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Comment by paulpauper | Hacker News Reader

For the quarter that ended on March 31, Microsoft posted revenue of $52.9 billion (up 7%) and a profit of $18.3 billion (up 9%). Microsoft had $26.5 billion in cash and equivalents as of March 31. Despite the rosy results, Microsoft employees are not getting pay increases. Nadella's own pay increased 10% from 2021 to 2022, rising to $55 million.

This comes off as shortsighted. If I wanted to optimize value, I would offer more incentives for employees to perform better. It's not even a political issue. Just a matter of decency and fairness.

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It’s because they can. Decency and fairness are immaterial in the context of profit.

The only correcting force in my opinion would be a strong union. But unionizing is quite risky and legitimately scary for highly paid employees.

Thus, divided we fall.

No they’re not.

People clearly play the Iterated Prisoners Dilemma even in contexts where they’ve been intentionally isolated and freed from context (eg, psychology experiments) because we’ve evolved a group mentality — one that encodes game theory optima as a primal impulse.

Corporate leaders who forget that tend to blow their own company up, when humans instinctually repay defection with defection — as cold, hard math dictates they should.

We’ve seen many examples, in different context - from pay withholding to marketing campaigns that denigrate customers.

Fighting human nature is stupidity.

The economy is unstable, meaning we may only make 5% more profit next year. Layoffs and pay freezes will continue.

There are two ways this pans out. Either big tech is bloated, and wages will fall over time - or current big-techs will flounder as smaller firms out compete them. This happened to HP/IBM and others, why would Google or Microsoft be immune?

Wages can simply stay flat and that’s a 5% decrease due to inflation

People keep quoting this as religion.

Making up numbers: If I only spend 50% of my take home and part of that 50% is going toward my fixed rate mortgage, is my spending power down by 5%?

If inflation on what you spend your money on is 10%, then yes.

The price for eating out has increased 15% in a single year. Its not hyperbole. Also this assumes someone who's able to afford a mortgage

Yes, but your investment from the home made up some of the difference possibly depending on when you bought. That’s a different source of wealth and one not everyone has.

Not an investment - more of an inflation hedge. Yes I realize that a primary home can be considered an investment. But that’s an often argued rabbit hole that I really don’t want to go down.

It’s a leveraged investment with a tax benefit and some government subsidy. Living in it is the tax Benefit portion.

It’s not really a tax benefit for most people.

87% of taxpayers take the standard deduction. That means at most 13% of taxpayers take advantage of the homeowner’s tax deduction on interest.

Right. But paying people and keeping your best talent there is a business concern I thought they’d be about. Guess not. Folks will vest shares and just leave me thinks. It shows they don’t care about their people. It’s unlikely that doing even the normal raises would jeopardize the company financially. Not in the least. So… and yet Nadella gets a big raise. Why? If he’s meeting his goals it’s only because his employees helped get the company there.

So where are these smaller firms and where will they get funding in the current market?

In the case of MS, is a smaller firm going to overtake Windows? Azure? Office? Are the smaller firms going to win over the risk averse enterprise companies with long term contracts with Microsoft?

In the case of Google, is some smaller firm going to take over Search? The massive amount of resources to run YouTube? GCP? Google Suite? ChromeOS in schools?

They also spent $4.973B on stock buybacks this quarter, and slightly more last quarter.

> It's not even a political issue. Just a matter of decency and fairness.

That's precisely what they want you to keep believing.

The truth is every single aspect of every employee/employer relationship is political, and always has been. If you don't accept it, your children won't have a choice to.

> The truth is every single aspect of every employee/employer relationship is political

Employees are hired in order to create value for the company. Employees get jobs in order to get paid in exchange for that contributed value.

It's not political. It's the Law of Supply & Demand. Employer and employee cooperate for mutual benefit.

> Employees are hired in order to create value for the company. Employees get jobs in order to get paid in exchange for that contributed value.

Lots of tech employees get hired to grow their director's/VP's little fiefdom within a company. Higher interest rates hopefully will reduce this, but it's still prevalent at large tech companies.

> It's not political. It's the Law of Supply & Demand.

I wonder what Adam Smith had to say about market inefficiencies caused by regulatory capture, rent-seeking, and collusion. I'm sure the market will magically fix these inefficiencies without outside regulation.

> Employer and employee cooperate for mutual benefit.

Really? Employers sure do cooperate with each other against employees [1]. I don't want to cooperate with an entity that views me as an adversary.

[1] https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...

> Employers sure do cooperate with each other against employees

As with all cartels, the employers above the table were cooperating with the cartel, and under the table were poaching.

> I don't want to cooperate with an entity that views me as an adversary.

I wouldn't, either. Nobody is making you or I.

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