This is almost 100% true. My friend was interviewed and was offered the job. In spite of all the articles that said everyone gets paid $70K, he was offered $65K. He tried negotiating his salary but they would not budge. If I'm not mistaken, they cited that his position was a special case. Regardless, my point is that the minimum salary is not $70k.
I find this a little hard to believe as you described. A company whose main reputation based on a $70k minimum is going to throw that away over a measly $5k a year?
Was your friend a contractor? Did he require a work visa? Was he based in the US and working at their office? Was he actually being directly employed by them or through an intermediary?
That reputation is probably exactly what someone in the chain relied on to make a few exceptions... because skepticism will drown out these exceptions quickly...
Just a random thought. I don’t know the company or the parent in anyway so I am neither supporting nor dismissing anything.
It’s an old story. And a good one! I’m glad TFA acknowledges the huge PR benefits that accrued for doing this. It’s amazing actually we’re still here talking about it.
In certain businesses, there’s actually a lot to be said for only being willing to hire a person who can provide at least $70k of value.
It’s also a bit of a misnomer to laud the owner of a company and 100% of its equity for taking a salary cut.
All that said I think that greed and what I’ll call “celebrity” drives the income disparity between the median and the 90th percentile workers’ salaries at a given company far too high.
As an aside, this sentence was so tongue-in-cheek it was jarring;
> Jody Hall, a good liberal who worries about income inequality, owns a nearby cafe, Cupcake Royale. She chooses Gravity to process her payments, admires what Price has done and offers her own employees health care.
I’m not sure of numbers but I’d imagine a 70k salary would mean higher than purely salary costs (depending on company industry etc) after other expenses
Typical burdened labor rate is 1.3x to 1.5x of annual salary. Exceptions exist, but usually it’s clear why that’s the exception (e.g., exceptionally generous benefits for a competitve labor category, local laws, etc.).
in the US, there will be an extra ~10% above that for FICA/unemployment. The company will probably shell out another ~$12k for health insurance (I'm speaking averages here - I know some companies are very generous, and others aren't). Factor in some x% salary matching in to a 401k - say another 5%, and perhaps some other perks. Let's say there's another ~$20k on top of the $70k - that $70k employee may cost the company $95k.
If you then want to apportion office/equipment costs, you can do that too, but that $70k employee is not costing $140k (unless, perhaps, they're being very generous with some shares and there's a cost associated with that, and perhaps tuition reimbursement, company car and some other perks on top of what was mentioned above... maybe). Those sorts of things aren't generally given to someone in the US making $70k.
To be honest, my number was based on my rembering of opinions from people who were in management but were certainly not experts on HR budgets or something. So it could be very wrong
It’s incredible to me how simple it is to attract and retain dedicated, talented employees: pay them. You can see this clear as day when you walk into an In-n-out vs. a Mcdonalds, Chick-fil-a vs. KFC, or Target vs. Walmart. The employees are almost universally happier, friendlier, more efficient, and willing to go the extra mile to help you out. It’s not about some sense of moral righteousness, it’s just good business sense.
While I generally agree with the sentiment there is no such thing as a labour shortage, only a pay shortage, money is not a panacea.
For one, people's expectations change. I couldn't count the number of times I've seen a Bay Area software engineer 4 years out of college genuinely believe they're justified in complaining about their lot in life because they can't afford a 5 bedroom house in Palo Alto, all the while being driven around and being fed for free by workers making $20 an hour who have to try and live in the same area.
Look at the obvious internal strife at places like Google over efforts like Maven and Dragonfly. If it was just money motivating them, would you see that? Would you see people who leave over it?
It's the "Keeping up with the Joneses" problem, but nowadays the Joneses are flashing their material wealth on Instagram (and they don't tell you if it's real or faked).
"I want a house." isn't exactly yacht envy. It's a standard expectation in most of the country. Having a high-paying job in an extremely high cost of living area makes the economics weird. You're not rich until you can save up a bunch of that money and escape.
> I couldn't count the number of times I've seen a Bay Area software engineer 4 years out of college genuinely believe they're justified in complaining about their lot in life
I don't believe you.
I believe that there are people like this saying they could probably demand more money, and also that they may be commenting on how ludicrously high housing costs are in the bay area, and how that makes it hard to afford to buy a house even on a very high nominal salary.
But I find that comments like this are usually exaggerating others' sense of entitlement. Certainly it's very common in the CS career subreddit that I moderate. And having grown up in the bay area and worked at Google in the bay area...I just haven't seen many, if any, devs this entitled-sounding. So no, I don't believe you've hit this mega-entitled doucheperson "more times than you can count".
A sense of entitlement about housing reflects expectations that are about 7 years out of date (i.e. that ownership of a decent home with a decent commute is reliably attainable through professional success). Not surprising that people are still upset about the freshly amended deal terms. When your 4-year SWE picked their college major, it would still have been a path to the kind of life his parents had.
People are getting driven around because it’s the frugal thing to do. Have you seen what parking costs?
The old complaint of corporations that they can't find enough good staff, a shortage of workers etc always amuses me, because the unsaid part of it is 'at the price we're willing to pay'. Offer more money, you'll get the staff you want/need.
My father works in furniture repair. Company switched to a third party for delivery truck drivers. When it was in house they were being paid time & a half over minimum wage; third party was pretty close to minimum wage. Issues arose: higher turn over rate, higher rate of damage caused during delivery, decreased customer experience dealing with the drivers. Company decided to subsidize the third party's drivers a few more dollars an hour, has helped resolve previously listed issues
Chick-fil-A can be more selective as well. it’s a smaller company with less locations. People want to work there, even without the pay difference. You have a little sense of pride working for them.
Even in the areas where fast food workers get $15 an hour because it’s hard to find workers, they don’t give you any better service.
> It’s incredible to me how simple it is to attract and retain dedicated, talented employees: pay them.
A few years ago my barber opened up his own shop and I asked him why he left his last position. He didn't say anything about pay but rather he didn't like the way the owner spoke with him.
Maybe at some minimum level salary is important. But whenever I hear complaints about employment, they often focus on respect and conditions. Even on the high end (mostly finance types), I hear dissatisfaction despite obscene inflated salaries. And it rarely has to do with salary, but more likely purpose, colleagues, etc. And turnover still remains high.
If higher salaries led to happiness, friendliness and helpfulness, I'd imagine the highest paid professions should have workers that exhibit all these qualities. But my general impression is that this is not true
There's more to it than that. A bad manager is bad, but a good manager in a company badly managed by the senior leadership might have his or her hands tied, too.
This is very true. I really liked my manager at the last job I left, but disagreed strongly with the direction my grandboss and up were taking. If senior leadership is determined to shoot the company in the foot there’s not much that one good manager can do.
I've only ever worked with 1 good manager in my career. Not surprisingly the rest that I did work with who were terrible were the ones which frankly had no business being in IT at all.
They were all the types that because they had a friend or neighbour who advised them on tech matters, meant that they understood the issues and how to resolve them.
Always ended up not lasting more than 18 months at said company.
Although what I took from all those experiences, is how to apply them when talking to 3rd party consultants/teams and getting to the bottom of issues very quickly and finding solutions.
I agree with this in general. In my personal experience, I haven't found this to be true. In the last 15 years, I may have had two managers I would say were bad and I stayed at one for 3+ years for an opportunity that fell in my lap. Other places with good managers I've left after 18-24 months.
I think I've figured out a way to carve a path around bad managers. The reason I typically leave is due to poor upper management. Lack of vision, alignment, or growth opportunities for the company.
I am good friends with someone who is now retired from owning Subway franchises. Over the years he tried rewarding good employees with more money. Every time he did this the employee simply calculated how many hours they needed to work to make the same take home they had before and asked to have their hours cut. So for the business this resulted in higher costs and a worse customer experience because the best employee was doing the work less often. Obviously, there's no moral problem with the employee deciding to work less, in fact it's just wonderful for them. But it's easy to see why employers see it as a net negative in many cases.
You can make decisions that increase profits in the short term but bankrupt the company long term. It’s good business sense to not make those decisions.
Chick-Fil-A has one huge benefit that most don't see at a glance: Sunday's off. It's easy to dismiss this as some sort of imposition of Christian values on workers but in the service industry, it is rare that you're able to coordinate time off very far in advance. With Chick-fil-A workers know they have every single Sunday off no matter how far off in the future their plans may be.
In high school friends who worked there loved it because it meant they knew they could go out on Saturday nights without worry about having a Sunday morning shift. Want to buy tickets for a concert six months away? If it was on Sunday you knew 100% for sure that you could go. Meanwhile I worked at a grocery store and my schedule was different pretty much every week. For people who work M-F jobs, it's easy to forget the difficulty in making weekend plans when you don't know very far in advance what days or hours you'll being required to be at work.
I worked fast food jobs (non Chick-Fil-A) and the scheduling was a nightmare. It would change every single week, and I had one job with a manager that would make the schedule just a few days in advance, and wouldn't text out the schedules. Since she made them on the computer, I suggested she could just email it, and she said it would be "too hard".
sane scheduling would have been the no. 1 thing to improve that job.
Since they are franchised, I doubt there's some standard that applies across all stores. There are news stories about specific franchise owners with high minimums.
The local Taco Bell chain here has a similar program. They are run by a single franchising company which seems to own all of the ones in the areas. So in their case it’s not a TB thing but something for them. Could be wrong, though.
I worked a bit to integrate Gravity payments at a SAAS company I worked for a few years ago.
Aside from the technical aspects, I was struck by how much "Dan Price!" there was in everything I read. Here we have some more.
I think this whole 70k a year thing has been very clever. The guy is getting millions of dollars of publicity for giving about half the company a modest raise...
Not criticizing the guy - he seems kind. And whatever the personal gain he gets from this, he's acting as a "rising tide" here.
“For a while, it wasn’t clear that the gamble was going to pay off.
But eventually it did: Business has surged, and profits are higher than ever. Gravity last year processed $10.2 billion in payments, more than double the $3.8 billion in 2014, before the announcement. It has grown to 200 employees, all nonunion.”
Impossible to know whether this would work in different market conditions, but it’s a good sign. One rationalization could be workers being more productive because they are paid more. I know this clashes with some economic models, but there’s definitely a marginal argument for getting more for paying more.
The Netflix model is the one that I would take if I ever ran a company. Pay every employee top of the market but fire quickly and decisively if they don’t meet very high expectations. Every employee that survives at Netflix is very, very happy and motivated. Their engineering team universally is happy and extremely productive and I think it makes a lot of sense.
Wouldn't you constantly be in a state of fear of losing your income if you for some (not even your fault) reason can't preform top right now? Sounds like a terrible place to work at where the only thing matters is performance and the human is basically a machine which gets switched out if it doesn't perform.
They are looking for a specific type of worker. If you are a good fit, you’re never worried about losing your job. The ones I know at Netflix love it and say it’s the greatest company they’ve worked at. I know someone who was let go after 10 months and he said he hated it.
Paying top of market (in cash, like Netflix) is tough for companies that don't have a very large revenue stream. When you start, if you try to pay Netflix-like salaries, you'll run out of money very fast.
The traditional workaround for startups had been to award equity instead, but for a variety of legitimate reasons, workers these days are cynical about the value of startup equity.
Not necessarily. Hypothetically Netflix might be paying high performers for their roles 1.8.x to do the work of 2 mediocre performers earning who would earn 1x each under a different management style.
Of course it’s not for everyone, but it seems pretty ideal for people that want to focus on work. I personally enjoy having a lot of free time but people are different you know, all jobs are not for everyone.
Why not? If you're good enough to get the job you’ll have no trouble at all getting a new one. You’re probably already fending off recruiters with a stick.
And again, it’s clearly not for everyone, but that’s ok, as long as it appeals to some people. Investment banking is also a terrible job for most sane people, but for a small percentage of the population it’s perfect.
The opinions of 6 people, with known relationships instead of being randomly sampled, out of the population of Netflix developers, is incredibly statistically insignificant.
Opinions of people I know and consider to be friends are of far more importance to me than that of anonymous randos on the internet.
I recently turned down a job offer at a company based upon friend's feedback and went to a lower paying job that had a lot of negative reviews on glass door. So far, at a month in, I havent seen anything backing the negative reviews. I'm happy at this point, and my commute is the best I've ever had. 15-20 minutes door to door.
I would say statistically biased instead of insignificant. Presumably OP associates with very driven people who happen to do well in competitive environments. Glassdoor suffers from the opposite where 100% of people with a grudge go to complain while a smaller percentage of happy people go to write a review.
A fired employee is a bad hiring decision come to fruition. If you find yourself firing a lot of your employees, then maybe you should be looking inward to find the problem.
It’s also expensive to hire people and pay them top dollar while waiting to see if they will fail or not. Again, this is what job interviews are for.
Regardless, employees should be comfortable about their jobs and not feel like they’re hanging under an axe that’s waiting to drop. If there’s a problem with performance, it’s on both the employee and the company to form a solution. Sometimes great employees, for example, can be hamstrung by situations outside of their control. Either within the company or outside it.
Until you stop playing fantasy company CEO and start a real business, at that point you finally would have to learn about the human race and quickly delete your comment on HN out of shame.
I'm curious if that's as simple as it sounds. For example, many employees that could survive the cuts might not like an environment where they are rarely the smartest person in the room, or having to constantly prove you're worth keeping. Or maybe it's hard to find a business model with margins that could support this. Or, does it create a monoculture with other notable issues..."not invented here", and "not doing that scut work" come to mind.
"High performer" in these situations basically means "most popular" or "best at politics". What's more the end result is you end up with positions that are sacrificial anodes. Hire someone for it and your group ever underperforms, blame it your anode, fire them, rinse and repeat.
So pay top rate, completely de-prioritize work-life balance, fire everyone who complains about lack of said work-life balance, and voila, right? I know a few developers that would thrive in this environment, but most wouldn't last. But perhaps that's the brilliance: hiring people who can spend their lives working and doing nothing else.
It's clearly something that comes up on Glassdoor a lot[0]
A serious caveat about relying on Glassdoor.
Glassdoor doesn't do absolutely any verification - no corporate email address verification, etc.
Anyone can place any review for any company!
Here is an experiment at it - Techloaf (The Register for newsletters) asks it's viewers to write Glassdoor reviews about Techloaf.
https://us17.campaign-archive.com/?u=14538d8f8591165977d9a9d... (Search for Glassdoor)
A CARL TO ACTION: REVIEW US ON GLASSDOOR
You don’t know much about Netflix. Netflix was the first company to give unlimited vacation and 1 year family leave. Netflix openly says that if you work long hours then it’s not the right place for you. They would prefer people who get the job done in an hour than someone who tools for 10 hours a day.
Feel free to attack my knowledge of Netflix, but the opinions left by employees in that link I posted are pretty damning. That said, you base your argument solely on the perks advertised without acknowledging the nuance and politics of large companies, and what they advertise is never quite as rosy as it sounds.
Frankly, it sounds to me like you don't know much about Netflix either.
A small sample of reviews:
"Work life balance is a joke at times but it depends on team and manager"
"High turnover rate, culture of fear"
"most managers are stressed out all the time and encouraged to weed out employees no longer useful or not performing to "high standards"
"Culture is a lie"
"Take the good salary with the risk it gives. You will be let go, it's just a matter of when."
Do you even live in Silicon Valley? Netflix is known to pay top of the market and the ones who work there love it. And Glassdoor is known to produce “ratings” biased by disgruntled employees.
Go on blind and talk directly to Netflix engineers. The ones that fit the culture are universally happy. The ones that are unhappy are the ones who likely aren’t good fits and will get let go soon. My friend said he saw 20 people let go in 2 years. But he’s genuinely happy being there and makes over $600,000/yr.
Some of your comments were probably downvoted because you began them with personal swipes. Could you please edit those out when posting here? They break the site guidelines: https://news.ycombinator.com/newsguidelines.html.
It's a pity, because it does sound like you know something about this topic.
Not sure how where I live factors into this argument at all.
> The ones who work there love it.
Again, this clearly isn't true based on what's posted on Glassdoor. Many people have written about being blindsided and fired without any warning or indication. That kind of environment gets toxic, clearly not everyone who works there is happy. There's a reason the word "cult" gets dropped constantly. Are you saying those people who claimed to be fired despite good performance are just trolls who've never actually worked there?
If anything, Glassdoor review bias tends to skew towards companies because HR departments send out internal emails asking employees to fill out positive reviews to counter the negative reviews. I've been asked to fill out positive employment reviews by my employer on multiple occasions throughout my career, but perhaps my experience is unusual.
> My friend said he saw 20 people let go in 2 years. But he’s genuinely happy being there and makes over $600,000/yr.
How he doesn't wonder when they're going to axe him is beyond me, but I'm not privy to his situation. In most companies, turnover like that dramatically destabilizes the culture and retention of truly outstanding employees.
It's a way for companies to eliminate their vacation payout when you're fired. If you have a defined vacation policy, then by law the company is obligated to pay you out for the unused vacation days in case of termination/resignation. But in the case of an "unlimited" policy, there's no such obligation. Great for the company. Not so great for the employee.
This is the truth in my case. Having quit my last job yielded in a huge payout (5 figures). I do understand that this was basically the salary for the time off that I didn’t take. I still took decent amount of vacations but over time with PTO rollovers the balance built up to a significant amount.
> If you have a defined vacation policy, then by law the company is obligated to pay you out for the unused vacation days in case of termination/resignation
I think this is only the case if vacation is accrued. If it's a single yearly lump, it doesn't appear they have that obligation (at least, not in NYC)
It has become pretty common. You don't track the days you take off. You are expected to honorthe commitments you make. At most companies this becomes an informal 5-8 weeks.
At first, I was extremely skeptical, but it actually works well when you work with people who act like reasonable, understanding adults. If you don't, then the vacation policy won't matter, because it's going to suck working for them no matter what.
Most people don't end up taking 5 weeks, and I think 8 is more along the extenuating circumstances - i.e. at one job I needed to leave early on a regular basis to deal with trips to the vet for a very sick dog. My boss was very understanding and since I was one of the more senior and productive team members, no one minded.
Honestly, I don't think I would take a job offer that only included 2 weeks vacation, even if the pay was exceptional. Early on in my career I didn't mind not having much vacation, since I rarely, if at all, used it. Now that I'm older, the added flexibility is more important.
Maybe it's my level of experience? I've been in the industry over 12 years now, with some variation of senior / staff / principle title for I think 8 of those years. No idea what the market is like in NY, but I would imagine you could also pretty easily negotiate starting with 2.5 or maybe 3 weeks.
Just like the list of requirements are a guideline, so too are perks offered on job postings, and you don't actually have to settle for what they first offer you. So long as the labor market for programming is hot, you should take advantage of it.
FWIW, I’ve been in the industry even longer than that. And yes, senior developers have the leverage to sometimes negotiate for more. But that doesn’t mean it’s not the most common policy or that most people (especially those in less in-demand occupations) aren’t stuck with it. Nor that it doesn’t influence how people interpret unlimited-PTO policies.
As for me, most of the 10-day-PTO gigs were earlier in my career (startups seem to almost universally opt for “unlimited”). Going into the most recent one, I had other priorities to negotiate for.
But mostly, the way we think about time off and work/life balance in the US bites.
I had a one hour commute each way at the time, so if i had an appointment, I took the day off / worked from home, depending on the appointment. She was a very, very sick dog, went from healthy and happy to put down because she could no longer eat on her own over the course of 6 months. It was a painful (not to mention expensive) experience.
Though, I was also doing some real estate transactions (selling and buying a house) so some of the days were also for that.
No such thing as unlimited vacation. What happens in every “unlimited vacation” environment is people start to feel guilty about taking vacations, and therefore stop taking them. Studies have shown this - you can look them up.
When people offer this, it's illuminating to try to suggest numbers and ask if that's still "reasonable".
It quickly becomes clear that for all the talk about it being "unlimited", most employers will be very uncomfortable when you start offering up numbers even slightly above the caps most other places.
Most of the time these "unlimited" policies seem to either be extremely cynical (with full knowledge of studies into the subject) or reflective of workaholics with extremely naive views of how much vacation time someone might like to take if it felt truly unlimited.
> I'd be surprised if I took 60 days of vacation in 30 years as an FTE.
Are you saying that you'd be surprised to have taken 60 days (12 weeks) in a single year, or that across 30 years you don't think you've taken 60 days in total?
The latter would be very surprising to me, but seems to be the most natural reading of your sentence.
The latter. I'd have to sit and tally it up. It's possible that I'm slightly low in my estimate but not by a tremendous amount. I realize that that's only a couple of days a year. I'm not including getting sick in that swag.
Typically I'd work for somewhere for 5 years and then pocket the vacation when I left. There might be a single week (or two) off and a handful of Fridays off in that time.
I'll tell you when the non-vacation time comes up is when you become a FT contractor. If the money flows, you row.
It's a shame that you're being downvoted, because you are correct.
> But Brantner said research indicates that employees with unlimited vacation tend to take less vacation each year than workers who have caps on their vacation days. This, she said, is partly because many companies have policies requiring those with limited vacation days to use those days or lose them at the end of a calendar year, which encourages those workers to take off all the time they're allowed.
> The 2017 HR Mythbusters report by Namely, which offers HR software and services to midsize companies, found that employees who were offered unlimited vacation took, on average, 13 days off a year, while workers with capped vacation days took, on average, 15 days off.
> A rundown of research compiled by Sage Business Researcher showed that companies offering unlimited vacation found that in many cases it actually encouraged employees to take less time off. Other research shows that it may even create competition to take fewer days off.
"Unlimited vacation" is not actually unlimited. Hear it from Joshua Reeves, CEO of ZenPayroll, which offers this benefit to their employees:
> Even if your time off is technically “unlimited,” your manager obviously doesn’t expect you’ll take off 75% of the time. Actually, he or she probably has at least a general range of number of days or weeks in mind that is acceptable for an employee to take off—even if that range hasn't been openly communicated. Similarly, your company may expect you to take a minimum number of vacation days. At the company HubSpot, for example, employees are expected to take at least two weeks off each year under its “two weeks to infinity” policy.
> To get a sense of the norms, ask your boss (or other colleagues) how many days or weeks other employees typically take off. If the theme seems to be “2-3 weeks, plus a day here and there,” stick to that. If you have any doubt about whether you’re using the vacation policy appropriately, pay attention to how your manager and those around you use it. (Of course, be careful: Some workplaces do have different rules and expectations for managers and their reports.)
So if the company has an idea how much vacation you should or should not take, why call it "unlimited"? Because it's great marketing (for those who don't think about the above factors anyway), and because vacation that is not accrued does not need to be paid out. Back to that SHRM article:
> Some organizations, Brantner said, began offering this benefit as a way to get around having to pay workers for unused vacation days when they left a company.
> "I'm absolutely sure that it originated in some camps as a way to get a vast amount of vacation time off the books. It was something preferred by accountants and others looking at the bottom line. At the same time, there are companies that adopted it with good intentions and that believe in the value of taking vacations."
> In November 2017, the Financial Times reported that "a big firm that ditches fixed paid leave for open vacations can wipe millions of dollars' worth of unused leave liabilities from its books that would otherwise be paid to departing employees. At the same time, it can safely offer bottomless holidays knowing most employees will never take them, especially in the U.S., the only major advanced economy in the world that does not guarantee workers paid vacation time."
I dream of a world in which, when someone says "studies have shown", the appropriate response is to politely change the subject so as not to embarrass the speaker.
Netflix was hardly the first company to give unlimited vacations! I always have done that at my companies since 1989 and I learned it from someone else.
“The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made, and the six-dollar-a-day wage is cheaper than the five. How far this will go we do not know.” - Henry Ford
It's like how GitLab justifies paying people less in lower cost of living areas by saying that they don't want unhappy employees to feel like they should keep working there just for the money.
I always love it when companies act like you shouldn’t be working there for the money. That’s the whole point of having a job! If you want people who aren’t in it for the money, you should post your ad under “volunteers wanted.”
It matters how much they are paying everyone though. You can also spin it as Gitlab is subsidizing people in high cost of living areas... which is more the truth than your spin since in the end, if the lower cost of living person is being underpaid they wouldn’t be taking the job anyways.
Eh that reasoning is weird but the location based income just makes sense to me. Do we really expect everyone to make silicon-valley salaries when they don’t live in such ridiculously expensive areas?
If the work is sufficiently profitable to the employer that they can afford to shell out a SV salary for someone in SV then they can afford to shell out that salary for someone not in SV.
I expect salary to be the same for same-skilled remote workers no matter where they live. I would expect that to result in most remote workers not living in Silicon Valley.
There’s no “in Topeka” for remote developers, though.
If you could materialize a drink from a distant bar in your kitchen, and the drink from the dive bar was identical to the one from the fancy restaurant, would you pay more for the one from the fancy restaurant?
Consider a real-world example. You go to the grocery store and buy some strawberries. Some of the boxes are from a place where they’re cheaper to grow, and some are from a place where they’re more expensive to grow. Would you pay more for the latter? This sort of intermingling is common, and every time I’ve seen it, the prices are the same. The store doesn’t even consider them to be separate products. They have the same bar code and ring up identically.
Barring difficulties with international borders or time zones, there is only one market for remote workers. It doesn’t make the slightest bit of difference if the remote employee is in Topeka or Manhattan. Why pay more for the latter?
But remote developers aren't the only kind of developers, and people do pay more for strawberries grown locally.
The remote developer market is a piece of the developer market, and the developer market pays more for developers in SF than in Topeka, same as remote strawberries cost less (often because cost of labor is lower).
As a remote dev, you're competing with other remote devs who can out price you. If I can offer someone else 10k less for the same product, why wouldn't I?
People who want local strawberries pay more for them. People who just want strawberries and don’t care where they came from won’t pay more.
We’re specifically talking about remote workers here. The fact that some companies pay more for non-remote people doesn’t really come into it. If you’re hiring remotely, it makes no sense to pay more for an equivalent employee who lives in a more expensive area.
If you have two offers, otherwise equal, and one pays more, will you refuse it because that offer is less than what you would have been paid in another location?
If you're a remote dev with skill x, unless you want to take less money, you're going to compete with the many more remote devs with skill x in other more expensive locations. So you accept less money because you can afford to, and that's better than no offer at all (because it went to a different person).
As long as skilled, unemployed remote workers exist in cheap areas, I’d expect the salary to be lower than that of non-remote workers in expensive areas, and I’d expect remote workers in expensive areas to be unable to compete. Once you run out of remote workers in cheap areas, I’d expect salaries to rise enough to start attracting the ones in more expensive areas. But salaries would naturally rise for all of them, because they’re all ultimately in the same market.
This is true if Gitlab is being rational. If they can afford two cheaper (but equal quality) engineers outside of SF, then why hire the SF person at all?
I think that’s a bit backwards. The question is, if they can get the people they need at a lower salary, why would the SF person accept a job with them?
It took a Great Depression to get the original New Deal. I think there’s enough political headwind still from the Recession to afford another ND, but just saying.
The crazy thing is there was a big market correction in the early 1900s. I’ve read it helped create the environment and had many of the same bad market actions that eventually brought about ‘29. History might rhyme sooner than later. There are definitely worrying trends too.
I've looked for the reference, but I can't find it--An important point in earlier coverage was Price's reasoning for setting the bar at $70k/year. It's not just that this is a decent salary or a good salary. The idea, if my memory serves me, was there is a threashold. Below that level, every additional dollar adds significantly to your quality of life. It's the difference between having health care, and child care, and not just one or the other.
What's interesting is the idea of an income threashold where each additional dollar meets a previously unmet need, and somewhere above that line, additional dollars have a different impact.
If I am am ever in a position to do the same, I may want to try it.
If you want excellent people, you have to start by paying above-market anyways. No matter the role.
And by having a flat salary, you take out a big contributor of stress and distraction.
Of course, the question is what you do with those employees who's market rate is above the flat salary rate? Not sure how I would solve that, but I am sure there are better ways than going back to negotiating every salary independently.
I would want to be compensated in kind. If they have enough money to double the least valuable employees from 35k to 70k, I would also demand double.
I don’t think there are bad incentives from increasing mean of the pay distribution. But similar to the problems with minimum wage, this 70k wage minimum significantly compresses the distribution instead of just changing the mean.
This creates very bad long-term incentives for the company and employees.
I always want more money, but I don’t see why I’d expect it here. If the company cut my pay in order to pay the janitors $70,000 I might be perturbed, but as long as my pay remains steady, what do I care if people lower down the pay scale make more?
Tech workers are paid incredibly well. Maybe that’s because we create so much value, but our ability to do so is partly due to luck and circumstance. Certainly, the poor sucker emptying the trash cans for minimum wage puts in more effort each day than I ever do, and the company needs them in order to operate just as much as they need me.
the company really doesn't need the janitor as much as it needs software devs. the janitor is only worth employing because they free other workers to spend their time on more valuable tasks. if, for some reason, janitors weren't cheaper than devs, you would see a lot more devs emptying trash cans.
Literally all employees are only worth employing because they free other people to do other things. Devs don’t directly contribute to any fundamental human need. We’re valuable because our work can facilitate those who do take care of those needs.
The relative need is entirely down to supply and demand. And while I greatly appreciate being part of a group with limited supply and great demand, I don’t see why this means I should object to other people getting more.
> Literally all employees are only worth employing because they free other people to do other things.
this is true but it glosses over an important distinction between skilled and unskilled labor. skilled positions in engineering and sales (just for example) require specific skills and probably some baseline aptitude that can't be quickly acquired. that is, you can't just assign your engineers some sales duties if it becomes too expensive to hire sales people, and most sales people can't just pick up engineering tasks if it's too expensive to hire more engineers.
in contrast, most able-bodied adults can learn to sweep, mop, etc. in a couple weeks. maybe extend it to a couple months if they need to use heavier equipment to clean a large space. this inherently puts a ceiling on the value of janitorial work. if janitor pay gets too close to pay for a skilled role, it's just not worth hiring the janitor anymore.
you can see this dynamic play out in restaurants and convenience stores. most businesses like these don't hire janitors, because they would have to pay them as much or more than they pay the waitstaff, cooks, or cashiers. instead, the normal employees are usually tasked with cleaning the workspace at the end of their shifts.
to be clear, I am not contesting your greater point. the fact that some people don't perform extremely valuable work doesn't mean it's okay to treat them like dirt; it doesn't make them less valuable as people. but the claim that a software company needs a janitor as much as it needs an engineer just isn't true.
Your casual insertion of “able-bodied” hides an important point: there are lots of people who can’t do janitorial work either. There is nothing inherently different between the two types of work. The difference is of degree, not kind. I know developers who would be literally incapable of performing janitorial work. You probably do too.
I completely disagree with your statement at the end. The janitors are absolutely needed. Maybe you don’t need people with the title of “janitor” because your developers take care of that work too, but that just means they’re part-time janitors, not that you have no janitors. An office that actually has no janitors will rapidly become filthy and filled with trash.
You’re confusing need with ease of acquisition. It can look like companies don’t need janitors very much because they’re so easy to get. Companies don’t have to pay them well or treat them well because the supply is large and if you drive one away, there’s another one ready to take their place. But that doesn’t mean the need is low, it just means the supply is high.
As an analogy, consider: what are the greatest needs for an individual? You’d probably answer: food, shelter, companionship, maybe something like fulfilling work. I bet you didn’t answer “air.” Yet our need for air is perhaps our greatest need: without it, we die in just a few minutes. Why doesn’t that come to mind as a need? It’s because it’s so easy to obtain, we just don’t think about it.
Basic economics dictates that the difference in supply versus demand means developers will be able to command much higher salaries. Not because they’re needed more, but because they’re harder to get. The same reason a glass of champagne is more expensive than a glass of water, which is more expensive than a breath of air. If a company decides to pay their janitors more than the economics says they have to, that doesn’t mean that I should expect them to do the same thing for me as a developer.
Assuming that everything you said is true (and it is), why should the engineers care? They are still getting the same salary they had before and likely still have a much higher top tier than everyone else. If they are able to put their ego aside, they would see they were not negatively affected at all. If I was an engineer getting a fair market wage at 70k, and then the janitor gets a raise to an above fair market wage of 70k as well, it does not affect anything in my life. I am not going to quit and go work across the street as an engineer still making 70k just to ensure the janitor there knows I am more valuable.
It does underline how for some people it's not about the absolute amount the earn, but about where it places them in the pecking order. Raise up the janitor and they're relatively speaking closer to the floor.
Why is it comparative? In the article it says that people left because they didn't like that others were getting a larger part rise to take them up to the minimum salary, which seems that envy is a more important driving force (for those people) than everyone getting paid a good living wage.
You have to lower the high salaries as well, or cause some people to exit the workforce, to prevent inflation from raising low salaries if output doesn’t change.
Such a person doesn’t like seeing coworkers they feel superior to being able to afford things similar to themselves. But that itself proves a point about what sorts of decisions impact a country’s wealth the greatest on the margin. If you give individuals on the lower end of the spectrum more money they will spend it. There’s no worry that they’re going to put it into investments or expenditures which don’t turn into income for somebody else. So the GDP actually raises by much more of an amount, and thus national wealth in the long term aggregate, than if those income increases were sent to the wealthy.
It really depends on how you categorize yourself and your co-workers. If you value yourself as simply an engineer and your coworkers as a janitor, cashier, etc. then yes I could see your entire identity being wrapped up in making more than others.
If you categorize yourself as a person and your coworkers as other people who also deserve happiness and the chance to ensure their children have a good future at exactly zero cost to yourself then you would see this across the board raising of the minimum as a good thing.
If I make the salary I ask for and am able to lead the life I want on it, then the fact that everyone else I work with is also getting a great salary is only a net positive in my book. The fact that the higher earners salaries were not affected at all means they suffered no harm except for those led by their ego.
This is a great feel-good story. I do disagree with this, though:
"For a while, it wasn’t clear that the gamble was going to pay off.
But eventually it did...."
I think the final page isn't yet written. NYT seems to be declaring the whole thing a success, but they are picking the timeframe for deciding when things are final. Let's give it 10 or 20 years, see where they are at.
I won't be unhappy if it's the same, but I will be surprised.
I remember the naysayers of the time said that the existing $70,000 employees, and even some of those who were paid less than $70,000, would feel jealous that the lowest paid employee now was making the same as them. These people would presumably cause a fuss and then leave, and Gravity would lose their good employees and the institutional knowledge. One journalist managed to find someone to anonymously say that.
They said customers would know that the employees were "overpaid" and switch to another processor, although why this would work without those processors also being cheaper I never understood.
In this sense, the experiment is a success. At this point, it seems there will need to be a sudden change in the market to put them out of business, such as a very efficient provider with better customer service.
Nonetheless, most of what we pay in payments processing goes to parties like card issuers for their rewards programs and to the networks for their oligopoly rents. This means that the cost of the processor is relatively small. If they are making the kind of revenue that allowed this change in the first place, they will probably be able to keep making it until there is a real change in our processing system. That change would probably be regulation.
I agree with you. If a privately owned company wants to pay over-market for certain jobs, that's their lookout.
As an old fart, and I've been in quite a different industry than the subject of the story, what has made a company successful is building a really desirable product in a growing market. People do a lot of handwaving about company cultures, quality of life, renumeration, but I think that building the right stuff will overwhelm practically any internal problems.
Due to ignorance and propaganda, uninformed people think that socialism is universal healthcare, higher pay, etc
They don't know the meaning of the word nor how this ideology works.
Socialism as it is technically understood is state ownership of the means of production and all parts of the economy. The state controls how the economy is traded and who gets what.
Scandinavian countries are social democracies which very strongly embrace capitalism, and have strong social safety nets through taxation.
I've never formally learned Political Science so I could be off-base here, but doesn't it go like this?
Socialism: the workers own the means of production
Communism: the state owns the means of production*
*Granted, what I was taught in history is that socialism is viewed as a halfway point where communism is the ultimate goal, and that communism should involve ownership by the workers rather than the state— pretty much always, however, the state ends up with ownership (otherwise it's hard to maintain order in a by-intrinsic-nature oppressive society).
If I'm wrong, please feel free to critique and offer some readings? :)
Start by looking up the words in one of the many free online dictionaries.
Both mean state control of the economy. One of them means paying people what the state thinks they need and requiring them to work how the state thinks they can, as opposed to other strategies like competitive market forces.
The Soviet Union, and all of these other states explicitly claimed not to be communist exactly as justification for the existence of a strong state, and to argue that the differences and oppression was "necessary" to lead their countries towards a hypothetical future communism. For a very good reason: One of Lenins big theorethical claims to fame is a work (State and the Revolution) where he argues strongly for Marx view that under communism the state is superfluous and will "whither away".
Whether or not one agrees that these countries were socialist (depends greatly on ones definition of socialism, but e.g. Marx argued that socialism was not a single ideology, but used it as a vague catch-all term and proceeded to criticise forms of socialism he saw as flawed or outright oppressive and reactionary; Engels later pointed out that they could never have written a "Socialist Manifesto" in 1848 because the term was used by too many people they strongly disagreed with, and was not radical enough), or whether or not they were trying to achieve communism, all of them at one time or other argued they were far away from achieving communism.
Point being that you have your terms reversed at very best. Communism implies the class struggle has ended, and a central idea of Marxism is that the state only exists as a political power for one class to oppress another, and that as a consequence ending the class struggle would make the state superfluous.
Under a purely Marxist view "the state" owning the means of production might represent a reasonable immediate outcome of a socialist revolution. With the caveat that in his works on the Paris Commune, Marx hailed the Commune as a demonstration of how a workers state could be the outcome of destroying the capitalist state, and criticised the Commune mostly for one thing: For not going far enough in destroying the older state to replace it with directly elected and recallable delegates.
But there are many other socialist ideologies as well, that do not ascribe to state ownership of the means of production - Marx wrote about some of them himself in the Communist Manifesto and elsewhere, it's not quite right to delineate them that way either. Marx never did.
In fact that separation of socialism and communism comes from the Bolsheviks seeking to justify their oppressive state with a "but we've only reached socialism so far" defense.
As a Scandinavian, I think that makes no sense. Germany introduced modern welfare reforms long before Scandinavia: Bismarck - a far right monarchist - introduced a pension system and healthcare insurance in the 1880's. His rivals on the right at the time mockingly accused him of being a "state socialist", and he embraced the term, because his intent was to out-flank the socialists of the time by offering limited concessions that went further than even some Marxists. At the same time as he offered the carrot, he applied the stick: dozens of socialist organizations and newspapers were outlawed, their leaders arrested.
Through European history, we've seen universal healthcare and pensions and general welfare reforms come about largely as a result of the combined efforts of two groups: growing labour movements, and Christian democrats. In Germany Bismarck leaned on the Catholic party Zentrum, forerunners of the modern ruling centre-right CDU, and argued heavily from a point of view of Christian morality to get his reforms through.
In Norway, the first welfare reform was introduced in 1894, after Bismarcks model. After World War II, there was broad agreement across the board for welfare reforms, but it was first a broad coalition of centrist and centre-right forces that introduced the first major expansion of welfare: The Borten government, led by the agrarian "Centre Party", in coalition with Left (classic liberals), the Christian Peoples Party (centre right Christian democrats) and Right (classical small-c conservatives, which in Norway makes them the traditional right wing, but relatively moderate). They certainly got the support of the left, and the Labour Party subsequently expanded the welfare system, but the foundation of welfare in Norway like in most of the rest of the developed world was not a unilateral expansion of socialism but reflective of a combination of growing labour movements and Christian morality.
Some notable exceptions: In the UK, the Christian voter groups are split between Labour the Conservatives, for example, with internal factions in both causing tension.
What is unique about the Scandinavian model is not healthcare or higher pay per se, but the compressed pay scale. It's a bit embarrassing to earn "too much" in Norway, for example. Salaries ranges are much flatter.
But that is not just due to Scandinavia changing, but due to the rest of the world changing. Look at pre-Reagan America for example, and executive pays were a far lower multiple of the company averages.
The gdp of the United States is 19.39 trillion dollars; the number of full time workers is 128.57 million. Divide the first number by the second and you get $150,812 per worker- plenty to give everyone 70k per year. This is back of the envelope math and obviously is not very precise but still, there’s plenty of money to go around, and a lot of room for the minimum wage to go up.
Is labor cost the only input for GDP? That calculation assumes everyone is equal, when everyone is not. An aerospace engineer is far more valuable and rare than a guy that washes cars. A doctor is more valuable than a burger cook. Tim Cook is more valuable than a security guard at a mall.
I think the pinnacle of human progress would be to recognize that while we are all different in the perceived value we create for the world, but also recognize we are all humans with all of the same needs. The value created by individuals should not be the measure by which we are forced to fulfill our basic needs. Everyone should get everything they need to survive regardless of how much value they create. Anything else is forcing those with low "value" to starve either directly or systematically.
You’re confusing productivity with leverage. A person who harvests cabbage arguably already produces 70k worth of value every year- they just don’t have any leverage to claim any of that value for themselves since they are easily replaced. It has nothing to do with how much value they produce. By the same token there are only so many technical jobs in any economy, and if the supply of those jobs increases beyond the demand you’ll just see a lot of extra credentials and other filters placed to eliminate the excess.
Edit: and of course the extreme, canonical example of this phenomenon is people who have no jobs but hold lots of stocks, which allows them to extract tremendous economic rents from their leverage as the owners of the land, machinery and organizations required to make the economy run, but without personally contributing any value at all.
Hmm, I'm not sure I agree with the specific example given here. How can you say that a cabbage harvester produces $70k in value per year when they are paid much less than that, and every part of the supply chain for cabbage almost certainly enjoys tiny margins (cabbage farms, cabbage distributors, and grocery stores are not known as high margin businesses as far as I am aware).
You might argue that the excess value being produced by the cabbage harvester is being accrued by the consumer - that they are enjoying significant value from the cabbage that they aren't paying for. But I doubt that too - I'm almost certain that if the price of cabbage were to, say, double, that cabbage sales would plummet.
I'm not saying that jobs are not always compensated with their true value. You're right that frequently people extract much more or much less value than they produce. But I think that your example is not one of these, and I'm curious if there is research about how many* jobs actually fit this description.
If all the stockbrokers of the world or the people writing vision statements or selling timeshares or what have you went on strike, would anyone notice?
If all the food harvesters of the world went on strike, how long would the human race last?
Limbaugh is right about one thing: ongoing capitalism is predicated on labor’s willingness to operate within a framework designed to efficiently capture surplus value created by employees, and concentrate it at the top of a company’s hierarchy. In that particular sense Gravity is no longer an example of successful capitalist enterprise. Funny thing is, taxonomy matters not a little bit for those who are served by Gravity’s model: the owners, employees, and customers. If it works for them without harming anyone else, it’s not for us to judge.
Do you mean as base salary or as a bonus? Lots of tech companies report earnings per employee, and the I'm used to hearing that number be in the couple hundred thousand range. Apple is at $400k earnings per employee. That would mean Apple should be paying $20k as yearly salary or as a bonus on average at your 5% rule. Sounds like bonus territory.
Well, ideally, your base salary is pretty low and your bonus is big. This is the model used in finance because the returns are very unpredictable and the standard deviation between the worst and best employees is very large. Bonuses also provide good incentives to employees.
But to answer your question, total comp should be around 5% of the money you book for the firm. So salary + bonus.
I’m sure there are rigorously sourced data of this across all labor positions. There should even be a public repository of those salaries. Mind providing a link?
If Limbaugh said that (I didn't check), he is wrong. Capitalism simply means private ownership of capital, which admits a wide variety of ways to organize people, including partnerships, co-ops, profit-sharing, employee-owned corporations, employee pension plans invested in private companies, etc.
I think that Gravity’s experiment is a sign of society waking up to other viable operating models. Capitalism is just one way to do business, but it comes with some downsides that are now well documented. I doubt anything of value would be lost if the goalposts got moved away from “capitalism by default”.
"A small Seattle company shows that capitalism can have a heart."
and then everyone forgets it exists, and someone 5 years later does something completely different like form a "B-Corporation" to prove the exact same thing
and charitable/purpose driven foundations which own companies are older than B corps
> capitalism can have a heart
yet people are still trying to prove this instead of using established solutions. I would say this is mostly ignorance along side a sales pitch instead of merely being discontent with what is available
Producing half a million boxes of cookies with 6 people had me wonder if people truly care so deeply that the cookies cost 99 cents. I made 35 euro in a 5 hour shift.
I don't see a reason the company would go down if they paid the 6 employees 1000 or 2000 per day. I don't know about you but if I want the cookies I don't give a flying fuck if they cost either 99 cents or 1 euro. Does this behavior change when one earns more than 35 euro per day? I think it only changes when one buys more than 10 000 boxes of cookies. Then that 1 cent would be woah 100 euro - unacceptibal!
I think the minimum wage should be designed by dedicated government committee based on the price of the product and the amount of customers served.
I currently work a minimum wage job cleaning trains. I serve some crazy number of customers (I guestimate 100 k daily) who pay 50-100 euro for a ticket. If they paid 5 cent extra the cleaners could earn 1000 euro per day. Sounds like a joke but people are already paying this for cleaning the real question is why they aren't getting what they paid for.
Its all culture, it has nothing to do with what things cost nor what they are worth. Its just like this idea that people doing brutal physical labor should also work 8 hours and work that job till they are 80 - as if that is even possible.
I really think we need a committee who with a serious face have to sign off on each job. Give them nice bonuses that they have to pay back if their estimates didn't work.
Businesses will pay an employee what that employee can get if they walk across the street and take a job. There are altruistic employers that pay more but this would never fly at a public company or government agency where the business owners are you and me.
How do you decide that the "estimates didn't work"? Maybe we would make a dedicated committee for deciding if the minimum wage committee should keep their bonuses, and then a committee for that etc.
