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Comment by handrous | Hacker News Reader

I have a really hard time distinguishing between the idea that companies are entitled to some maximum of an employee's work-quality and effort and the notion that an employee is entitled to compensation amounting to most or all of the marginal value they add to a company through their labor, not just what they can convince the company to give them. Like, I don't get how one can argue for the former and reject the latter, not regarding it also as a form of "corruption", as you put it.

(I'm making an assumption here that you're not big on Marxism, I guess—maybe you do agree with both propositions)

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This is the all-important point. It would be insane for me to try my best to make money for a company when the effort reward curve is so non linear. The only reason the idea of "doing the best job you can" is propagated is because it allows one to abuse workers. I could see myself working hard at a company with a flat-ish compensation structure tied directly to the revenue of the company.

"If I make a penny my boss makes a dime, that's why I shit on company time."

Right—I don't get how not putting in something resembling full effort can be corruption, but a company not paying you as much as they could, rather than what they must, isn't corruption.

What's going on here is that, in theory, both sides of the employer/employee relationship are supposed to have equal or approximately equal negotiating power when it comes to things like wages, hours, and working conditions. But, that's in theory. You know, theory: the place where markets are never supposed to be irrational and there aren't any information asymmetries to exploit.

And, pretty much all of those deviations from theory end up going against workers and in favor of employers. Labor markets aren't truly free because most people can't afford to just quit their job one day, then walk across the street to their former employer's competitor and negotiate a more suitable contract. Health insurance is so expensive that most people probably couldn't afford the amount of coverage they need without the subsidy their employer provides. Meanwhile, employers get away with stuff like union busting, just like Amazon is accused of doing, because "punishable by fine" really means "perfectly legal, as long as you have enough money," so that regulatory fines get treated like just another "cost of doing business."

Is it any wonder the only narrative about the employer/employee relationship we ever hear is the one that's favorable to the more powerful side?

First - 'Doing A Good Job' is not 'Maximal Effort'.

Second - professionals have incredible power and market wages are what they are. Most corporations do not profit in some exceptionally linear way beyond employees.

The 'Giant Lie' is that corporations are some magical entities that collect magic surpluses and shareholders and owners run off or private jets.

The vast majority of companies are not hugely profitable, and most small and mid-sized one's are not. Especially not in some disproportionately 'non linear' way.

Stock prices may be crazy - and those who trade stocks may or may not be making bank - but that's a very odd historical situation we have where shares are trading at absurd levesl relative to profits. That's a market 'dysfunction that may or may not be around for a while that some people managed to make money from, like Bitcoin, it's just a Ponzi-ish thing that has happened.

Corporations are not drowning in profits, and White Collar employees soak up the vast majority of corporate spending.

FYI everything I'm saying applies to mostly white collar professionals, for unskilled labour it's a different story.

And if the revenue tanked would you accept half your salary, say, or would you expect a floor to be applied?

If I burn out for a bit can I go down to working two days a week, or do they expect a floor to be applied?

Absolutely, I didn't mean "tied directly" to mean linearly, but even that caveat being made I would happily weather through months or even years of like 1/2 or even 1/4 salary. If I worked at a company where say the highest paid person did not earn more than say 20X the lowest paid and all salaries were tied to the revenue I feel like on compensation structure alone I would be more likely to work there than most places. I think "the compensation scheme NOT creating a heinous caste system" is actually really high on my list of things I would want in a workplace.

This is a good point.

First - side point - I didn't indicate that people should be outputting 'maximum work quality effort'. Just 'Doing A Good Job'.

Second - more salient - yes, comp is a big factor, I understand that, but it's a little bit of a marginal issue among professionals.

For workers who can reasonably negotiate a salary beyond the prevailing labour wage, it should be assumed they have market value commensurate on some level with their value.

Corporations are not some vast powerful entities that absorb all the surpluses for their shareholders. It's risky for them.

I would argue that White Collar professionals are in fact absorbing most of the surpluses.

Google could lay off 1/2 it's staff and still make just as much money.

Your point becomes much more relevant when the power asymmetry is stark, when employees have no differentiable skills or power like Amazon employees.

For them, yes, it's a different discussion around regulations, unions etc. and only when those basics are satisfied would it be fair to implore workers to consistently 'Do A Good Job'. But for processionals, it should be a matter of very basic integrity.

I think both of those ideas are wrong. A company is usually entitled to hire the most productive employees it can find for the remuneration it’s willing to offer, and an employee is usually entitled to somewhere between 50-90% of the money it can convince an employer to pay them.

Employees are never paid for the marginal value they provide, because for among other reasons, there’s no such thing. You could come up with an infinite number of different ways to calculate that, which could all produce a different value. An employee is either paid something close to the equilibrium price for the labour they’re offering, or something close to the average equilibrium price of all employed union members, if they’re a union member.

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