Am I crazy for thinking it seems naive to not anticipate that current employees may not take kindly to people who earn half as much as them getting bumped up to their salaries?
I know what you're saying, but I've never understood this logic personally. How does someone else earning more money hurt you? It's not like a person doing better than you is taking your money.
We're nicely dressed chimps, obsessed with hierarchies and status. A lot of our sense of value doesn't rest with how we're doing in absolute terms, but in how we are compared to the people around us. And even recognizing this, I'd be pissed off if I busted my ass off and provided lots of value to a company for a couple years and a new college hire ended up getting paid more than me, which has happened before.
It reminds me of the view that poor people should be happy because they are still living a very high standard of wealth compared to some people in other countries. People have already created a list of problems with using an absolute standard; I'm sure many of them will carry over.
Also, it does impact you directly. As those around you get paid more, there is more disposable income which impacts pricing. Now, a hundred employees in a large city has zero actual impact, but the psychological resistance is already there because it will have an actual impact at larger scale (also could impact if there is a company store/cafeteria or such, but I don't think that applies here).
Then there is the notion of unequal raises. If someone else gets a 200% raise because the company has enough money, you are left wondering why you didn't get one. Did you not do good enough? Even if you already had a raise, if it was for some other reason, you are left wondering why you don't get one. Once again, even with a rational reason (because you were already making above the new minimum), the emotional damage is still there. Such a raise doesn't feel fair, regardless if it is or isn't.
Finally, considering how many times people are denied wages 'because the money isn't in the budget for it' (even if that is just used as an excuse), there is a chance one who deserves a raise can be denied it because the budgeted money for raises was already spent on other raises.
>How does someone else earning more money hurt you?
It's not that simple. The employees were already working under conditions that job/person a was worth 2x and job/person b was worth 3x. That was established and everyone was content (or reasonably so).
All of a sudden, someone declared that job/person a is worth 3x too, with no corresponding change to the output or expectations of either job.
Job/Person b, having been previously told that their value was, at 3x, MORE than job/person a, is now told that their value is now equal.
That's a redefining of the previously established contract of understanding. To expect Job/person b to completely agree to that redefinition is rather naive, to say the least.
I'm more valuable to my company as their key software developer than the receptionist. I've got more knowledge of how the company works, contribute more to the bottom line and am harder to properly replace. I expect my compensation to reflect that.
If you suggest all of a sudden that I'm not any more valuable than the receptionist hired last month, you should rightly expect that I'd be a little pissed.
How do you know how valuable you are? Or how much more valuable you are than the receptionist.
My assistant is ridiculously valuable. She's a multiplier for the team. Her presence means invoices get paid, visitor logistics are taken care of, contracts get renewed, the office is in order. I don't control her pay, but every hour she is present easily saves me a quarter hour, and probably saves my direct reports a similar amount of time.
Essentially that role for me is manufacturing an asset that I cannot buy -- time. If I could control her salary, I would double it.
Because in most cases he could learn to do her job in a few weeks, whereas it would take her years to learn his, if at all. Look what website you're on - people here write software to literally eliminate jobs in many cases, and to do so you have to understand that job even better than the person who does it, and then some. And this doesn't just apply to "menial" jobs - by the time a software developer is done implementing in a highly specialized field, they often fully understand the domain better than the experts.
Look, I understand the value of a really good personal assistant, at times they can be like magic, but let's be serious, all jobs are not equally difficult.
To elaborate a bit on this, the term economists like to use for this is "alternative choices". The minimum price of the assistant is somewhere around how much it would cost to hire and train someone to replace her - that is, her minimum price is set by the price of the alternative choices that the employer has. After all, it is irrational to hire an assistant at $2X who will produce Y output when you could hire an assistant at $X who will produce Y output.
On the other end of the scale, the maximum price is value of her productive output to the company - it is irrational to pay her more than she can generate.
Negotiation is the skill of convincing your employer that you're harder (ie, more expensive) to replace, thus propelling your pay closer to that maximum.
> If you suggest all of a sudden that I'm not any more valuable than the receptionist hired last month, you should rightly expect that I'd be a little pissed.
Then leave.
Seriously. If you are so upset then leave.
But when interviewing, you might want to come up with a different reason for leaving the job. The interviewer might not be so understanding.
Update: wow, a downvote. :-) I welcome the downvotes.
I understand that very human response and would probably feel it myself, but if your salary is 3x the receptionist's, you're still not technically getting paid 3x what he/she does, once you factor in a progressive tax rate and public services that are used disproportionately by lower-income people.
What this guy tried to do is in effect just raise the floor of the minimum wage, which is also unfair to you.
I think this was researched in numerous psychology studies.
All else being equal, people were happier earning $70,000 knowing that their peers earned $50,000, and unhappier earning $90,000 knowing that their peers earned $110,000.
I am likely wrong on exact numbers, but studies are well-known enough to be quoted in "Fooled by Randomness", "Predictably Irrational" and some other pop-psych titles.
The sudden change is another factor: if people had "always" been making much more similar incomes, or if the company gradually/quietly narrowed pay spreads over time, the results may be different than a sudden change from large pay disparities to much smaller ones. Some of it in my opinion is quite cultural, not purely psychological, based on background expectations of what wage spreads "should" be.
When I used to work in Denmark, I noticed expats were often much more annoyed about the (approximate) wage equality than Danes were. I was making $80k or so, and most people I knew were making in the $70k-$100k range, doing jobs ranging from professor to software developer. Meanwhile, a typical full-time restaurant waiter or construction worker might make around $50-60k. So, we had higher incomes, but not by a huge margin, certainly less than the spread would be in the US. Many expats found this grossly unfair, that despite them having a high-status and supposedly high-end job, they were still in approximately the same socioeconomic class as basically any other worker. They considered themselves underpaid, and the other workers overpaid. But most Danes didn't really see an issue, and considered the Danish wage spreads to be normal.
Well the assumption is that the old salaries reflected what you were worth to the company. So bringing those who were previously compensated as 'less important' up to the same as the 'more important' people implies that the relative importance of those who were previously paid more has decreased, acting as a sort of 'now all your years of experience are worth no more than the minimal experience your colleague has.'
Whether you agree or disagree, that's how I think those who are offended by this sort of change see it.
The arguments presented by the employees quoted in the article make it seem that it is exactly about someone else earning more money taking your money, not actual money but potential money. One of the high profile employees that left talked to Mr. Price about the fairness of newer employees with less responsibilities getting a dramatic pay raise while she and her co-workers, who have been at the company longer and have more responsibilities, did not receive a similarly substantial raise. It doesn't say exactly what Mr. Price said to her, but from her reaction ("He treated me as if I was being selfish and only thinking about myself") I would guess she got something close to "how does someone else earning more money hurt you?"
> I would guess she got something close to "how does someone else earning more money hurt you?"
I think that was in the article. If you work your ass off sacrificing your personal life for years helping build a company, at most companies there is a financial payout at some point for that hard work, but in this case, the money resulting from that hard work it seems is largely going to top up the incomes of the nine to fivers. I don't see how it's hard to understand that some people would be upset about these, it's pretty simple math (actual hourly pay based on hours worked).
Tons of studies show that it is not absolute pay, but pay relative to your coworkers which influences your feelings about fairness and your position in the company. Like it or not, that's how it is.
Do you not understand the logic of people who feel that way, or do you simply not believe in it yourself? If you were getting paid $35k/year to do the same job as everyone else who was getting paid $115k/year, would you feel that it was somewhat unfair?
So what you are really saying is the problem is people knowing other people's salaries? Because unless I'm the exception, the norm is not knowing what people are getting paid.
So, what you are really asking is: If you were getting paid $115k/year to do a job where $115k/year was the normal competitive salary in your area, would you feel that it was somewhat unfair?
I ask this because I wonder what would have happened if he'd not said anything.
For most of my career, my salary has been not only known to my coworkers, but to the public at large via the local newspaper.
The impact? Nothing at all.
The only situation where I would be concerned about it would be a case where the company discriminating against people or aggressively ripping the employees off. I've witnessed both.
The big argument here is that the 10x producers are pissed off about others benefiting. The reality is that most of these "10x" people are mythical, and the ones who are real are either getting screwed anyway or make a salary consistent with their value.
"So, what you are really asking is: If you were getting paid $115k/year to do a job where $115k/year was the normal competitive salary in your area, would you feel that it was somewhat unfair?"
^ How in the world did you come to that conclusion? oh_sigh's whole point was that a person would be upset if they knew they were getting much less compensation than others for the same kind of job.
I'm guessing you had a point there, but I'm not sure how the quoted phrase above is supposed to support whatever the point was.
> How in the world did you come to that conclusion? oh_sigh's whole point was that a person would be upset if they knew they were getting much less compensation than others for the same kind of job.
Well, yeah. But that assumes you know what other people are getting. As I said, I'm assuming most people don't know or share what they are making (at least in the US) with their coworkers.
So, for the average person, this really comes down to the question I asked as most people don't know what others are making (again, total assumption on my part).
And that all comes down to my last statement in my original comment, which I guess is really just a way of saying "ignorance is bliss." And if you are ignorant of what others are making, the question is really as I put it: If you were getting paid $115k/year to do a job where $115k/year was the normal competitive salary in your area, would you feel that it was somewhat unfair? Don't assume $115k/year is higher or lower (you don't know).
I'm not pushing an agenda or anything. Just really wondering.
Yeah, it sounds like we're asking to balance some pop psychology against a minimum amount needed for a middle class life. I would emphasize the latter, personally.
It means all of the previous sacrifices the good employees made were for nothing in the eyes of management. Therefore, there is no reason to work hard at all. It is better to go leave for a competitor that knows how to treat their hard working employees.
But if you were getting compensated fairly before, why are you no longer getting compensated fairly because other people got a raise? The most rational action would be simply to match your work output to your peers.
I mean if the market rate for the job you were doing is $70k, and all of a sudden fresh college grads are getting paid that at your company, it doesn't mean that you'll now get $100k elsewhere if you leave. If that is the case, you should have already left.
Now if you were already being underpaid and you were staying at the company for some other reason I could see bailing when others got a pay bump regardless of their contribution.
> If that is the case, you should have already left.
It's interesting how disingenuous conversations can become on HN. Where in one thread everyone will happily acknowledge that lots of developers work extremely long hours at startups for peanuts (in hopes of a possible big future payday) compared to what they could make guaranteed going to work at a larger established company, in another thread the mentality is that everyone is always optimizing for short term earnings.
I personally am happiest when I'm working 70-80 hours a week and appreciate being compensated for my hard work. Just because that doesn't describe you doesn't mean I should be forced to attain an artificial "balance."
> So, other people make more, and you'd make yourself unhappy in retaliation?
No, but I would start looking for another job. If the company has the excess profit to be giving out huge raises, I'd be upset that those raises were allocated only to low performers.
His value system is consistent with the cultural norm (higher pay for longer harder work). In my opinion you shouldn't act like he is the one acting strange.
First, I'm not forcing anyone, my opinion is completely inconsequential to your professional life.
Secondly, Ensorceled specifically said (s)he would start "enjoying the weekends", which implies the long hours were, unlike for you, not being particularly enjoyable.
There were a number of people making less than that at Gravity Payments; so it seems likely that there are other qualified people in the area who will appreciate the salary that you are now grumpy over.
In fact, apparently 1000s are applying to Gravity Payments hoping to take any grumpy person's job.
So if you are grumpy and 9-5ing it (as you said); why should Gravity Payments keep you?
How would your stated attitude help you work with people who did get a raise?
Who said I would be grumpy or toxic? Just working the same hours as my peers would actually probably make me less grumpy. I'd be very happy and grateful to adjust my effort downwards if I can keep my same salary.
1 - My productivity is X per month. (Whatever your definition of productivity, it must be, because I can ask for a bigger salary.)
2 - This other guy productivity is X/2 per month. (By the same rationale.)
3 - The other guy gets a raise, and now is paid twice for the same work.
4 - It follows that I'm losing the opportunity of a raise, because I do more than him.
It's not logically rigorous, it may not be true at all, but it's not an irrational reaction either.
I think it's more along the lines that slackers that are lower pay scale getting huge raises that could equate to a 200% increase, whereas top performers, people who get paid above the threshold already, get nothing really.
“The only time you look in your neighbor's bowl is to make sure that they have enough. You don't look in your neighbor's bowl to see if you have as much as them.”
Even if people are paid the same, when times are tough the true value of each employee will be obvious. It's also not unusually to "signal" value through other types of compensation.
One argument could be that the incentive to contribute to what used to be a higher-paid higher-skilled job goes away so now less people will do it, harming society as a whole.
No, not at all. I think it would have made more sense to give each employee a raise based on a percentage of their income. That way, everyone gets a pay raise, and you can give more money to the lower earners without offending employees because it is an equal percentage increase.
The higher earners receive a larger increase than they would have under a different regime (where everyone receives a constant $ increase [normalized for the "lowest earner"]).
Am I crazy to think nobody should actually care? By that, I mean the cost of caring about it is probably much higher than the cost of not caring about it.
I wonder if on the grave marker of humanity it will not read "THEY CARED TOO MUCH ABOUT SOCIAL SIGNALLING". The Universe is far too personal (and, curiously impersonal at the same time ) to care about whether other people are "winning". They'll get theirs, you'll get yours.
Whether you support a minimum wage increase or not, to think that it won't affect other people than those that are getting the increase just isn't true. Here's some possible side effects.
- Prices of products or services increase to compensate for the increase in salary.
- Higher paid employees don't get raises since the money that was previously allocated for that is being used to pay for the minimum wage increase. (This seems to be happening in this case, where more experienced workers received little to no increase in compensation).
- Other benefits are removed or reduced to cover the additional cost (health insurance, vacation, sick leave, etc)
- The company can no longer be profitable with the additional costs and reduces the size of their workforce or shuts down completely.
Which of these side effects (if any) occur, depends on the company and its current profits, management and/or investors, as well as how much they are already paying employees.
Or perhaps the company makes more money because the minimum wage workers are happier, work harder, and don't quit as often, leading to lower turnover costs, and because the company's customers (often minimum wage workers themselves) have more money to spend. Note the steady increase in restaurants and other food service companies in Seattle as the minimum wage increase phases in[0].
Ask yourself - If you are making minimum plus x and they raise the minimum to your salary mark, do you consider your worth to be "the minimum" or would you prefer your wage rise in tune with the increase?
My guess is the latter.
The argument against minimum wage increases is that it has a ripple effect and raises other wages as well.
Answer: It raises prices for everyone, because the vast majority of companies will not simply absorb the hit to profitability, assuming they even have the ability to absorb a cost increase that large at all.
It could raise your cost of living (e.g., housing) because now there are more people who could afford to pay a certain price for something than before.
I think it's great that it elicits that reaction in such a stark way, though - it will make more than a few of them wrestle with it and maybe get past it.
I can totally defend the desire to quit out of not wanting to have golden handcuffs, but quitting because someone "below" you is now not as far "below" you (or is now "shackled" to you, a ridiculous thought) is just spiteful and self-damaging.
I think it is - for the cited examples getting a raise from 40k to 70k, this is strictly better than what they had before,/but they're still complaining. Economic rationality has nothing to do with it.
