Ask HN: Why do people who work harder get less pay?
24 comments
In a word, leverage.
The janitor can clean one floor at a time, and that's all. No matter how hard he works at it, there's a pretty low cap on the value that can be created by this labor. Even if it's a really important floor, say the main hall of a fancy wedding establishment, only a limited number of customers can fit there to benefit from this labor, and so the job can only be worth a fairly small amount of revenue.
Programmers don't have that problem, at least if they're smart about company and industry and product niche. Joel Spolsky (let's say) can create a timesaving bug tracker, where his efforts incur a huge multiplier of value in leveraging the automatically scalable nature of software. Joel can rightfully get paid by the time saved and value created times a million users, while working less hard than the janitor who's cleaning for a few hundred folks.
CEOs and more broadly all of management operate on yet another level, in leveraging the contribution of many programmers. One programmer might write Microsoft Paint, and another Microsoft Word. Somebody realizes there's another layer of business value in embedding Paint images into Word documents, and coordinates the programmers to make that happen even if the Paint and Word developers aren't necessarily interested in integration. That's where the CEO gets paid, at least until the programmers become sufficiently business-savvy and motivated to do it without additional leadership.
The janitor can clean one floor at a time, and that's all. No matter how hard he works at it, there's a pretty low cap on the value that can be created by this labor. Even if it's a really important floor, say the main hall of a fancy wedding establishment, only a limited number of customers can fit there to benefit from this labor, and so the job can only be worth a fairly small amount of revenue.
Programmers don't have that problem, at least if they're smart about company and industry and product niche. Joel Spolsky (let's say) can create a timesaving bug tracker, where his efforts incur a huge multiplier of value in leveraging the automatically scalable nature of software. Joel can rightfully get paid by the time saved and value created times a million users, while working less hard than the janitor who's cleaning for a few hundred folks.
CEOs and more broadly all of management operate on yet another level, in leveraging the contribution of many programmers. One programmer might write Microsoft Paint, and another Microsoft Word. Somebody realizes there's another layer of business value in embedding Paint images into Word documents, and coordinates the programmers to make that happen even if the Paint and Word developers aren't necessarily interested in integration. That's where the CEO gets paid, at least until the programmers become sufficiently business-savvy and motivated to do it without additional leadership.
As a society, we haven't even stopped labor exploitation. You are asking for fair market already?
In most industries, manager vs worker unfairness exists for centuries and beneficiaries protect the trough with logic such as intelligence, leverage etc. In software, especially in silicon valley, the workers i.e. developers overtook managers, as there was no need for capital (where human capital is the only cost). Rest of the industries are yet to be disrupted as they don't have that advantage.
In most industries, manager vs worker unfairness exists for centuries and beneficiaries protect the trough with logic such as intelligence, leverage etc. In software, especially in silicon valley, the workers i.e. developers overtook managers, as there was no need for capital (where human capital is the only cost). Rest of the industries are yet to be disrupted as they don't have that advantage.
Put simply, how hard you work doesn't have a direct connection to wages or income.
I recommend reading http://steshaw.org/economics-in-one-lesson/contents.html
I recommend reading http://steshaw.org/economics-in-one-lesson/contents.html
- I would think that physical work is less hard than mental work. I mean anybody can clean a toilet, sweep floors. or lift up boxes but it takes more thought and intelligence to make a website or design an app. Like check out the wealth of nations by Adam Smith ~> http://www2.hn.psu.edu/faculty/jmanis/adam-smith/wealth-nati... . People are paid depending on their value. If we all can do the same job, why should I get paid more than you? But if I can do a job faster, better and with more accuracy, of course Im going to want to get paid more.
I've spent the last 2-3 years teaching myself the minefield of technologies around web development and I have 13 years experience as a technical trainer. last week I did two days working at an industrial factory that makes vitamins (don't ask). I did the compression, grinding, cleanup etc and all on a treadmill that you have to keep up with. Its dirty, you need to wear a face mask and a hair net. You need to make sure to be polite to everyone as their are many gang members that work there. The machine I was operating was literally manufactured in the 1950's (I heard the owner doesn't want to upgrade as the company is profitable and growing thus he is afraid to change anything). After the ordeal my legs and back were completely fucked and I was miserable. Everyone who works there does this for 40 hours a week. They do it for $8-$9 hr. I'm convinced they should all be getting $30-$50 and be given a free yearly pass to a gym. I disagree that this type of work is 'easier'. It may be culturally perceived as less valuable as it's not specialized, but it's not "easier" by a long shot.
Doesn't "easier" just mean that it is is less difficult to acquire such a job?
The problem with the post I made is that a whole swath of different assumptions can be made around the ideas surrounding it. It's definitely "easier" to get one of those jobs but it's harder to physically do them ....and they literally hurt after awhile. I can't imagine too much physical hurt coming from programming compared to heavy lifting or picking lettuce etc. So their is a bit of a yin/yang with regard to the assumption of what the word 'easier' means in this context. Yes they are easier to get, but they are harder to physically do and they can hurt (of course maybe if you're in really good shape this is not the case).
While I agree that the GGGP's "I would think that physical work is less hard than mental work." statement sounds like he is dismissing the challenges required in doing the work, his examples are more focused on it being because it doesn't require specialization.
Many people won't catch that, so I think that your response to that is generally helpful. The point of my previous post was that I don't think it was necessary to say that you disagree about "easier" because the two of you are talking about two different definitions.
Many people won't catch that, so I think that your response to that is generally helpful. The point of my previous post was that I don't think it was necessary to say that you disagree about "easier" because the two of you are talking about two different definitions.
supply and demand. all those jobs will eventually be replaced by robots anyhow.
> I mean if someone is doing more backbreaking work that's physically demanding wouldn't it make sense to pay these people more?
There's more, if we were to build and live in a rational/logic/just system:
Anybody who produces something that somebody is willing to buy on the market should get the same salary per hour worked, since every life has the same value (and therefor every hour of a life, too), where everybody would have the right to the same amount of education, "for free"/paid-for by taxes.
Now you might say "but, shouldn't the stronger/more intelligent/however better guy be paid more?".
No, because, it's not his merit/fault that he is the way he is: Everything in our lives is a function of 2 variables:
a) Our inherited/given genetics that were b) planted in a given environment, to logically lead to the result that is "us", today.
But we don't live in a just system. We're still stuck in the "money equals power" state of evolution, like some kind of a Middle Age of rational thought.
There's more, if we were to build and live in a rational/logic/just system:
Anybody who produces something that somebody is willing to buy on the market should get the same salary per hour worked, since every life has the same value (and therefor every hour of a life, too), where everybody would have the right to the same amount of education, "for free"/paid-for by taxes.
Now you might say "but, shouldn't the stronger/more intelligent/however better guy be paid more?".
No, because, it's not his merit/fault that he is the way he is: Everything in our lives is a function of 2 variables:
a) Our inherited/given genetics that were b) planted in a given environment, to logically lead to the result that is "us", today.
But we don't live in a just system. We're still stuck in the "money equals power" state of evolution, like some kind of a Middle Age of rational thought.
You are paid according to how difficult it is to replace you.
That's true in a general sense, but of course there are other factors, including:
- Your negotiation skill at the point when you accepted the role
- Your employer's cash flow (including external funding)
- How difficult it is for _you_ to replace your _employer_ (even if you can't easily be replaced, your employer may realise that inertia/market/risk-aversion/whatever)
- Your paper credentials (only for some companies, and only when you're early in your career so cannot be as easily levelled through observed performance).
- Your negotiation skill at the point when you accepted the role
- Your employer's cash flow (including external funding)
- How difficult it is for _you_ to replace your _employer_ (even if you can't easily be replaced, your employer may realise that inertia/market/risk-aversion/whatever)
- Your paper credentials (only for some companies, and only when you're early in your career so cannot be as easily levelled through observed performance).
Physical work: We have the technology which can create more powerful machines that are way more powerful than human muscles.
Mental work: AI field is trying to do same as we have done already for physical work part BUT it is still not there and even if reach a certain stage there will always be need for "humans mental power".
Mental work: AI field is trying to do same as we have done already for physical work part BUT it is still not there and even if reach a certain stage there will always be need for "humans mental power".
I think a general theme in life is that planning (and being able to do the work required of it) gets rewarded much more than how much effort is required to do something.
A few more examples of the phenomena:
* Trying to do something physical as an overweight and unfit person vs. someone who has already gotten into shape.
* Finding a job when you have a strong professional network vs. finding a job when you don't.
* Performing some computer operation multiple times manually vs. using/maintaining a script that was already written.
In all of the above cases, you're going to put in more work in the situation that required less planning while getting rewarded less.
A few more examples of the phenomena:
* Trying to do something physical as an overweight and unfit person vs. someone who has already gotten into shape.
* Finding a job when you have a strong professional network vs. finding a job when you don't.
* Performing some computer operation multiple times manually vs. using/maintaining a script that was already written.
In all of the above cases, you're going to put in more work in the situation that required less planning while getting rewarded less.
This is obviously a good point. It's also one that is based primarily on personal outlook of the people doing the work. I can see this point segue into a question about education and not the work itself pretty easily. I won't go into that.
Adding to the other excellent points in this thread, is the idea of scale / leverage / multiplication.
A janitor can only clean so many toilets per day or hour, or mop so many floors. And that's that. Most manual labor jobs have this type of heavy limitation.
I can write code once and scale it to infinity. Not literally, but I assume you understand the principle involved.
Mental labor, broadly speaking on average, will always be worth a lot more in an information or technology driven economy, than manual labor.
A CEO, Steve Ballmer let's say, makes decisions that extrapolate to adding or destroying billions in value. Ballmer has been with Microsoft at the highest of levels, involved in the most critical of decisions, and understands most of the company and its history inside/out like few others can or could. What's that worth for a $300 billion company? If the decisions being made are good, then it's worth an extraordinary amount.
How easy is it to find a good CEO to run Microsoft (and not destroy hundreds of billions in wealth)? Very hard. How easy is it to replace a janitor? Extraordinarily easy, and if you screw-up and hire a bad janitor, you can get a new one in about 15 minutes with one phone call at trivial cost.
A janitor can only clean so many toilets per day or hour, or mop so many floors. And that's that. Most manual labor jobs have this type of heavy limitation.
I can write code once and scale it to infinity. Not literally, but I assume you understand the principle involved.
Mental labor, broadly speaking on average, will always be worth a lot more in an information or technology driven economy, than manual labor.
A CEO, Steve Ballmer let's say, makes decisions that extrapolate to adding or destroying billions in value. Ballmer has been with Microsoft at the highest of levels, involved in the most critical of decisions, and understands most of the company and its history inside/out like few others can or could. What's that worth for a $300 billion company? If the decisions being made are good, then it's worth an extraordinary amount.
How easy is it to find a good CEO to run Microsoft (and not destroy hundreds of billions in wealth)? Very hard. How easy is it to replace a janitor? Extraordinarily easy, and if you screw-up and hire a bad janitor, you can get a new one in about 15 minutes with one phone call at trivial cost.
Playing a touch of devils advocate here.
I'm not really sure what 'scale' means in this context. I think a more realistic way to phrase it is "once I code something it's yours....and doesn't need to be done again". In short, you have a static snapshot of something that you can do whatever you want with.If it can be used to 'scale' your business then that's fine. In contrast a Janitor will always be needed to do the same tasks in a perpetual motion.Same with field workers etc. As to why one gets paid more than the other....I still don't know. :)
If you want to scale a fruit distribution business you will need to 'scale' fruit pickers just like a tech company would need coders. So I am still confused.
I suppose the assumption is that 1 coder can get your business further than 20 fruit pickers or janitors.
But...
You could replace many coders the same way you can replace janitors via Odesk, Elance etc. I know I'm making a broad stroke with that statement but I'm being contrarian intentionally.
As far as the CEO comment it makes sense but not because he's a CEO. It makes sense because of a broader social and psychological issue. He can do something that others can't albeit within a certain cultural context. This makes him valuable.
I'm not really sure what 'scale' means in this context. I think a more realistic way to phrase it is "once I code something it's yours....and doesn't need to be done again". In short, you have a static snapshot of something that you can do whatever you want with.If it can be used to 'scale' your business then that's fine. In contrast a Janitor will always be needed to do the same tasks in a perpetual motion.Same with field workers etc. As to why one gets paid more than the other....I still don't know. :)
If you want to scale a fruit distribution business you will need to 'scale' fruit pickers just like a tech company would need coders. So I am still confused.
I suppose the assumption is that 1 coder can get your business further than 20 fruit pickers or janitors.
But...
You could replace many coders the same way you can replace janitors via Odesk, Elance etc. I know I'm making a broad stroke with that statement but I'm being contrarian intentionally.
As far as the CEO comment it makes sense but not because he's a CEO. It makes sense because of a broader social and psychological issue. He can do something that others can't albeit within a certain cultural context. This makes him valuable.
There's only so much CEOs on te market with proven track record and obviously companies prefer them over unknowns. Also, for CEOs, even a small difference in skill/experience can translate to huge changes in financial results (via better decisions which affect the whole company)
The janitor's situation is exactly the opposite. Virtually anyone can do janitor's job and also skill/experience differences don't translate to company's higher profits. Hence, the pay for janitors sucks.
Programmers are somewhere between CEOs and janitors both in term of supply and impact on profit.
The janitor's situation is exactly the opposite. Virtually anyone can do janitor's job and also skill/experience differences don't translate to company's higher profits. Hence, the pay for janitors sucks.
Programmers are somewhere between CEOs and janitors both in term of supply and impact on profit.
Supply and demand. There are more people who can work as a janitor than demanded, therefore a lower salary. There are less people than demanded for CEOs, therefore a higher salary.
The short and easy answer is because wages/wealth has no necessary connection to how hard you work.
The tying of the notion of the cost of something to how much work goes into it is more or less the "labour theory of value", a notion traditionally tied to Karl Marx (these days) and classical economics. About the only place you'll see it brought up these days is either with die-hard marxists, or, ironically, people trying to justify their wage/wealth. The later do this because it seems almost ingrained in humans to assume that reward is tied to work somehow. We hate shirkers.
Economists of course know this theory is bullshit, but it seems it won't die, either from marxists, or as folk-economics among the general populace.
Wages are the cost to hire labour to someone with money. In that case, how much they want something (their demand) depends upon, more or less, the marginal value of that good (or the thing derived from it in the case of labour) and how much money they've actually got to pay for it. No money = no one really gives a hoot for your preferences/say.
On the side of labour, you've got few barriers to doing the job. Just about everyone can labour in the fields, work on the industry line, sweep the hall. There's not much of a barrier to getting such a skill. So supply is huge, and the relative productivity of most units are comparable to each other. Most people clean, work the field, etc, at about the same rate as each other, so the output of individuals is quite comparable.
Put them together in the simplest cases and you've got your answer: the marginal value of the field worker/janitor/industrial worker is worth very little to the people with the money on the demand side, and on the supply side, practically everyone (including most of the third world) can basically do it. And most of the third world are desperate to do it, so they'll bargain down quite low.
In a trivial sense, the case of programmers, and then above them, CEO's can be explained in this way as well. Programmers can do things that are relatively valuable to the people with the money. Not everyone can be a programmer. Its actually quite expensive to make a programmer. If you stop paying a certain amount, programmers will just go off and do something else.
In a more complex sense however, things get a bit more hairy. What is it that people with money value? Are they always correct? Why do they value those things? What about in jobs/positions where output/input is impossible to measure? Are they really so rational? Are those without money really powerless? What role do courts/police/judges/democracy/military play in all this?
The earlier provides an understanding of the basic economics. The later questions bring you closer to the truth, but I could barely touch upon them and do them justice in a HN post.
The tying of the notion of the cost of something to how much work goes into it is more or less the "labour theory of value", a notion traditionally tied to Karl Marx (these days) and classical economics. About the only place you'll see it brought up these days is either with die-hard marxists, or, ironically, people trying to justify their wage/wealth. The later do this because it seems almost ingrained in humans to assume that reward is tied to work somehow. We hate shirkers.
Economists of course know this theory is bullshit, but it seems it won't die, either from marxists, or as folk-economics among the general populace.
Wages are the cost to hire labour to someone with money. In that case, how much they want something (their demand) depends upon, more or less, the marginal value of that good (or the thing derived from it in the case of labour) and how much money they've actually got to pay for it. No money = no one really gives a hoot for your preferences/say.
On the side of labour, you've got few barriers to doing the job. Just about everyone can labour in the fields, work on the industry line, sweep the hall. There's not much of a barrier to getting such a skill. So supply is huge, and the relative productivity of most units are comparable to each other. Most people clean, work the field, etc, at about the same rate as each other, so the output of individuals is quite comparable.
Put them together in the simplest cases and you've got your answer: the marginal value of the field worker/janitor/industrial worker is worth very little to the people with the money on the demand side, and on the supply side, practically everyone (including most of the third world) can basically do it. And most of the third world are desperate to do it, so they'll bargain down quite low.
In a trivial sense, the case of programmers, and then above them, CEO's can be explained in this way as well. Programmers can do things that are relatively valuable to the people with the money. Not everyone can be a programmer. Its actually quite expensive to make a programmer. If you stop paying a certain amount, programmers will just go off and do something else.
In a more complex sense however, things get a bit more hairy. What is it that people with money value? Are they always correct? Why do they value those things? What about in jobs/positions where output/input is impossible to measure? Are they really so rational? Are those without money really powerless? What role do courts/police/judges/democracy/military play in all this?
The earlier provides an understanding of the basic economics. The later questions bring you closer to the truth, but I could barely touch upon them and do them justice in a HN post.
I really liked how you challenged the assumption of the entire post. I was waiting for someone to do that. This post was partially motivated by some personal situations but also because of an email exchange with an entrepreneur that was insisting his economic comfort was due to 'working his ass off'. When I mentioned that field workers work their ass off and are basically poor, he didn't respond. So I guess you had that one sussed.
Thanks. I dropped out of my CS degree at university and did economics instead, and now i straddle both worlds :P
I say with no ego or pride that I've heard just about every economic theory/justification there is from discussions with the rich and the poor. On the one hand its fascinating how most of the world is driven by relatively folksy beliefs. Its also fascinating to me how relatively devoid of economic knowledge most programmers, and indeed people, are.
The "I work really hard" is a standard refrain in discussions with relatively wealthy individuals in justifying their wealth. I would place it almost at the level of a basic emotive response. Perhaps its trying to respond to an innate notion of fairness in the human psyche that needs addressing to explain obvious inequality. Either way, it keeps getting trotted out despite being obviously disprovable and also being not the way that entrepreneurs or businessmen pay their own staff, so it was a good bet from you were talking to someone in just such a scenario :P
I say with no ego or pride that I've heard just about every economic theory/justification there is from discussions with the rich and the poor. On the one hand its fascinating how most of the world is driven by relatively folksy beliefs. Its also fascinating to me how relatively devoid of economic knowledge most programmers, and indeed people, are.
The "I work really hard" is a standard refrain in discussions with relatively wealthy individuals in justifying their wealth. I would place it almost at the level of a basic emotive response. Perhaps its trying to respond to an innate notion of fairness in the human psyche that needs addressing to explain obvious inequality. Either way, it keeps getting trotted out despite being obviously disprovable and also being not the way that entrepreneurs or businessmen pay their own staff, so it was a good bet from you were talking to someone in just such a scenario :P
I don't know, there definitely seem to be people 10x as effective at cleaning as I am...
Read about the "labor theory of value" vs the "subjective theory of value".
The amount of work put into something doesn't define something's value. Something is only as valuable as what another person is willing to pay for it.
The amount of work put into something doesn't define something's value. Something is only as valuable as what another person is willing to pay for it.
I have my own answer but I thought I would ask and see some of the responses.