and status-quoism is not just a liberal issue, and "not changing the neighborhood" is right in line with the definition of "conservative", which means a preference for how things already are and against risky changes.
Trying to squeeze any question into a "liberal-conservative" split just muddies the issue.
Dictionary definitions of words are usually not very close to the use of these words in political contexts.
Regardless of dictionary definitions, if we agree that building restrictions are a bad policy, it is a valid and IMO interesting empirical question whether most people supporting it self-identify as liberal, conservative or something else. (I honestly don't think I could guess the answer.)
My guess is that stated support for the prototypical bad housing policies we love to hate would be pretty constant throughout the political spectrum (though that's just a guess). The issue is that that in BFN no one cares about rent control or constructing new buildings because housing is so cheap and space is so plentiful; only in places where housing is expensive and space is scarce do those issues get any political salience. And since those tend to be more liberal areas, we ascribe "liberal" to those policies as a descriptor.
Yeah, there really is a need to toss "liberal" in there. More liberal dense cities seem to have this problem much worse than dense less-liberal cities. Qualifier: American cities.
Some of it tends to be due to liberal reflexes (participatory democracy at all levels, favoring small local groups of activists over people who stand to profit, etc.) that backfire writ large. Add in a distrust of markets, and you have a recipe for disaster. San Francisco is a great example.
Austin and San Antonio is an informative comparison. They're both inland cities, but Austin has placed significantly more liberal policy into practice. They have problems with spiking rent.
Specifically, in the coastal cities where this is an issue, usually both sides of the development/anti-development political spectrum identify as liberal. It's very orthogonal to the issues involved in state or national politics.
So you're saying no need to toss "liberal" in there because it's so obvious.
By the way, conservatives would not object to developing a neighborhood if that development meant more economic opportunities and more jobs.
If you want to split hairs over a dictionary definition, conservatives would prefer to keep things how they are and continue economic growth through expanding the private sector rather than expanding government to direct businesses on how to operate.
Coastal cities aren't expensive because of bad housing policy (though they certainly have that). They're expensive because lots of highly economically productive people and companies are located in them.
I'd argue you're mostly getting cause and effect backwards: places end up with lots of high rises because they're the most economically productive localities. Obviously at the margin another high rise will lower prices a bit, but the rate at which we'd be able to build them in SF sans restrictions would at most keep prices stable year-on-year. Which isn't nothing, but it's important to be clear that no one making, say, $80k a year will ever be able to purchase a house or condo in San Francisco, regardless of our policy choices.
There are lots of places either similarly, or more dense than San Francisco with housing people can buy on an $80k salary. All of these places allow for higher density housing. Sure SF is way behind the curve at this point, but it's a bit silly to argue that "policy debt" is a reason policy changes wouldn't do much.
Housing follows the laws of supply and demand like everything else. Cities with lots of jobs draw in migrant workers. Cities that raise minimum wage bring in more workers from neighboring areas with lower wages. Those people need a place to live.
Housing should follow the normal economic laws but it doesn't seem to. Part of it is regulation, and part of it is an odd kind of scarcity. If there were no housing regulations, I'm sure you' get a lot of new housing in the Bay area and people would live in there (despite it being potentially unsafe). Heck .. I was actually entertaining the live-in-a-container option :-p
I'm still struggling to understand the scarcity aspect of housing. Supply of land isn't increasing so you'd think the asset would increase in price over time. That said, population isn't growing that much - prices in a city like Toronto have reached epic proportions fueled by a combination of speculation and foreign investment. To me, the problem lies in the fact that we are living in a highly leveraged economy. Will that ever stop? Doesn't seem like it.
You seem to be fundamentally ignoring the simplicity of supply and demand. If people could offer container housing legally, they would. However, they can't so the supply of legal housing is constrained. This drives the price up.
The same applies to any protectionist laws the greater fuckwad property owners in the area introduce. Nobody wants to see their property value diluted so they vote against every single housing measure as long as the demand is there.
Housing follows the laws of supply and demand like everything else.
Certainly not like everything else. The demand for housing is a function of (amongst other things) how easily people can borrow the money to pay for one, how much the interest on that debt is, and what they guess is going to happen to prices in the future. Under simple primary school "supply and demand" economic theory, increasing price leads to a reduction in demand, but it's common to see increases in house prices lead to increases in demand, and vice-versa. To simply say that housing follows supply and demand is such a simplified view that it's more wrong than right.
Sorry, you are confusing cause and effect. It's a common mistake.
The housing prices increasing means demand had already gone up. An increase doesn't leaf to more demand. If people were paying increased prices, it means the demand has increased enough for the seller to make the sale at the inflated price.
Yes it does. People see prices going up. They see the front page of a tabloid paper declaring it repeatedly. They panic about "missing the boat" and other such. They see people who did buy sitting on sudden equity gains, and they want some of that. They were going to wait, but now they won't. They stretch, and go out and buy. Extra people deciding to buy increases the demand, which then increases the prices again. Lenders see their balance sheets looking better and better as their debtors' equity increases, so they can lend more and at lower interest rates. The increasing house prices have led to an increase in mortgage availability which leads to more people able to buy houses which increases demand again. Increasing house prices increase demand increases prices increases demand, right up to the point where enough people simply cannot get the mortgage necessary.
As markets crash and people see prices dropping, they decide not to buy. They will wait until next month/quarter/year, when prices will be cheaper still. They also flinch at the idea of negative equity, especially if they remember it from the last crash. Demand drops. Falling prices makes lenders demand higher deposits to protect themselves from dropping house prices, so people who could buy suddenly can't; the falling prices cause a drop in demand. Mortgage lenders watch their debtors equity vanish and find themselves compelled by balance-sheet regulations to change their lending; the falling prices causes a drop in ability of people to get a mortgage, so demand drops. Often, the lop-sided economy suffers from the crash and people have less money so they can't spend so much servicing a mortgage, so demand drops. Decreasing house prices decrease demand. Housing is also one of the few things non-investors buy that they call an investment. Watching the biggest potential purchase they will ever make bleed makes it a much less attractive "investment". Demand drops. Falling house prices lessen people's interest in buying a house. Falling house prices cause lower demand, which causes lower prices which causes lower demand.
But this is crazy. Surely this would lead to some kind of endless boom-bust cycle in house prices.
You've just wasted a lot of space describing supply and demand. The same thing applies to any commodity or potential investment vehicle. People buy gold when they think the price will go up, which increases demand and therefore the price. There is nothing special about houses other than the fact that you can live in them.
The point I'm making is that the supply that most affects house prices is not the supply of houses, so to say it's "supply and demand" and stop there is to imply heavily that the supply in question is the supply of houses. Which is wrong.
commodity
Houses AREN'T commodities. Commodities are, by definition, fungible. Houses are not fungible. If you are thinking of houses as a commodity, and trying to apply the rules of commodity economics, that is a large part of your misunderstanding.
There is nothing special about houses other than the fact that you can live in them.
That's also not true. Something funny happens inside people's heads with houses. They will go to stupid lengths and put themselves into ridiculous situations in order to get one. People who would drop any other investment with the same characteristics like a hot potato somehow can't see it when it's a house. They're not like "any commodity or potential investment vehicle" (not least because they are NOT a commodity, as explained above), and to say that they are is wrong.
As it is, I'm presenting a lot of argument and you're going "nu uh, nu uh, you're wrong". Do you have anything other than just saying "nu uh", or is that the limit of your argument? If this is a fundamental axiom for you that simply cannot be argued, just say so.
I think this is half the problem for the backlash:
"“What’s their incentive to hustle if you pay them so much?” Ms. Brajcich said they asked."
It relies on the assumption that the only motivation people would have to work, is that they will be homeless if they don't. I think the idea that you can work towards something bigger than you is a foreign concept to the majority of people.
I have noticed that lots of the people who are rich enough to relax for the rest of their lives work very hard. This has always made me suspect that without the motivation of survival tokens, boredom would still keep society running just fine.
If you are being overpaid (in some sense), you might work harder than before because you have more to lose if you get fired. Any alternative job would most likely come with lower pay.
Several employees who stayed, while exhilarated by the
raises, say they now feel a lot of pressure. “Am I doing
my job well enough to deserve this?” said Stephanie Brooks,
23, who joined Gravity as an administrative assistant two
months before the wage increase. “I didn’t earn it.”
(edit) I understand the gut feeling of unfairness from the people who were already earning more than $70K, but some of the quoted assume their fellow employees who got raises "for nothing" will just slack off, and that shitty attitude seems to underscore a class division.
I think they assume correctly. I know all sorts of people who are extremely well paid who spend at least 30% of their time just waltzing around the office and chatting with people. Some people are just entitled &/or clueless.
But in life, you can play to defend what you have or you can play to move into something else. It's unusual for a good offense to also be a good defense, regardless of any cliches.
The departure of most values employees is not surprising. In their place I'd do the same. I want no part of working in a place where salary is based 100% on politics and 0% on merit.
curious all the quitters said the same thing (if you read the article)
Salaries are based on what the market will bear. Employee performance is extremely hard to quantify, and there's not reason to believe that this changes that aspect of the equation too much.
Seems like people in the US have completely forgotten that collective bargaining was a key piece to advancing workers' rights.
I could point out, as others have, that he knows better than you do what's "best for the company"; that people who are under financial stress have been proven to be significantly worse at intellectual tasks; that by erasing his employees' worries about rent and student loans and feeding the kids, he could be dramatically increasing their productivity and thus improving the company's bottom line in the long run.
But I shouldn't have to do that, because I shouldn't have to make an economic argument for being a decent human being. I mean, Jesus Christ, come on.
One scenario this article doesn't address is a situation where an employee who previously earned a lot less comes to rely on the higher salary and adjusts his/her expenses accordingly, but then for whatever reason ends up having to look for another job, which is unlikely to pay nearly as much.
I'm guessing that while the situation would be extremely unfortunate, the overall higher income should still help cushion the blow, provided the money was not completely spent, and leave that person better off.
I'm not sure if you realize that the poor hold on to a ton of debt in this country, and a large part of it is their inability to dig themselves out of the holes they're in.
Now, it is true that financial literacy is tends to be low among those who make little, but it is also the case that many people who are financially literate, but poor, just can't dig themselves out of debt. Medical expenses, for instance, are one of the leading costs of bankruptcy in this country.
Better to give everyone the same % raise, out of your pocket, then create a reason for jealousy and other silliness within the company. It seems irrational for someone to care about what other people make. As long as you're OK in absolute terms, what does it matter? But I've seen people get really pissed and quit over the perceived slight of a coworker getting a nominal bonus that was not "deserved".
Something I hadn't seen discussed with much clarity is what happened to the employees who were already making 70k+? If I was working there making that much, would I see a similar percent increase? If not, then I'd be pretty angry about the situation and would probably leave as well.
I think part of it is that what you get paid is mostly based on your experience and skill set, as well as what you bring to the company. Let's compare a customer service rep and a web developer. They're both important parts of the company, but one has a highly specialized skill set that takes a while to develop, while the other person answers the phones. The developer has taken the time to invest in themselves professionally so that they could be a higher earner. The customer service rep needs about a week of training. To put them on the same pay grade seems unfair and illogical.
Some of the comments on the NYT piece touch on this -- that higher-earning, hard-working employees were off-put when their "just-barely-cruising-along" employees were receiving the equivalent of a promotion.
I probably would leave, but mainly because I feel that by paying most of the employees the same amount, the company is showing they don't value the employees who are actually worth more to the business. This shows poor management in my opinion. If they had increased everyone's wages accordingly by the same percentage I would feel differently.
Something I hadn't seen discussed with much clarity is what happened to the employees who were already making 70k+? If I was working there making that much, would I see a similar percent increase? If not, then I'd be pretty angry about the situation and would probably leave as well.
I think part of it is that what you get paid is mostly based on your experience and skill set, as well as what you bring to the company. Let's compare a customer service rep and a web developer. They're both important parts of the company, but one has a highly specialized skill set that takes a while to develop, while the other person answers the phones. The developer has taken the time to invest in themselves professionally so that they could be a higher earner. The customer service rep needs about a week of training. To put them on the same pay grade seems unfair and illogical.
Do you know what happens when Paul McCartney gives to charity and charity leaks his name? He cancels the donation. That's how you do good deeds when you genuinely want to help people and not pull a little PR on a side.
If this guy wanted to help his under-40K employees, there were multiple ways to do it (a) quietly (b) without pissing off other people who worked for him. I don't know if it's a poorly throught through PR stunt or if it's just a vanity / mid-life crisis thing, but it sure wasn't executed smartly.
>I don't know if it's a poorly throught through PR stunt or if it's just a vanity / mid-life crisis thing, but it sure wasn't executed smartly.
Or he just wanted to do what he thought was the right thing. I hire day laborers through a local service on a regular basis. I pay the workers directly and I am supposed to give them $9 an hour. I typically pay them $15-$20hr an hour at the end of the day.
This is ridiculous. Any change in pay structure is going to cause someone to get the short end. Who doesn't want more money? Who doesn't have getting less?
One thing's for certain: there's a whole bunch of people who are butthurt about lower class people getting more money. Wonder what that reflects about them...
The part that bothered me was the fact that the Web developer made 40K to start, and he worried that getting a boost to 70K might make him too satisfied to better himself. I was under the impression that west coast salaries where a bit higher.
Giving the same raises as secretly as possible would avoid a whole lot of trouble. If it was considered important to announce it, it would work much better if done after a couple of years when at least you could claim that it proved itself and customers wouldnt have to worry about its impact on pricing.
Giving the same raises as secretly as possible would avoid a whole lot of trouble. If it was considered important to announce it, it would work much better if done after a couple of years when at least you could claim that it proved itself and customers wouldnt have to worry about its impact on pricing.
Wouldn't a simple stated policy of having generous compensation have been sufficient without creating all the problems from the blunt, arbitrary minimum?
The cool thing about how incentives work: instead of being angry that relative slackers are now making $70K, be happy that when they are fired, they will be replaced from a pool of hopefuls an order of magnitude larger then when the company had to settle on hiring those slackers in the first place.
It's funny how libertarian conservatism gets apoplectic when wealthy people make the wrong choice. Then they get all "Virtue of Selfishness" on your ass.
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[ 4.0 ms ] story [ 157 ms ] threadThe higher earners receive a larger increase than they would have under a different regime (where everyone receives a constant $ increase [normalized for the "lowest earner"]).
I hope CEOs don't use the same thought process to keep their pay at 300x their minimum wage workers when the minimum wage is raised to $15.
For many people, it's about the relative ranking of their worth as a person.
Whether you agree or disagree, that's how I think those who are offended by this sort of change see it.
In some respects they ARE taking my money ... the company now has less money to distribute based upon merit.
Also, I would immediately become a 9-5 employee and enjoy my weekends like my now equally paid peers.
I mean if the market rate for the job you were doing is $70k, and all of a sudden fresh college grads are getting paid that at your company, it doesn't mean that you'll now get $100k elsewhere if you leave. If that is the case, you should have already left.
Now if you were already being underpaid and you were staying at the company for some other reason I could see bailing when others got a pay bump regardless of their contribution.
To the point the person you responded to brought up though:
Those years of sacrifice could have been compensated through equity grants instead.
It's interesting how disingenuous conversations can become on HN. Where in one thread everyone will happily acknowledge that lots of developers work extremely long hours at startups for peanuts (in hopes of a possible big future payday) compared to what they could make guaranteed going to work at a larger established company, in another thread the mentality is that everyone is always optimizing for short term earnings.
Don't force your value system on others.
I personally am happiest when I'm working 70-80 hours a week and appreciate being compensated for my hard work. Just because that doesn't describe you doesn't mean I should be forced to attain an artificial "balance."
No, but I would start looking for another job. If the company has the excess profit to be giving out huge raises, I'd be upset that those raises were allocated only to low performers.
Secondly, Ensorceled specifically said (s)he would start "enjoying the weekends", which implies the long hours were, unlike for you, not being particularly enjoyable.
Don't be so certain that the company will be sad to see you leave. The people who replace you might be even better than you.
There were a number of people making less than that at Gravity Payments; so it seems likely that there are other qualified people in the area who will appreciate the salary that you are now grumpy over.
In fact, apparently 1000s are applying to Gravity Payments hoping to take any grumpy person's job.
So if you are grumpy and 9-5ing it (as you said); why should Gravity Payments keep you?
How would your stated attitude help you work with people who did get a raise?
This kind of attitude is toxic.
1 - My productivity is X per month. (Whatever your definition of productivity, it must be, because I can ask for a bigger salary.) 2 - This other guy productivity is X/2 per month. (By the same rationale.) 3 - The other guy gets a raise, and now is paid twice for the same work. 4 - It follows that I'm losing the opportunity of a raise, because I do more than him.
It's not logically rigorous, it may not be true at all, but it's not an irrational reaction either.
Do you not understand the logic of people who feel that way, or do you simply not believe in it yourself? If you were getting paid $35k/year to do the same job as everyone else who was getting paid $115k/year, would you feel that it was somewhat unfair?
So, what you are really asking is: If you were getting paid $115k/year to do a job where $115k/year was the normal competitive salary in your area, would you feel that it was somewhat unfair?
I ask this because I wonder what would have happened if he'd not said anything.
^ How in the world did you come to that conclusion? oh_sigh's whole point was that a person would be upset if they knew they were getting much less compensation than others for the same kind of job.
I'm guessing you had a point there, but I'm not sure how the quoted phrase above is supposed to support whatever the point was.
:-D
Well, yeah. But that assumes you know what other people are getting. As I said, I'm assuming most people don't know or share what they are making (at least in the US) with their coworkers.
So, for the average person, this really comes down to the question I asked as most people don't know what others are making (again, total assumption on my part).
And that all comes down to my last statement in my original comment, which I guess is really just a way of saying "ignorance is bliss." And if you are ignorant of what others are making, the question is really as I put it: If you were getting paid $115k/year to do a job where $115k/year was the normal competitive salary in your area, would you feel that it was somewhat unfair? Don't assume $115k/year is higher or lower (you don't know).
I'm not pushing an agenda or anything. Just really wondering.
The impact? Nothing at all.
The only situation where I would be concerned about it would be a case where the company discriminating against people or aggressively ripping the employees off. I've witnessed both.
The big argument here is that the 10x producers are pissed off about others benefiting. The reality is that most of these "10x" people are mythical, and the ones who are real are either getting screwed anyway or make a salary consistent with their value.
There are times when that can be part of the problem.
But it can also be part of the solution, when e.g. the problem is discrimination, lack of consideration for the not-so-squeaky wheel, etc.
Also, it does impact you directly. As those around you get paid more, there is more disposable income which impacts pricing. Now, a hundred employees in a large city has zero actual impact, but the psychological resistance is already there because it will have an actual impact at larger scale (also could impact if there is a company store/cafeteria or such, but I don't think that applies here).
Then there is the notion of unequal raises. If someone else gets a 200% raise because the company has enough money, you are left wondering why you didn't get one. Did you not do good enough? Even if you already had a raise, if it was for some other reason, you are left wondering why you don't get one. Once again, even with a rational reason (because you were already making above the new minimum), the emotional damage is still there. Such a raise doesn't feel fair, regardless if it is or isn't.
Finally, considering how many times people are denied wages 'because the money isn't in the budget for it' (even if that is just used as an excuse), there is a chance one who deserves a raise can be denied it because the budgeted money for raises was already spent on other raises.
I think that was in the article. If you work your ass off sacrificing your personal life for years helping build a company, at most companies there is a financial payout at some point for that hard work, but in this case, the money resulting from that hard work it seems is largely going to top up the incomes of the nine to fivers. I don't see how it's hard to understand that some people would be upset about these, it's pretty simple math (actual hourly pay based on hours worked).
It's not that simple. The employees were already working under conditions that job/person a was worth 2x and job/person b was worth 3x. That was established and everyone was content (or reasonably so).
All of a sudden, someone declared that job/person a is worth 3x too, with no corresponding change to the output or expectations of either job.
Job/Person b, having been previously told that their value was, at 3x, MORE than job/person a, is now told that their value is now equal.
That's a redefining of the previously established contract of understanding. To expect Job/person b to completely agree to that redefinition is rather naive, to say the least.
I'm more valuable to my company as their key software developer than the receptionist. I've got more knowledge of how the company works, contribute more to the bottom line and am harder to properly replace. I expect my compensation to reflect that.
If you suggest all of a sudden that I'm not any more valuable than the receptionist hired last month, you should rightly expect that I'd be a little pissed.
What this guy tried to do is in effect just raise the floor of the minimum wage, which is also unfair to you.
My assistant is ridiculously valuable. She's a multiplier for the team. Her presence means invoices get paid, visitor logistics are taken care of, contracts get renewed, the office is in order. I don't control her pay, but every hour she is present easily saves me a quarter hour, and probably saves my direct reports a similar amount of time.
Essentially that role for me is manufacturing an asset that I cannot buy -- time. If I could control her salary, I would double it.
Look, I understand the value of a really good personal assistant, at times they can be like magic, but let's be serious, all jobs are not equally difficult.
On the other end of the scale, the maximum price is value of her productive output to the company - it is irrational to pay her more than she can generate.
Negotiation is the skill of convincing your employer that you're harder (ie, more expensive) to replace, thus propelling your pay closer to that maximum.
Then leave.
Seriously. If you are so upset then leave.
But when interviewing, you might want to come up with a different reason for leaving the job. The interviewer might not be so understanding.
Update: wow, a downvote. :-) I welcome the downvotes.
Be happy for them.
Be happy that they can now afford to get married.
Be happy that they can now save money to buy a house.
Be happy that they can now save for their kid's college education.
Be happy that you work for someone who cares so deeply about his employees and will be there for you when you need help.
All else being equal, people were happier earning $70,000 knowing that their peers earned $50,000, and unhappier earning $90,000 knowing that their peers earned $110,000.
I am likely wrong on exact numbers, but studies are well-known enough to be quoted in "Fooled by Randomness", "Predictably Irrational" and some other pop-psych titles.
When I used to work in Denmark, I noticed expats were often much more annoyed about the (approximate) wage equality than Danes were. I was making $80k or so, and most people I knew were making in the $70k-$100k range, doing jobs ranging from professor to software developer. Meanwhile, a typical full-time restaurant waiter or construction worker might make around $50-60k. So, we had higher incomes, but not by a huge margin, certainly less than the spread would be in the US. Many expats found this grossly unfair, that despite them having a high-status and supposedly high-end job, they were still in approximately the same socioeconomic class as basically any other worker. They considered themselves underpaid, and the other workers overpaid. But most Danes didn't really see an issue, and considered the Danish wage spreads to be normal.
Question to you: how does others who used to earn less than you now earning the same as you affect you?
My guess is the latter.
The argument against minimum wage increases is that it has a ripple effect and raises other wages as well.
CORRECTED: The argument IN FAVOR of minimum wage increases is that it has a ripple effect and raises other wages as well
Here are inflation figures for the UK from 1990 to 2015:
http://www.rateinflation.com/inflation-rate/uk-historical-in...
Can you spot the year that minimum wage was first introduced in the UK?
- Prices of products or services increase to compensate for the increase in salary.
- Higher paid employees don't get raises since the money that was previously allocated for that is being used to pay for the minimum wage increase. (This seems to be happening in this case, where more experienced workers received little to no increase in compensation).
- Other benefits are removed or reduced to cover the additional cost (health insurance, vacation, sick leave, etc)
- The company can no longer be profitable with the additional costs and reduces the size of their workforce or shuts down completely.
Which of these side effects (if any) occur, depends on the company and its current profits, management and/or investors, as well as how much they are already paying employees.
[0] http://www.ritholtz.com/blog/2015/07/chipotle-spices-up-the-...
I can totally defend the desire to quit out of not wanting to have golden handcuffs, but quitting because someone "below" you is now not as far "below" you (or is now "shackled" to you, a ridiculous thought) is just spiteful and self-damaging.
I wonder if on the grave marker of humanity it will not read "THEY CARED TOO MUCH ABOUT SOCIAL SIGNALLING". The Universe is far too personal (and, curiously impersonal at the same time ) to care about whether other people are "winning". They'll get theirs, you'll get yours.
I also wonder how much of the issue is because it was in some respects a publicity stunt. If instead it had been quietly phased in over two years, I doubt there'd be as many negative ramifications.
[0] https://en.wikipedia.org/wiki/Crab_mentality
Are the crabs aware of their situation? Are they actually consciously preventing the other crabs from escaping? Or are they just trying to grab on to anything they can get get out of the crab-pile?
Seems like a deeply flawed metaphor that will likely lead you astray.
Like, if a human meerely intends "to grab on anything they can to get out of the [human]-pile", & they're quite rude/destructive while doing so, they're still rude/destructive regardless of how sympathetic we may judge their intentions to be.
>is a phrase that describes a way of thinking best described by the phrase "if I can't have it, neither can you."
>Individually, the crabs could easily escape from the pot, but instead, they grab at each other in a useless "king of the hill" competition which prevents any from escaping and ensures their collective demise.
An interesting question would be "if you could go back in time would you do it all over again?" (PR and ego would probably indicate "yes" but we would never know the real truth).
I'm mostly saying he should have thought it through more, even if he did go through with it.
[0] - Tax Credit for Businesses That Share Profits - http://www.nytimes.com/politics/first-draft/2015/07/16/profi...
We shouldn't let this be the norm, these employees complaining or those who quit are angry that their "inferior" coworkers are getting the same wages.
That really pissed me off. When the gas prices were high, then the damage to the economy was clear—everyone was paying more, prices for everything across the board were going up, because the cost of doing everything went up.
And then when prices dropped? Suddenly it was "bad for the economy". I'm sure there were companies it was bad for—specifically, the companies that were riding high when prices were gigantic. But for the rest of the economy, it was a breath of fresh air.
WTF? Low gas prices are almost uniformly good for the economy. The only companies it isn't good for are oil companies. And they make so damn much money no matter what that it really doesn't hurt them very much.
https://news.ycombinator.com/item?id=9371854
I'm still not sure how a CEO of a profitable company electing to pay his employees more becomes a political debate. If it fails, perhaps it's a failed experiment in Capitalism? It's not like anyone is forcing the business owner to do this.
Theoretically, economics would dictate that by paying people $70K who would get paid $40K would make them fight like crazy to keep their jobs, wouldn't it? And if that's the case, wouldn't one conclude that their productivity would increase, and the company would be much better off? Unwise investment? Perhaps. Unbridled "Socialism?" Definitely not.
http://www.rushlimbaugh.com/daily/2015/04/15/ceo_buys_short_...
The thing is, like most words in English, "socialism" has taken on multiple meanings. Like it or not, there's the "textbook" definition and then then colloquial usage. And in America, "socialism" has come to refer to anything that involves redistributing wealth, providing social safety net(s), or otherwise trying to actively manage social inequality. It's a broader, more expansive definition, and I understand why purists hate seeing words diluted, but what can ya do? You can't put the horse back in barn, that ship has already sailed, can't un-ring a rung bell, etc., etc.
People call it socialism because a starting salary of 70k is likely to be uneconomic. Ie the cost of the employee is set above their value to the company. This is done at the expense of other stakeholders (ie management and investors, possibly other employees who would be paid less).
That's kinda the basic premise of socialism - whereby an employee's salary is dissociated from the economic benefit they bring.
Ie the backlash is because he chose to set everybody's salaries fairly high, regardless of seniority, etc.
I thought employees were generally paid by their market rate, i.e. how much it would cost to replace them, which is not necessarily related to their value to the company.
The basic premise of socialism is that the means of production are in social ownership. Paying employees based on the economic benefit they bring is not contradictory to socialism.
People call this socialism because, after so long hearing the term bandied about as a catch-all fear word, they simply apply it to anything that doesn't match their view of the one true God's own capitalism.
Ie that was the socialism as it was practiced 'on the ground' (which was in no small part responsible for why USSR economy collapsed).
My salary has never been set by my value to the company - it has been set by my ability to negotiate.
It depends on the CEO's reasoning for paying the employees more. If he paid them more for economic reasons, reducing turnover, or incentive pay for increased performance, or a retention bonus or something like that then it's capitalism. If he paid them more because he's moralising about society, or out of pity, or fear of some kind of social backlash, then I would say it's socialism that motivated it.
Okay after reading the article, I would agree with Rush's take on calling it socialism.
From the article, it sounds like his business had a host of employees below and above that threshold, and the ones above felt resentful and unappreciated, with some people quitting. Remains to be seen if it will have any effect on the business, but it's the people above that level that tend to do non-trivial work, and are harder to train and replace.
I like to consider myself a regular at my neighborhood council's meetings (NE Seattle). When the city shows up to present development plans, only older generations who feel somewhat entitled to their neighborhood's "culture" show up and berate the plans. At the last one, some lady was pissed because a new apartment building might block partial sunlight in her yard, which is apparently more important than 400 market priced units becoming available in a city starved for housing.
Then these same people get upset at Amazon (I have no affiliation) for bringing in tech money and causing a massive housing shortage. They then allow their short term memories to forget what a shithole South Lake Union was before Amazon bought and developed on the land.
Now, I can imagine saying things like "The progress will only happen once all the people who grew up with things being the old way die off," especially with things like interracial or gay marriage, but I don't think that applies to something like housing. Whoever owns the current houses will never want more houses built; that will only drive down the value of their property. It may be true that the people who own those homes are usually older, but that will not end when they 'die off'.
Consider, however, that when an elderly person dies their assets,in this case houses, are usually sold off, which might be enough for a builder. It's not the core tenant of my argument, but it's something I'd never thought of before.
But NIMBYism and status-quoism is not just a liberal issue, and "not changing the neighborhood" is right in line with the definition of "conservative", which means a preference for how things already are and against risky changes.
Trying to squeeze any question into a "liberal-conservative" split just muddies the issue.
Regardless of dictionary definitions, if we agree that building restrictions are a bad policy, it is a valid and IMO interesting empirical question whether most people supporting it self-identify as liberal, conservative or something else. (I honestly don't think I could guess the answer.)
Yeah, there really is a need to toss "liberal" in there. More liberal dense cities seem to have this problem much worse than dense less-liberal cities. Qualifier: American cities.
Some of it tends to be due to liberal reflexes (participatory democracy at all levels, favoring small local groups of activists over people who stand to profit, etc.) that backfire writ large. Add in a distrust of markets, and you have a recipe for disaster. San Francisco is a great example.
By the way, conservatives would not object to developing a neighborhood if that development meant more economic opportunities and more jobs.
If you want to split hairs over a dictionary definition, conservatives would prefer to keep things how they are and continue economic growth through expanding the private sector rather than expanding government to direct businesses on how to operate.
I'd argue you're mostly getting cause and effect backwards: places end up with lots of high rises because they're the most economically productive localities. Obviously at the margin another high rise will lower prices a bit, but the rate at which we'd be able to build them in SF sans restrictions would at most keep prices stable year-on-year. Which isn't nothing, but it's important to be clear that no one making, say, $80k a year will ever be able to purchase a house or condo in San Francisco, regardless of our policy choices.
Do you have any citations for this? It's unexpected to me. What's the limiting factor?
I'm still struggling to understand the scarcity aspect of housing. Supply of land isn't increasing so you'd think the asset would increase in price over time. That said, population isn't growing that much - prices in a city like Toronto have reached epic proportions fueled by a combination of speculation and foreign investment. To me, the problem lies in the fact that we are living in a highly leveraged economy. Will that ever stop? Doesn't seem like it.
The same applies to any protectionist laws the greater fuckwad property owners in the area introduce. Nobody wants to see their property value diluted so they vote against every single housing measure as long as the demand is there.
Certainly not like everything else. The demand for housing is a function of (amongst other things) how easily people can borrow the money to pay for one, how much the interest on that debt is, and what they guess is going to happen to prices in the future. Under simple primary school "supply and demand" economic theory, increasing price leads to a reduction in demand, but it's common to see increases in house prices lead to increases in demand, and vice-versa. To simply say that housing follows supply and demand is such a simplified view that it's more wrong than right.
The housing prices increasing means demand had already gone up. An increase doesn't leaf to more demand. If people were paying increased prices, it means the demand has increased enough for the seller to make the sale at the inflated price.
An increase doesn't lead to more demand.
Yes it does. People see prices going up. They see the front page of a tabloid paper declaring it repeatedly. They panic about "missing the boat" and other such. They see people who did buy sitting on sudden equity gains, and they want some of that. They were going to wait, but now they won't. They stretch, and go out and buy. Extra people deciding to buy increases the demand, which then increases the prices again. Lenders see their balance sheets looking better and better as their debtors' equity increases, so they can lend more and at lower interest rates. The increasing house prices have led to an increase in mortgage availability which leads to more people able to buy houses which increases demand again. Increasing house prices increase demand increases prices increases demand, right up to the point where enough people simply cannot get the mortgage necessary.
As markets crash and people see prices dropping, they decide not to buy. They will wait until next month/quarter/year, when prices will be cheaper still. They also flinch at the idea of negative equity, especially if they remember it from the last crash. Demand drops. Falling prices makes lenders demand higher deposits to protect themselves from dropping house prices, so people who could buy suddenly can't; the falling prices cause a drop in demand. Mortgage lenders watch their debtors equity vanish and find themselves compelled by balance-sheet regulations to change their lending; the falling prices causes a drop in ability of people to get a mortgage, so demand drops. Often, the lop-sided economy suffers from the crash and people have less money so they can't spend so much servicing a mortgage, so demand drops. Decreasing house prices decrease demand. Housing is also one of the few things non-investors buy that they call an investment. Watching the biggest potential purchase they will ever make bleed makes it a much less attractive "investment". Demand drops. Falling house prices lessen people's interest in buying a house. Falling house prices cause lower demand, which causes lower prices which causes lower demand.
But this is crazy. Surely this would lead to some kind of endless boom-bust cycle in house prices.
commodity
Houses AREN'T commodities. Commodities are, by definition, fungible. Houses are not fungible. If you are thinking of houses as a commodity, and trying to apply the rules of commodity economics, that is a large part of your misunderstanding.
There is nothing special about houses other than the fact that you can live in them.
That's also not true. Something funny happens inside people's heads with houses. They will go to stupid lengths and put themselves into ridiculous situations in order to get one. People who would drop any other investment with the same characteristics like a hot potato somehow can't see it when it's a house. They're not like "any commodity or potential investment vehicle" (not least because they are NOT a commodity, as explained above), and to say that they are is wrong.
As it is, I'm presenting a lot of argument and you're going "nu uh, nu uh, you're wrong". Do you have anything other than just saying "nu uh", or is that the limit of your argument? If this is a fundamental axiom for you that simply cannot be argued, just say so.
It relies on the assumption that the only motivation people would have to work, is that they will be homeless if they don't. I think the idea that you can work towards something bigger than you is a foreign concept to the majority of people.
curious all the quitters said the same thing (if you read the article)
Salaries are based on what the market will bear. Employee performance is extremely hard to quantify, and there's not reason to believe that this changes that aspect of the equation too much.
Seems like people in the US have completely forgotten that collective bargaining was a key piece to advancing workers' rights.
But I shouldn't have to do that, because I shouldn't have to make an economic argument for being a decent human being. I mean, Jesus Christ, come on.
I'm guessing that while the situation would be extremely unfortunate, the overall higher income should still help cushion the blow, provided the money was not completely spent, and leave that person better off.
Now, it is true that financial literacy is tends to be low among those who make little, but it is also the case that many people who are financially literate, but poor, just can't dig themselves out of debt. Medical expenses, for instance, are one of the leading costs of bankruptcy in this country.
Is your hypothesis that the higher income, even if temporary, may afford significant relief from this?
I think part of it is that what you get paid is mostly based on your experience and skill set, as well as what you bring to the company. Let's compare a customer service rep and a web developer. They're both important parts of the company, but one has a highly specialized skill set that takes a while to develop, while the other person answers the phones. The developer has taken the time to invest in themselves professionally so that they could be a higher earner. The customer service rep needs about a week of training. To put them on the same pay grade seems unfair and illogical.
I think part of it is that what you get paid is mostly based on your experience and skill set, as well as what you bring to the company. Let's compare a customer service rep and a web developer. They're both important parts of the company, but one has a highly specialized skill set that takes a while to develop, while the other person answers the phones. The developer has taken the time to invest in themselves professionally so that they could be a higher earner. The customer service rep needs about a week of training. To put them on the same pay grade seems unfair and illogical.
If this guy wanted to help his under-40K employees, there were multiple ways to do it (a) quietly (b) without pissing off other people who worked for him. I don't know if it's a poorly throught through PR stunt or if it's just a vanity / mid-life crisis thing, but it sure wasn't executed smartly.
Isn't that literally un-doing a good deed?
Or he just wanted to do what he thought was the right thing. I hire day laborers through a local service on a regular basis. I pay the workers directly and I am supposed to give them $9 an hour. I typically pay them $15-$20hr an hour at the end of the day.
One thing's for certain: there's a whole bunch of people who are butthurt about lower class people getting more money. Wonder what that reflects about them...
The answer to both questions in this case was:
The money came from his paycheck.He may or may not be right, but if shaking things up even outside his company was the intended effect, mission accomplished.
It sounds like the dev was inexperienced which is why he was talking about improving skills to work at a tech company.
It's funny how libertarian conservatism gets apoplectic when wealthy people make the wrong choice. Then they get all "Virtue of Selfishness" on your ass.