> How could you possibly determine how much value your efforts are producing? How much value are you assigning to the risk the founder and investors are taking? Maybe your $200k job is producing $200k in value. Or even less.

I'm not disputing that there's difficulty, and that it might not always be possible (although we can often estimate and assign a confidence level). But the parent comment claimed that even if we did know, value shouldn't pull salaries up: that's what I'm responding to (side note: the parent also implied that we can know what values are, since he acknowledged their use as a floor for salaries).

In college I spent a couple summers doing repair work in the shop of a family friend. I got stuck with a boondoggle repair and when it got into day 2 that I was still working on it, and the manager got pissed off and tried to take over for half an hour before he figured out why it was taking me so long. Then we had a shocking conversation about the fact that while he was paying me $x/hr, I needed to be booking at least $10x/hr in repairs, so I needed to work faster. It seemed so unfair to me until I spent a lot more time working in small companies.

The repairs were a profit center, and the labor I was billing was keeping the utilities turned on, buying replacement tools, consumables, paying for my lunch break, covering rework, a hedge against me injuring myself, paying for the shop van I used to run inventory between stores, paying taxes, business licenses, my manager's salary, the owner's salary, paying for Bob to wander over and consult on a repair I wasn't sure about, paying the interest payments on the loans, and covering the loss leaders that got us repeat customers who needed repairs in the first place. Things like trade-ins and entry level equipment.

At your programming job, every manager above you in the chain, every support team that you use to get your work done are all being paid out of the money billed for you. Yes you may be writing $1M in software a year, but the company wouldn't exist and you wouldn't have any sales without those other people, so all of that overhead gets subtracted from your value. Ironically and possibly painfully, a company can exist for months without a single programmer, but it can't exist long without a management chain.

I don't disagree with any of this. I'm not saying that if an engineer writes software that increases profits by $1MM then they have realized $1MM in value: it's a team sport. But I don't think that prevents us talking at all about the value of the work that is done in a job.

Do you have quarterly goal setting reviews? People generally find that a formal process such as this will answer the questions you pose.

For example, you may discover that someone else got that promotion that you were eyeing, because they provided 15x value compared to you - 7 patents, 3 products architected that opened up new areas for growth, etc.

> Tech companies always pretend it's impossible to find employees. That's not reality, though. That's a political strategy.

Genuinely interested to hear an expansion of this. How would pretending that technical employees are hard to recruit, benefit a company politically?

If you can convince the general public the tech industry will wither on the vine for lack of skilled labor, you can get Congress to raise the H-1B cap, allowing you to drive down your labor costs.

"How much value are you assigning to the risk the founder and investors are taking?"

Absolutely 0, because they're not the ones doing the work.

Really? You think people should risk their money without compensation? Where can I find such people?

And what makes showing up at the office and typing on a keyboard such a holy use of time that it alone deserves compensation?

I do not believe that you shouldn't get any compensation, but the idea that simply having money entitles you to the lion's share of the compensation, above and beyond those that actually do the damn work, is idiotic.

"And what makes showing up at the office and typing on a keyboard such a holy use of time that it alone deserves compensation?"

The fact that it actually makes the damn product.

... so does the money. There's no keyboard typing without the money.

I know what you mean. It's the current system that's messed up, that just by holding money you can create money. It generates all kinds of fucked up inequalities.

You can't create money by holding money. You create money by risking money. There's a huge difference between the two.

You create money by borrowing. You win money by risking money(). You earn money by being useful in what you do.

) In Icelandic, "win" means "work".

This is pleasingly precise, but besides the point.

Holding money generates nothing, you have to at minimum risk it in a savings account or the index, or for real gains, playing roulette on a start-up.

Yes there is risk...but so much investment is made by those that can afford to risk it..that is the risk of losing the investment is not losing your home and car or being thrown to the street. If risk is defined by surplus money alone then yes, investors take risks, but if you define risk as the chance of losing your livelihood and basic needs? Typing on a keyboard entails more risk.

When the poor takes an investment risk of $1000 they risk more than some elite putting up $1000.

No, it's the money itself which is risked. Everything else is adjacent. How much the specific individual holding the money actually values it is irrelevant. It's how much that you value the money that's relevant.

What is $1,000 worth to you? Now, that question has a wide range of answers. In some places, that's literally worth multiple lives. Or it could be beyond insignificant.

Obviously very few can or should take a personal investment risk of 100% or more of their net worth.

You are arbitrarily limiting the scope of risk to a unit of account without regard to what those units of account do or do not afford one in the world. That is too limited a definition to be useful IRL.

What I was trying to get at is that the value of money is both absolutely consistent (unit of account) but also completely situational ($10 can save a life). At the same time, the IRR of investing on public markets, like an index fund tracking the S&P 500, is exactly the same for everyone, and anyone can invest 10% of their net worth, whether that is $1,000 or $10,000,000.

The original comment was that holding money generates nothing, you have to risk it, and I completely agree. You can risk 20% of your net worth and you're not risking your livelihood, and odds are in ~8 years your investment will have doubled, and your net worth increased by 20%. For some people that's a thousand dollars, others it's ten million. If you want to double your net worth in less than 30 years, you're going to have to risk a lot more. Everyone has access to the same returns on the public market (and we restrict access to private markets for very good reasons).

So it's a literal definition of risk, and as a percentage of net worth it works well. The problem of massive wealth inequality to me is completely adjacent to risking capital in return for investment returns.

In truth my original comment was to point out that the holding money comment was misunderstood to mean keeping money under a pillow when I took it as it takes money to make money, and those that have money risk little in terms of their physical welfare.