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Comment by ozi | Hacker News Reader

Completely flawed logic, but not uncommon from an employee standpoint. Pay should be commensurate to value an employee provides to a company. This is why CEOs make 100x+ entry level positions.

From the company's perspective, whatever an individual put into their experience is almost completely inconsequential if they are doing their job. In a healthy, functional market, pay isn't about "fairness", it's about bottom-line results, and programmers and engineers make the products and services these companies use to generate revenue which in turn creates demand and subsequently the available funds for legal counsel!

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>Pay should be commensurate to value an employee provides to a company.

I don't think that's how capitalism works. Your pay doesn't scale with your value, otherwise teachers and firefighters would be making bank. It's completely guided by supply and demand.

In an efficient market, those two are equivalent.

EDIT: Let's consider that "supply and demand" has artificially increased the price of programmers above their value. It's now a losing proposition for a company to continue to employ a programmer as the company is losing money, so the demand goes down and with it the price.

Conversely let's consider that the price of a programmer is artificially lower than his value. Any new company can come along and pay a bit more (but still less than actual value, for now!) and attract the best programming talent. Other companies must keep up in order to keep the talent, so the price returns to the actual value to the company.

> Other companies must keep up in order to keep the talent, so the price returns to the actual value to the company.

Uh, no, that is not how supply and demand works. See <http://en.wikipedia.org/wiki/Economic_surplus>.

The gap between what people are willing to pay vs. what people are willing to sell for is often substantial. People spend a lot of time fighting over the distribution of the value in that gap between consumers and producers (see, e.g., price discrimination).

Is "in an efficient market" the economic equivalent of the programmers' "with a sufficiently smart compiler"? It seems to be used in the same manner in arguments.

You need the concept of perfect market (or other models) to reason about things. "In a perfect market, x happens. y is not in line with the perfect market, so eliminating y (c)/(sh)ould bring us closer to x".

Replace x with "fair salaries" and "y" with "Tech companies making non-poaching agreements"

You seem to be confusing "demand" with "quantity demanded", at least in your wording.

A CEO does not deliver 100x more value than entry level employees. A CEO is in a position of power, which enables her to claim such a wage.

In theory at least, wage should reflect responsibility and liability within the company. If you go over those of the CEO, you see why they make so much more money. They should be held accountable for the wealth of the entire company.

As far as lawyers are concerned, their wages just reflect the fact that they (should) have been trained as A-list negotiators, and it is common practice for lawyers to have a fee based on a percentage of the deal they negotiated.

There is a corollary for programmers for the above: start-ups. Though not trained negotiators, skill and work ethic can get you far enough. And it is common practice to receive a percentage of the reward.

The grass always looks greener on the other side.

A CEO of a big company like Apple or Microsoft delivers way more than 100x value of entry level eployees. A 10% improvement at the CEO position would be hugely valuable.

No way. A CEO is held responsible for the decisions of EVERYONE under him/her by the board. A lousy programmer will cost the company a lot less than a lousy CEO.

The CEO is essentially the face of the company when things happen (good or bad) and has huge responsibilities. Managing a company is easy from the armchair.

That's a better way to see it. It's hard to see good management and its effects, but good management really does make a major difference. But it is so hard to see, that people sometimes don't even realize they need it. But to see the ability management has to change the outcome, look at bad management: they can totally destroy a company, no matter how good the engineers are. That people can see.

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