Hacker News Reader

Comment by firepoet | Hacker News Reader

The interesting thing is that wages have remained stagnant as productivity has increased dramatically. Which means that our labor has been valued less over time. What needs to happen is that the work week shortens while the minimum wage increases in kind. Top execs need to be comfortable making less, as they are the only ones profiting off these productivity increases.

View on HN

People need to start seeing the value of unions again.

Is this (wage stagnation) true for tech? It seems a special case.

I wonder what the exec-pay/wage/productivity growth charts look like if we exclude tech. (Less disparity? More? Less productivity?)

Maybe? I know I make about the same as my uncle did working for Ernst & Young (in DC) during the late 90s early 2000s.

However, neither of us were/are in development.

I think this is why tech companies and venture capitalists are investing in bootcamps. Take the Lambda school for example - it got funding from Peter Thiel, Geoff Lewis of Bedrock Capital, Google Ventures, GGV Capital, Vy Capital, and Y Combinator.

https://www.forbes.com/sites/susanadams/2019/01/08/how-lambd...

There is substantial wage stagnation in tech. I'm pretty sure average compensation hasn't really risen much in 20 years (50k-75k entry, 125k after 5 years, average dev peaks around 200k). This is while many of these developers are making the companies they work for millions in value. Of course there are outliers, and a lot of big blowout top-of-HN companies qualify, but the number of developers has grown substantially and thus diluted the income pool to largely maintain the status quo.

And it feels like there is an active campaign by tech companies to obfuscate that fact. That they can guilt trip developers into saying "well we are still getting paid better than most people being exploited by corporations for huge profits per worker!" as if that means they shouldn't argue for their fair share of the value they create.

Some developers should be paid millions because they are making millions for the company. Some should also therefor not even be employed because they aren't actually doing anything valuable - there are a lot of "developers" that snake their way into teams where they don't contribute functional or productive code and just manage to exist as a fixture of bureaucracy where the dozen layers of management over them don't understand what programming is or how to evaluate their performance so they just collect their 6 figure check as a trick of good fortune.

So there is a faction of developers who don't want to see greater pegging of their salaries to their value, the executives usually don't want to do it because underpaying your top talent is hugely profitable, and the productive devs that should be arguing to be paid according to the value they create are guilt tripped by everyone that they shouldn't. But that absolutely produces tremendous wage stagnation. Just because developers are fortunate to be in short enough supply to demand a higher base salary doesn't change the fact the only reason there is so much demand is because there is so much money to be made.

> Top execs need to be comfortable making less, as they are the only ones profiting off these productivity increases.

I know that would be the ideal world but... that's never going to happen under capitalism.

I'll die 50 times over before capitalists say "I have enough". While the world revolves around companies, it can't change. Companies have only one objective in mind: increase profits. There is literally zero incentive for anything to change, specially with more and more people in the world.

Edit: wording

We live in a global economy now. Like a billion people have been raised out of abject poverty. It's an absolute falsehood that only the top earners have prospered. The middle class is shrinking in the US, because they're moving up. We brought in millions and millions of foreign workers from impoverished countries, did their wages remain stagnant?

> The middle class is shrinking in the US, because they're moving up.

This is only half the picture. The middle class is shrinking in the US, because some are moving up and some are moving down.

According to the US Census data, the percentage of households that are low income is smaller than ever.

https://fee.org/articles/why-our-shrinking-middle-class-is-a...

No, according to Mark J. Perry and FEE the percentage of households that are low income is smaller than ever, not the US Census data. This article cherry picked $35,000 as the middle to lower class threshold for a reason.

The Brookings Institute, "Our definition is a relative one, meaning that the thresholds pictured above will shift as the income distribution changes shape. If income rises across the distribution, so too will the thresholds that delimit middle-class incomes."

Long-running non-biased standard measures of middle-class do not agree with this article's definition of where the middle-class starts and ends:

https://www.pewsocialtrends.org/2015/12/09/the-american-midd...

https://www.brookings.edu/who-are-the-middle-class/

> Only the top earners have prospered

This is actually a relative truth, absolute falsehood cannot exist. It's not absolute truth though.

Executives live in a global economy. The rest of us might "operate" in one but we don't get to take advantage of that privilege the way the wealthy do. You are right, world wide poverty is on the decline. But given the choice between:

- better for 1 billion people

- worse for 2 billion people

- really outstandingly fantastic for 200 people

and

- really good for 5 billion people

- worse for 200 people

I know which way I'd lean in that spectrum.

It's slightly worse for white men in the West who had a historically unique period of prosperity immediately following WWII. It's still nominally better for them, it's just not relatively better compared to everyone else. It's better for women, it's better for minorities, it's better for immigrants, it's better for the billion people who escaped poverty since just 1990. What are the big complaints compared to 50 years ago? If you happen to live in some of the best places to live in all of human history it's harder to buy a house?

Unless I'm mistaken, the premise these arguments always seem to follow is, just because people in general have a better standard of living now than in the past we should ignore the following questions.

Why the majority of profits from productivity gains over the last 40 years have gone to a select few who are already wealthy?

Why the rate of increase of our standard of living hasn't been on par with the rate of productivity gains?

I don't believe those questions are genuine.

As a thought experiment... Let's assume for a moment that we both agree on these two points. First, that taxes, social safety nets, and regulations impact things like income and wealth inequality. Second, that income and wealth inequality was better 40 years ago. How many people are willing to turn back the clock on taxes, social programs, and regulations to what they were 40 years ago when we imagine that things were better? I've personally never met a single person who complains about wealth/income inequality who would take that deal.

What? Nobody is talking about turning the clock back. I honestly can't fathom where you are arguing from here. Your response comes across as the king of all strawmen. Go reread my second question. Standard of living is better now than 40 years ago. I don't know why you are assuming I think anything else. The point is to ask whether or not that increase in standard of living was at a rate that mirrors the increase in productivity. Just because things are better doesn't mean there isn't room for improvement.

Well, what kinds of changes would you propose to do in order to attempt to reach this state where the increases in standards of living matched increases of productivity? Does it have anything to do with taxes, social programs, and regulation? Because I have a known historical set of of those things which led to outcomes that are at least closer to what you want than what we have now. Can we not recognize that the last 40 years of changes were a failure, so we should move back to the better state and then move forward from there again in the hopes of doing better this time? Or must we continue to add on to 40 years of failure?

Because if you're expressing a concern about wealth/income inequality, and you're not willing to try to recreate the state which created better wealth/income equality, then you seem dishonest. Frankly, it seems like you're speaking exactly in the reverse of your stated goals. You say you want equality and that taxes/regulation/social programs are the means. But you are acting the opposite, that taxes/regulation/social programs are the goal and that complaining about equality is the means.

Reply on news.ycombinator.com