I'm torn tbh - there are various ways that a salary can be set, including the value people are delivering, market forces and in reference to others in the career ladder. There's a balancing act to be had, but I can see where the GP is coming from.
Not arguing one way or another. But an alternate hypothesis would be this skill gap has closed.
Education might be better. Or tooling may have improved such that the tangible benefit of experience has, for most current applications, depreciated. Assuming the reduced innovativeness of the average tech worker today versus ten years ago, the equation balances.
Test might be measuring this skill gap in new industries (e.g. crypto) versus established ones (like adtech).
You can have the socialist argument of "hey senior engineer, take a salary cut / no raise for the common good, to avoid layoffs of junior engineers - which btw would be the first to go as they're not as productive as you are" and I've seen plenty of senior engineers accept that. Their livelihood are not as stake so they'll take one for the team, forgetting that it's a for profit company which can't find the money.
In the above scenario, I refused and I wasn't fired - but I also started looking for a job and switched 2 weeks after the above episode happened.
If you are, you’re not getting paltry 2-10% raises yoy.
Maybe in an alternative world, it would... but in my experience, salaries are almost entirely based on market demand and supply, local regulation, and how much money the particular industry you can find jobs on can make, divided by how many people they need to make it happen (which changes how much they pay when they get desperate for experienced workers).
How much value you actually deliver depends not only on your skills, but on the company you're working on actually creating value (which depends on not only the product, but the marketing, sales, local conditions, competition etc.)... and even though that will affect your salary, as I mentioned before, the real driver of salaries is supply (more specifically, how many capable people could do the job besides you, and how much other companies would be willing to pay them)...
For example, we know lots of companies that made billions of dollars while only employing a few dozen engineers... I'm pretty sure those engineers were only getting the minimum possible salary to keep them from leaving for another job... despite them each arguably producing several million dollars of company value every year.
On the other hand, lots of companies make losses for year while still paying good salaries to thousands of people... would you rather see those people getting no salaries until the company turned a profit??
Now that we've established that there's no real correlation between the value an individual salaried employee produces and how much money a company is actually willing to pay them, let's look at the social aspect of the problem as well.
When everyone gets a decent pay (by us increasing the bottom relative to the top), society is fairer in a greater sense, as more people will have the means to have a good life regardless of their education or skills... those with greater skills will always be more highly appreciated and better compensated in a free economy (specially those willling to start their own business - which allows them to extract nearly ALL value they produce at the cost of high risk to themselves... by the way, that's why those who do it are not willing to give their salaried employees ALL the value they deliver). That has great benefits to society as a whole as there is going to be fewer people that resent the "smart asses" making 10x more than themselves, the economy becomes more vibrant as there's more people who can afford to spend money on fun things, and so much more... imagine your son turns out to be a bit dumb (it happens, unfortunately)... should he be doomed to a life of misery?
Finally, you assume you deliver 10x more than someone else but I bet you have zero evidence to back that up. Developers specially are extremely hostile to actually having objective measurements of anything, so we can't really know for sure.
So, that's why I think that no, it's not very fair for anyone to make 10x more than anyone else.
I wasn't referring to programmers, but unskilled labor such as specifically, package sorting. Even some fast food jobs are approaching that number.
> That will not actually affect you negatively in any way
Absolutely untrue. When everyone has more money, money is worth less. See also, our current (underreported) inflation rate.
I'd be all for everyone making more money, unless it means money is worth less, which is what's happening now.
Do you see any concern with other people making more money that would not be reflected in an (accurately reported) inflation rate?
I hope I don't come across as a conspiracy theorist here... but based on my own experience and also how CPI is calculated. CPI constantly shifts out items to 'mimic consumer behavior' which coincidentally also makes inflation look lower. As someone who hasn't really changed much, our grocery bills went way, way over any reported number. It is probably close to 30-40% in total(2019 to today), but I can't find any old receipts proving as much...yet.
Rent for us is up from 1700 to 2750 for like sized houses (due to not getting renewed, it's admittedly not on the exact same property).
And gas well, that tells its own story.
> Do you see any concern with other people making more money that would not be reflected in an (accurately reported) inflation rate?
No way! If everyone could make 100k a year and we could have 2018 prices back...that would damn near be a utopia.
OK, it's good we agree on that.
About inflation: CPI has some aspects that underreport inflation and some that overreport inflation.
This is actually a serious topic for economists, not just for in conspiracy theory nuts. Though you can imagine that the former focus on different aspects than the latter.
I can write a bit more about this from an economics perspective. Some interesting keywords to look into:
- hedonic adjustment
- gdp deflator
- Big Mac index
Partially because inflation is such a 'subjective' topic, and requires judgement about how much better or worse the new iPhone is compared to last year's model, my preferred model for central bank policy is nominal gdp (level) targeting instead of inflation targeting.
Nominal GDP is the same as total nominal income, and basically just counts up every dollar everyone in the economy spends/earns. No judgement about the quality of iPhones necessary.
(Alternatively, you could target total gross nominal wages. It's almost the same in practice, because the ratio of total wages / gdp is fairly steady over time in the short run.)