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Comment by cdumler | Hacker News Reader

Nah. It's about making your financial results look better. My company touts every quarter how not only is revenue up, profit per revenue is up, ie. we're making more money on the money we make. Yet, when it comes to compensation and dealing with cost of living, the statement is that we haven't met our targets so it's a 3% pool. Not minimum or maximum, but that for someone to get more someone else has to get less.

COVID had many enlightening observations about the economy, one of which is that there was a lot of inelasticity in consumer demand versus compensation. Companies have realized that there is a lot more value to extract from employees.

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At my last medium sized company there were at least a half dozen branches of “the budget”, with employees and sales people being measured against the most aggressive budget, and several levels of management adding their own buffers, and finally the board which was working off the most conservative/pessimistic revenue and profit forecasts. No idea if this is normal or not.

It is normal because most labor sellers are not able or willing to sell their labor at a higher price to a different buyer.

All that nonsense about pools and targets and budgets is just a polite way of the buyer saying “we are betting you will not quit for x number”.

As a labor seller, you should always just think of employers as buyers, and negotiate the way you would in any transaction. If you think you can get more, then shop around for a different buyer. Or a different line of business if your buyers are not earning much profit themselves.

>It is normal because most labor sellers are not able or willing to sell their labor at a higher price to a different buyer.

In order to sell at a high price, someone else must be buying...

This market maker analogy really isn't a win.

That is covered under “are not able to sell”.

And it is not a market maker analogy, it has nothing to do with market making.

The point is, the buyer dictating price is “normal” because sellers often are not in a position to turn down the offer, whether it be due to them not having an option or not being willing to take a risk.

>profit per revenue is up, ie. we're making more money on the money we make.

This makes no sense to me.

The amount of profit per customer or item sold has increased. Instead of just increasing the number of sales, they have increased their profit margin on each sale.

Oh, the usual way to phrase that is “increased profit margins”.

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