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Comment by korginator | Hacker News Reader

With the rate of inflation and interest rates going up, salaried workers need a cost of living adjustment at the very least, even if we forget about a bonus or a big pay hike. This decision is unethical to full-time employees seeing the tidy profit they made. It's a clear signal to the employees not to expect any practical reward for hard work, what a great way to motivate people.

This is yet another large and powerful company acting to appease the market so their stock price goes up a bit and the shareholders are rubbing their palms in glee.

Now I'm off to watch "Office Space"

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Wages are not downstream of profits - they are a price in a market for labor. If companies could pay 0 they would pay 0, and if employees could charge infinite they would charge infinite.

It's better this way - otherwise employees at companies that make no money would have to take no salary.

> Wages are not downstream of profits - they are a price in a market for labor.

That is correct, and a point many in this discussion miss.

> It's better this way - otherwise employees at companies that make no money would have to take no salary.

Not so fast. For one, companies that "make no money" eventually go bankrupt and pay nothing to nobody.

It's not "better" or "worse", paying what the market requires is simply the way things are in a free market.

Many small businesses seek to treat their employees well. It's not out of some ulterior 5D chess profit seeking scheme, nor is it out of naivete of the fact that they could earn more. But simply out of having some degree of social values and ethics. Wanting to make a profit or to become rich, isn't the same as being willing to screw everybody (or anybody) over in pursuit of such.

In America today only 57% [1] of people have a positive view of capitalism. And that percent is only that "high" thanks to much older individuals who are probably envisioning our capitalism as it was in the past, before MBAology became the default corporate worldview. Take only 18-29 year olds, and 40% have a positive view. What do you think's going to happen as the older generation dies off?

Capitalism is not sustainable without more of society pushing back against sociopathy. Normalizing it because 'this is how big companies act' isn't going to normalize it, but simply turn people against capitalism - and ultimately bring us closer to swapping over to ["this time it'll be different"]ism iteration #73 or whatever.

[1] - https://www.pewresearch.org/politics/2022/09/19/modest-decli...

It's not related to capitalism or labor organization. It's that the relationship between profits and wages is misunderstood. If you want your income to be completely tied to the business results, you want to be a business owner.

There is no sociopathy, it is a simple enterprise where someone absorbs the risk and others don't - it is collaboration.

That's the status quo - a distinction between owner and employee. And it's good for the owners, who get to maximize profits - but is it good for employees? I'd say there's less risk, but they get impacted when business is down, and may not reap the profits when business is good.

Some companies are experimenting with other models - there's no law or force of nature saying an employee can't be a partial owner of a business.

You can start your own company, service or product and own 100%. In tech there's pretty much no excuse, anyone can make money online.

It’s only better this way from the corporation’s POV. Without labor unions, any salary negotiations are heavily weighted in favor of the corporation.

This is happening everywhere. The place where I work a very large, rich University gave out two 3% raises since COVID started and at one point temporarily cut everyone's salary by 5%. The only way to make more was to get a promotion or apply for a role on another team.

This hurts junior employees the most. Tenured employees have equity as a large part of their comp, they are invested in the stock price, not the few % annual bump.

This is a very "techy" viewpoint. There are only a very small number of companies globally, (a percentage that can be rounded to 0), that give equity as part of the employee compensation.

I feel like tech is the implied context here. In tech, the number is a lot closer to 100% than 0%.

Maybe in US, I never got anything like that in any European company.

It's magnitudes closer to 0% than to 100%. Like 0.1% compared to 99.9%.

Not really true for Microsoft. At Microsoft we generally do not get significant new stock grants or refresh grants, even on promotion no new stock is granted often. This may be different for principal engineers or certainly partner level folks - but senior engineers with more than 4 years of tenure will have essentially no significant stock to vest.

Are you describing American compensation? If so, how do they retain engineers after the cliff?

Inertia, laziness, crappy equity to begin with so the cliff isn't that big, concerns RE resetting immigration process progress. Source: I was at Microsoft for ~6 years and those are some of the reasons why I stuck with them for longer than I had to.

I'm still new at the company, but it seems like promotions are basically (at best) the accumulated COLA adjustments one ought to have been given, but they make it seem like some performance-based thing.

Indeed, I have a RSU vesting schedule 4 years from hire. It is financially unwise to stay beyond that on-hire grant vesting period, it seems.

The A in COLA is adjustments. COLA Adjustments is like SQL Language or ATM Machine.

This is why I like to say SQ Language and and AT Machine.

Examples of Redundant Acronym Syndrome (RAS) [1] or PIN Number Syndrome (PNS), which linguists don't fret over since it apparently serves a modest disambiguation and/or emphasis function in human language. It would be fascinating to find out the comparative prevalence in between different languages, but my Google-fu failed me.

[1] https://en.wikipedia.org/wiki/RAS_syndrome

What are new people hired in at? Inflation adjusted, are they being hired in at the a lower rate than the older employees were hired in at?

Everyone is hired in at a somewhat market rate, but it's the older employees who have become complacent and don't want to leave that are being underpaid. I know Blind is basically programmer 4chan, but if any TC postings on there are correct, I'm making more as a developer than some people who claimed to have worked their way up from junior dev and and are now manager :/

Are you sure this is typical and you're not just getting the shaft? It sounds way off to me. I've been out of MSFT for a while, but refreshes and cliff-fills are pretty standard for their competitors and I'd be very surprised if they weren't doing it for their above-average performers too.

That’s just plain not true. And I say that as someone who got some stock and is aware of just how much my US peers got comparatively.

Microsoft does pay bonuses and stock refreshers, but outside of one-time “Special stock awards” (which I’ve heard is mainly reserved for retention of people likely to jump ship), the refreshers aren’t very significant until you reach level 65 (principal). At least compared to refreshers at other major tech companies.

It depends on the exact level and how well the employee negotiated their sign-on RSUs, but most employees are going to face a compensation cliff of some sort at the 4 year mark.

Level 65 is not Principal across the orgs (I’m an IC6 and reached Principal below that). My experience is different (or else I got retention every year…)

Downvoters should realize their org isn’t special in any way.

My partner gets at least like 17% of comp as new RSU a year, and on top of that has gotten large special one time grants. The ratio of RSU is maybe lower than other companies (mine is 1/3 my comp.) but that’s kinda a good thing, especially with the large performance cash bonuses. I rather have cash than stock.

> It's a clear signal to the employees not to expect any practical reward for hard work, what a great way to motivate people.

Do companies care? This signal has been the same for about a decade now. It seemingly does not matter if employees are motivated or not. There is profit anyway.

Winning strategy as an employee is to be a mediocre employee at multiple full time remote jobs.

> salaried workers need a cost of living adjustment at the very least

Software engineers are some of the most priviledged workers in the west when it comes to compensation and perks. We need to stop talking about them like they are road construction workers here on HN. it is really out of touch

Let’s say all workers should get a cost of living adjustment…

Does it help road construction workers if we accept lower conditions ?

It's not a zero sum game, and I totally side with other professions to fight for decent working compensations.

Doesn't it actually help with inflationary spending? The Fed making a play at depressing wages and increasing unemployment is what's keeping inflation in check.

God knows the rich won't ever pay their fair share.

Fairness is an illusion in thsi universe, as is God.

That reminds me of this hilarious interview of a British economist: https://www.bbc.co.uk/news/business-65308769

> Somehow in the UK, someone needs to accept that they're worse off and stop trying to maintain their real spending power [...]

You're both totally right that giving people enough money to live might increase the inflation. But that's not an option people are (rightly so) going to be happy with. "Just be miserable" is not a plan.

Inflation seems to mainly be driven by corporate profits (>50%) in the first place: https://news.ycombinator.com/item?id=35795299

The current situation is completely absurd.

In addition there also is no skin in the game here, over-hiring or other blunders on core leadership competencies don't matter at all as long as "shareholder value" isn't negatively affected in the short term.

I'm not for crushing the American people to curb inflation either, but that's the play J Pow is making. From an economics perspective, it does help the construction worker if higher wage earners spend less money.

I've been one of the people hurt most by this, and I'm not happy about it either. Software Developers doing mental gymnastics to align themselves with the investor elite instead of their fellow working class Americans is some shit.

Maybe it's different in other places, but have you seen the paychecks of some construction workers? Sure they are working in potentially hazardous conditions, but the pay can be about the same for similarly tenured workers.

It's important to remember that if you're working for a living, you're still working class.

> It's important to remember that if you're working for a living, you're still working class.

absolutely not.

"the social group consisting primarily of people who are employed in unskilled or semi-skilled manual or industrial work."

""Working class" is a socioeconomic term used to describe persons in a social class marked by jobs that provide low pay, require limited skill, "

comparing software engineers with factory workers, etc. is incredibly out of touch. Most SE's wouldn't survive a week in hard labor work.

> Most SE's wouldn't survive a week in hard labor work.

Respectfully, speak for yourself. This isn't as rare, or as difficult imo, as you think it is. I'm speaking from a lot of disadvantage. It is what it is.

> require limited skill

Isn't this site usually full of people whining about smooth talkers with no skill? I know I've whined a lot about that. Also is what it is. The world is only unforgiving to those with narrow perspectives.

Generally, what you do for a living isn't as significant as what you learn and do with the experience gained. It's your choice to commit to what you do, or you can keep growing. Up to you.

So, we agree now that software engineers are not working-class people by any common or accepted terminology?

I still strongly reject your definition of "working class". It's not the common definition by many miles amongst many significant crowds.

It's a long term evolving thing

> The working class is classically defined as that class which must sell its labour-power in order to survive.[0]

It does go on to define working class as essentially blue collar workers, even highly skilled ones. Which would exclude software engineering.

Though I think it should include anyone for which they aren't earning enough to eventually become financially independent through their labour. This would then include quite a number of white collar workers. Certainly there are software engineers outside the silicon valley bubble for which this is true, especially in parts of Asia and India.

A good litmus test is if you feel you should join a union then you're probably working class and if you feel secure negotiating your own pay then you're probably not any more. Though I doubt this fits a traditional definition of working class.

[0]: https://www.oxfordreference.com/display/10.1093/oi/authority...

Lol tell that to the actively working doctors, lawyers and c-suite execs living in the fanciest neighborhoods of their respective cities that own moderate to significant controlling portions of companies

> actively working doctors, lawyers and c-suite execs

They do work in some sense. They manage resources and dispense expertise from time to time...

> own moderate to significant controlling portions of companies

... but it's a gray area because they're also part of the owning class

Lol these personas work ALL OF THE TIME. Doctors have the weirdest shift hours out there, for example. You have a few that rake in serious cash while working like 20 hours a week, but that's not the norm in these professions.

This is like the old "athletes are too greedy!" as if the alternative is the team owners (well known for being non-greedy?) should keep that money instead.

There's more to Microsoft than software engineers, even if there probably aren't many road construction workers.

Most working-class people should get their COL adjustment. It should be easily taken from excess profits from raising prices.

Software engineers aren't working-class

Do they work for a salary?

Wages are a function of the supply and demand for labor. If the business loses money the employees don't have to chip in money to make up the loss, but on the flip side they don't share in profits.

>if business loses money the employees don't have to chip in money to make up the loss

They absolutely do (either in slashed jobs or benefits), they just don't get a say in it

When did layoffs stop being a thing?

>> This decision is unethical to full-time employees

It's easy to mark any decision as "unethical" depending on your viewpoint. Indeed ethics are, to a large degree, highly subjective.

I might suggest that eating meat is unethical, or I might think whaling is unethical but beef farming is ok, or I might be completely ok consuming any meat since we're omnivores and meat is part of our diet. None of this is material though, and all points are equally valid, since ethics are subjective and personal.

So I've no problem with you considering this unethical, or even mentioning that you consider this to be unethical. An employee, who didn't negotiate an appropriate contract, would likely feel bad about this, and would thus maybe fall back on "unethical".

However from a business point of view it's completely ethical. The contract between an employer and employee is a simple business relationship. Their responsibilities and powers are clearly laid out. Setting increases and bonus's is clearly (for most of us) a mandate given to employers. In some cases (where unions are involved) the mandate falls over both the employer and the union.

Of course employers care about employees (in most companies anyway.) If only because a mass departure would be bad. They also have other considerations though, customers, shareholders, sustainability, future profitability and so on. They are constantly balancing many levers to try and keep "everyone happy". Usually this means the love has to be spread around a bit, not everyone is going to get everything they want.

Does this mean it's always in balance? no of course not. Currently (in the US) there's probably too much of a lean towards shareholders - both in artificially increasing stock prices, and also in prioritizing returns. In other places labor is stronger and the balance is away from shareholders. In another time, and another place, there's reasonable balance for a while.

For me personally, it's hard to feel sorry for FAANG employees, who've been living large for years and now (shock, horror) aren't going to get increases. Oh no, that 100K you're getting isn't enough? My heart bleeds for you. Said no Uber-driver ever...

> This decision is unethical to full-time employees seeing the tidy profit they made.

Profit itself is unethical.

Based on what ideology? It's polite to at least state your premises

I can't say I did not fall for the bait, but I believe its a leftist troll attention seeking. Other comments left both immediately recently and over the past few days at least are all roughly the same on topics where the concern is at best minutely related

Alright, I’ll bite. How is profit unethical? If I sell my neighbour something and make a profit, are we not both better off?

If you are puzzled by weird economic positions of people don't read the threads about SVB's collapse.

I’d prefer someone help me solve my current conundrum than add to the confusion.

    > Profit itself is unethical.

This statement is unethical.

It's a very strange thing to claim that profit is unethical. In tech companies, profit is an indication that the whole is greater than the sum of its parts — i.e. so much wealth has been created that there's an excess of it.

The question is more about who gets to capture the created wealth:

- people who gave money to enable the activity leading to profit (aka capital)

- people who organize the activity leading to profit (aka management)

- people who actually do the work

Obviously, each of these groups has some legitimate claim to the added value, but it's also pretty obvious that over the last 50 years or so, the balance in the economy as a whole has tilted towards capital and upper management in a way that can't really be justified on an ethical basis. (Just look at how the correlation between wages and productivity disappeared in the 1970s.)

Well said. But:

> Just look at how the correlation between wages and productivity disappeared in the 1970s.

Isn't this explained by computerization?

The '70s? That's when Stallman was mucking around at MIT, right? Computers were happening!

Say 30 workers' productivity can now be reached by 1 worker at a computer. The company lays off 25, leaving only 5 workers. Those 5 workers are generating 150 workers' productivity for the company. But they're only getting 5 workers' salary (there has been no salary increase). Boom -- wages:productivity used to be 1:1, and now it's 1:30.

Consider how it also makes no sense FOR those 5 workers' salary TO increase significantly. Why should you pay them 30 times more than their pre-computerized peers? Their jobs may actually be easier than before, hours of indexing and searching replaced by filesystems and `grep`.

Is that unethical?

This also attacks the "we thought computers would mean we would get 2 hour workdays" meme. Equivalently to inflating their wages, why would you decrease their work hours?

These are things that, in the name of "ethics", can only be forced by unions or the government, depending on your level of adventurousness toward economic policy. (And your level of confidence in being able to arbitrate ethics. The communists were very hubristic about that one.)

Perhaps. But it was also still relatively early days for computers, and it was a time of union busting, macroeconomic upheaval, and a shift in dominant politics. There were certainly multiple causal factors at play.

You say that there are things that can only be forced by unions and governments. I agree!

We just need to keep in mind that at least some of the things detrimental to workers that happened 40 to 50 years ago were also forced by lobbyists and governments.

Losses are unethical

Good luck motivating people with anything else.

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