Gravity Payments in Seattle Is Raising Minimum Salaries to $70K | Hacker News Reader

Gravity Payments in Seattle Is Raising Minimum Salaries to $70K

mobile.nytimes.com

44 pointsmatt_morgan51 comments

Already posted and discussed here a few hours ago:

https://news.ycombinator.com/item?id=9371854

So to the person who is currently making $75k and watching their coworker getting a $30k raise does what, exactly? Suddenly that person is worth 66% more, so what about everyone else? Come salary review time, I'd be asking for a huge raise, because clearly the company has the cash to throw around, and if they're handing out 50+% raises, my value must have also increased.

If you read the article, you'll note that they don't actually have the cash for this. The CEO is taking a massive paycut to make it happen.

That being said, that kind of logic demonstrates an incredible lack of caring for the people who are benefiting from this. I presume you make more than $70k a year, and you fail to understand what it's like to live on less than $48k, as half of his employees do, in a city like Seattle. Making sure his employees are well paid makes a huge difference in their lives in a way increasing someone's salary from 75k to 95k just doesn't.

The two aren't mutually exclusive. A skilled employee can both be happy for their coworker who is now living comfortably, and upset that they draw the same wage with twice the experience and domain-specific skills that their colleague doesn't possess.

To put it another way, why invest time and money into education and specialized skills development if you can draw the same wage for an entry-level job with fewer responsibilities?

You might have twice the experience, but if the value of your output and your coworkers output is the same, why should you get paid more?

You shouldn't, and that isn't my argument. If Gravity was paying some people $40k and some people $75k for the same work and result, they were being economically irrational. I'm saying that the $75k worker, up until today, was someone who likely commanded $75k because a) their training and experience allowed them to do productive work that exceeds that of entry-level workers, and b) they are harder to replace than entry-level workers.

If your employer says "your value to this company is equivalent to the value of unskilled entry-level workers", when you are in fact a highly trained and experienced worker, that may well be difficult to swallow.

> You shouldn't, and that isn't my argument.

That is your argument. The company decides what it values, not you.

> If your employer says "your value to this company is equivalent to the value of unskilled entry-level workers", when you are in fact a highly trained and experienced worker, that may well be difficult to swallow.

Your value doesn't necessary map to your training and experience.

That's the point. The value of the output of various workers in various positions is NOT the same. Often that comes as a result of considerable effort, btw. That difference is naturally reflected in pay.

> That's the point. The value of the output of various workers in various positions is NOT the same.

The company decides the value, however, and they pay according to that. Are you suggesting this is not the case? This is literally how practically every company I know of works.

I don't know how it is possible that you read what I wrote and came away thinking that.

Average salary for a programmer in Seattle is $72K according to GlassDoor.

Why should a mailroom guy make the same as a programmer? The programmer had to go to school, learn his craft, keep up with the latest technology, learn several different languages, fix bugs at odd hours, forced to learn new things or be obsolete, etc. The mailroom guy just sorts mail and packs boxes. Why should they be paid the same?

> Average salary for a programmer in Seattle is $72K

> Average salary for a software engineer in Seattle is $92K

And Glassdoor 'salary' doesn't include bonuses or equity.

http://www.glassdoor.com/Salaries/seattle-software-engineer-...

> keep up with the latest technology, learn several different languages, fix bugs at odd hours, forced to learn new things or be obsolete,

These are not the programmers making <= $72k/yr

Why is "should" relevant here? Why is the free market sacrosanct, except when someone makes a decision you don't like?

Anyway, there are plenty of programmers who haven't honed their bodies in a way to make them competent mailroom staff.

A couple of things: The article mentions salaried employees. Maybe the have no hourlies.

Two. However things work out, we can be happy for the workers who got a pay raise. Maybe other cos will follow suit and lessen the spread between upper mgmt and kind worker pay.

The current trajectory of increasing disparity does not bode well for the middle class or the lower classes both of which are experiencing an economy squeeze compared to their late sixties counterparts, in real terms.

> So to the person who is currently making $75k and watching their coworker getting a $30k raise does what, exactly?

Congratulate their coworker.

> Suddenly that person is worth 66% more

No. That person is finally getting paid what they're worth.

> so what about everyone else?

What about them? Did they suddenly lose money?

> Come salary review time, I'd be asking for a huge raise, ..., and if they're handing out 50+% raises, my value must have also increased.

Why would your value raise at 'salary review time'?

> because clearly the company has the cash to throw around

Why do you think it has money to throw around? If the company hires someone else, do you think the company has cash to throw around?

You're making a bunch of illogical statements that make bad assumptions.

Start with this: how does one person getting a raise increase your value later on? How does hiring someone else increase your value later on? Unless you can answer these two questions satisfactorily, you are just being petulant.

> No. That person is finally getting paid what they're worth.

I dunno about that, sounds like they are just getting paid more.

> I dunno about that, sounds like they are just getting paid more.

The free market has always been shitty about getting money to people who "deserve" it versus people who acquire it. If you think a high-paid lawyer is somehow worth the same as elementary school teacher, you should agree with the reduction in the massive disparity of salary. If you honestly think the lawyer is "worth" more, I don't want to know you, be around you, or have to interact with you at all.

I think salary and compensation don't correlate to the worth of a human being, but they do directly correlate with the value that the human being provides to a company. I feel pity for you if you consider your salary or other compensation a representation of your worth as a person. Do you think an elementary school teacher and a lawyer are 'worth' the same in the courtroom?

Wait, what? You seem to be saying that person who was making 45k was getting paid less than they were worth. And now that they are paid 75k they are "finally" getting paid what their worth. And the person who was previously making 75k was getting paid exactly what they're worth before and after? That seems like a bold claim. How convienent that everyone happens to be worth almost exactly the same.

It seems to me that the person who got the huge bump is now getting paid more than they're worth. If person A is getting paid 66% more than they're worth and person B is getting paid only what their worth then person B is going to be upset. Maybe they shouldn't be, but they absolutely will.

Zero-sum thinking like this is probably not healthy for anybody. If you're unhappy simply because your neighbor is better off, even though he hasn't actually taking anything from you, then a little bit of self-reflection might be in order. I'm not attacking you specifically, just speaking in general terms. Anyway I think the point being made here is that an employee's compensation shouldn't only be thought about in terms of what's best for the company's bottom line (employee Jon Fish provides the company with a value of X dollars/year, the least we can pay him without him quitting is .4X dollars/year) but also in terms of what's best for the employee's quality of life. That's what's radical and interesting about it.

i feel like this is a zero-sum situation though, since they're all employees and not owners, which means to a certain degree, the decision by the employer/owner to give more to one employee usually necessarily means giving less to another. to be more pedantic, you could even say the employer doesn't necessarily give less to another but HAS less to give or allocate to another employee.

the situation of course changes if we're talking about part owners as well, then the argument does get a little murkier since it can be argued that improving the overall morale of the lower paid employees will bring about improved productivity and thus eventually lead to improved sales/revenue/profits, which ultimately benefits all the owners.

>> Come salary review time, I'd be asking for a huge raise, because clearly the company has the cash to throw around, and if they're handing out 50+% raises, my value must have also increased.

Nope. The company isn't increasing those people's salaries because they are suddenly more valuable. It is doing it so that they can actually live somewhat comfortable lives in an expensive city.

Other than that, I would advise that you stop looking at salaries as a way to compare yourself to others. You will be a happier person.

If you were making >2x the cash your colleagues were, you are DEFINITELY overvalued.

That's a ridiculous statement without an evaluation of the economic contributions of each employee and the availability of employee alternatives for each position.

It's almost as if economic contributions have NO RELATION to someone's worth.

Are you making an argument for the labor theory of value?

Not really. It depends on the value you bring to the company for your work and the difficulty in replacing your skills. I happily admit there are surgeons making much more than 2X my salary, and think that it is entirely appropriate.

Yes, and most companies are utterly worthless. I'm trying to point out that worth is obviously different than market value.

> most companies are utterly worthless

Hard to argue that point, but they are at least worth enough to be paying their employees salaries.

> I'm trying to point out that worth is obviously different than market value

And yet, market value is what determines pay-scale.

well said. giving undeserved raises erodes the believe in hard word generating better returns then just hanging out. it would certain make me look elsewhere if everyone else was grossly rewarded for their work(above the industry standard for their position) and i was paid on par with my peers at other companies.

I'd be concerned about what will happen if someone currently making $35k either loses their job or has to change jobs. Their lifestyle will (theoretically) be adjusted to an artificially inflated income which they will more than likely have trouble finding somewhere else for the same work.

As someone who has been above and below this mark. I truly hope that more companies and influential individuals follow this and start taking action. Freeing those of stress of things that shouldn't be stressing people in this era.

I understand that the study was actually about household income. If my wife already has a good job does it follow that I shouldn't get paid?

As a thought experiment: What would happen if all companies did this? If this was the actual minimum wage?

Is there enough economic activity to support it nationwide? I would have to guess so, considering the volume of people who make drastically more than this. What kind of impact would such a massive redistribution of income have?

It's interesting to ask this company, which I didn't get in the article - was this intended to be a minimum wage or common wage? The CEO was getting it too. The ramifications of each are quite different.

Plenty of folks would be perfectly happy flipping burgers instead of going to college, so there would be fewer qualified folks for the positions which currently pay 70k, so those salaries would go up (since supply would be going down), so some of those businesses would go bankrupt, etc.

A burger flipping job isn't a bad job simply because it's paid badly. It's boring, unfulfilling, tedious and people don't respect you for doing it. People would still go to college to get jobs that have those things.

Arguably a high minimum wage would mean no one would want rubbish burgers any more, so perhaps burger flippers would have to retrain as chefs. That wouldn't be such a bad thing.

> It's boring, unfulfilling, tedious and people don't respect you for doing it.

You can say the same thing about any job. I program. It's a terrible, worthless, respectless job. And yet, they're paid more.

but instead of rubbish burgers costing $1.50, they will now cost $3.00

> It's boring, unfulfilling, tedious and people don't respect you for doing it. People would still go to college to get jobs that have those things.

Ha, they'd give up on years of income and pay tuition for that? Nope, I think a lot of people either wouldn't care enough, or just wouldn't be able to afford the opportunity cost. For many of the people whom a 70k minimum wage would affect, college is a financial investment, not a route to lack of tedium as an accountant or whatever.

"QED"

If everyone made $70k though, wouldn't the amount of "buying power" that $70k commands now go down/prices of things would go up?

I would rather be able to buy less for myself than far more than my peer.

So, I'm your peer. You can send your extra money to me. That's how it works, right? (Do you need an address, or do you prefer PayPal?)

Yes, and I do contribute to charities. Somehow I doubt that the average HN writer needs anything.

You don't understand the parent's comment. Check my other comment.

Prices would adjust and everyone's purchasing power would revert back to what it was before the increase. Your standard of living would be the same while your paycheck has more digits.

This is false, because you are ignoring the fact that raising the minimum wage flattens the distribution of wages. Purchasing power decreases, but only low-wage-earners income increases. higher-spending people feel more of a crunch, and lower-income people get more of the benefit

price increases impact higher-spenders more than lower-spenders

> What kind of impact would such a massive redistribution of income have?

Surely this would have terrible inflationary effects. Not that I'm against it.

It seems like a flaw with Capitalism. In it's pure form, it leads to extremely wide wealth gaps. If history repeats itself, and conditions worsen, perhaps we'll see a repeat of the robber baron era which would then, as it did in the past, lead into an strong socialist reaction (unions and social welfare programs). Feels like a cycle.

What part is the flaw?

The flaw is that it always leads to extreme income inequality. There's no inherent mechanism to prevent it.

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