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50 sats \ 2 replies \ @justin_shocknet 1h \ on: Wage compression econ
I'm not sure this computes with reality, the definitions are pretty flimsy, especially when you consider data comes from large corps that employ a lot of bodies and their productivity is measured by business unit rather than individual.
Anecdotally I was on a team of 6, that on paper were overlapping roles with relatively similar titles... but as you can imagine the skill range among the 6 was not perfectly distributed. We could have gotten just as much done, or maybe even more with less bodies given there's always a percentage that are a net negative.
What's high vs. low skilled in that scenario when we're categorically the same in the eyes of megacorp? Why does the new guy get 80-90% of the salary of the guy without whom the whole unit falls apart?
Cost of living is probably a factor, a low skilled and high skilled person have the same baseline cost of living, getting paid more turns into lifestyle inflation. So there's an effective minimum for someone to sell their days to megacorp, and what megacorp can quantify beyond that is marginal.
Depending what's defined as high skill, the wage complaints contrast to compression... inequality. Top earners are pulling even further away from entry level workers because of asymmetry, someone that can engineer a widget that megacorp can sell a billion of is a billion times more valuable than someone that can turn a screw on said widget.
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I think much of can still apply or at least give you a framework for thinking about how the founder makes decisions.
You and a new hire have roughly same baseline cost of being able to show up at all- which can explain a slim difference in wage as I mentioned. But, as you pointed out elsewhere you both get paid exactly the same. That tells me there's something more case based than the compression phenomenon, the founder is a single person with a small team so the circumstances are acute.
They may not value the distinction in your skills, and even if they do, be unable to afford that "luxury" and prefer the added runway in flat wages vs short-term productivity enhancement you might offer.
Perhaps the project simply can't leverage your added skills, like a landscaping company hiring a seasoned excavator operator to dig ditches with a shovel because all they do are small jobs. If the new hire, or any replacement of you, is 80% of your talent that might be all they care about over the long term.
They may also view your 3 years experience with them as their equity under the premise that new/replacement bodies will be roughly where you are in 3 years (or less since they themselves become a better founder) by nature of having worked with them/on the project. I don't think you mentioned if this was a profitable company or a startup, but in startup land this would be highly common, particularly in a niche area where you must plan for taking 10 years to become an overnight success. That's also why equity is usually an outsized percentage of comp in startups.
Ultimately your wage/equity should be a function of what it takes to retain you, so if you think that should be more than your underling you are either more replaceable in the founders eyes than you think, or its a total blind spot on their end and you need to communicate that. There's no room for resentment either way. If they're wrong then you hold the leverage and can communicate that without fear because the market has your back. If your perception is wrong then they should be able to clarify that and you can rest easy that its not personal, just the circumstances.
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