> After a million dollars or so in salary, the absolute amount that a person is paid has no real impact on their life. They can't eat more meals in a day or wear more shoes. What matters to the manager is the relative amount.
Sure, nobody needs more than a million dollars in annual compensation (in 2024 dollars), but relative amount gets you to your never need to work again number faster or slower. You might still work after you don't need to, but it's nice to not need to. And of course, there's economic milestones to be had like flying first class, flying charted, leasing a jet, owning a jet. Those certainly have an impact on your life, depending on how much you travel; and you might travel more if you didn't have to wait at the airport for a flight.
I think this over-estimates the amount required to live a luxurious life in perpetuity.
Consider the case of someone wishing to live a luxury lifestyle in the trendy lower east side neighborhood of manhattan. We'll use a 1300 sqft 3 bedroom condo as a baseline.
This condo will cost 8k/month with a 20% downpayment at todays interest rates, leaving our hypothetical million dollar a year salary person with 52k/month post-tax. Assuming they live a rather luxurious lifestyle of ~16k per month, they will still have a savings rate of 60%. Leading to a retirement in 12 years with a portfolio of 7.8 MM.
If the person makes 10x this value or 10MM per year... Then they can retire in 1 year. At 100 MM, they can retire in ~2 months.
You can play with the numbers a bit, our hypothetical 1MM/year individual would be living in the "average" 3-bedroom apartment for the Lower East Side. Perhaps the 10MM/year individual would choose the most expensive unit which is only ~4x more expensive, and increase their spending to 90000 per month - equivalent to a new model X per month.
I work in finance and know a bunch of people who made more than 10 million a year for a while, and they all tell you exactly that: very quickly, you have way more than what you'll ever need, and having more money has zero impact on your personnal lifestyle.
They already have the house(s) they wanted, the cars they dreamt of, and the kids in the expensive schools. Plus being in finance, these people make more money with the money they already have.
Of course, there's always the dumbass who just bought his 20th ferrari, but that's just something else entirely.
This, I can't believe all these "money doesn't bring you happiness after a certain level" tropes keep ignoring saving and investing angle, just lazy. Or accumulating wealth for your kids.
flying first class, flying charted, leasing a jet, owning a jet
Perhaps counterintuitively, going from first class to charter/leased flights is a safety downgrade. Search for accident statistics on the NTSB site and you'll see that Part 135 flights (smaller aircraft, including business jets) have 3-4x the accident rates compared to Part 121 (large air carriers), arguably because Part 121 regulations are much more stringent. Here[1] is a very recent leased jet fatal accident, for example.
Yeah, a million dollars a year is not anywhere close to where having more money doesn't impact you.
If that's $600K after taxes, and a year of college for a single child costs $80K at an excellent school, and you've got two or three kids, and housing in a major metropolitan area...
I mean you're definitely living very comfortably, but there are still lots of ways to spend money that have a big impact on your life, between your home and child care and your vacations and your comfort in traveling.
If the number is $25 million, then sure there isn't much more difference. Probably even $5 million. But $1 million still has plenty of room for very meaningful life improvement, that isn't anywhere near private jets. Not that you need, but that it's entirely normal to want.
Consuming without working for it is immoral, flying privat jets and traveling more is bad for the environment. Those are not reasons in favor of higher salaries.
I've said this before, but the managing director of the Norwegian Pension Fund - which currently sits at a cool $1.56 trillion, has a $657k salary. Nothing more, nothing less. The return for last year was around 25%
Some of the fund managers there make more than the managing director, but still, we're talking about a "modest" figure in the $1mm-$2mm range. That's paltry pay compared to the big bucks made in hedge funds and private equity.
The pension fund could have paid out hundreds of millions to their fund managers, and it would only have been a rounding error in the grand scheme of things...but still they manage to attract top talent.
There's this culture on Wall Street (or Connecticut, or London...) that they are the only ones that can bring big returns, because they're the right combination of correct pedigree, professional experience, network, talent, etc.
In the end, it's just good salesmanship. Tons of funds deliver mediocre returns, while making bank.
Yes of course, not everything is about money. There's also 1) prestige and 2) the promise of future money. The Norwegian Pension Fund specifically is very prestigious, and it promises that anyone who can do a good job with $1.5tr probably can also do a good job at one of those 100bn fund that do pay 10m/yr.
Is the manager of that fund really "top talent?" How hard is it really to make 25% off of $1.6 trillion? I'll bet you could do it.
Also, that's a very different job than working at a hedge fund. Hedge funds have to attract investors. How do they do that? By saying, "look at the expensive managers we have!" A government pension fund doesn't have to do that.
The talent available for this position far outstrips supply. So the jobs go to the credentialed children of the elite, who of course require hefty compensation.
In the age of index funds outperforming hedge funds, the real question is how long they can keep up the grift.
It's pretty absurd of him to talk about how it's ridiculous that people are paid $50mil (I agree) then pivot and say that $120,000 per annum for a new grad is another example of "ridiculous comp." These things are not in the same ballpark, they are qualitatively different.
I don't know the author but this is so bizarre it makes me question their analysis overall.
"Law firms went through this cycle twenty years ago."
The reference was to new law grads 20 years ago getting $120k jobs. That indeed was a high starting point for most recent grads from most fields 20 years ago.
In his defense, he (should be, at least) talking about relative pay for each job. It's like talking about the price of milk and the price of caviar (or some other expensive and rare food, I don't know). You can find both at prices that you would call ridiculous and at prices you would say are a good deal, but those prices would never be in the same ballpark. A wise consumer can save money on both by shopping around.
> After a million dollars or so in salary, the absolute amount that a person is paid has no real impact on their life. They can't eat more meals in a day or wear more shoes. What matters to the manager is the relative amount.
Take the now-defunct "American dream" of a single-income family with 3 kids living in a house with a backyard, say, in Silicon Valley and other places that have mobs paying more than $1 million to people, and that goes away pretty quickly.
After tax, with standard deduction, and 5 allowances, that $1 million turns into $529k net. With a $7k rent plus $5k in personal expenses per person (pre-school tuition alone is about $3k, so $5k in personal expenses is not outrageous), that leaves at most $145k in savings.
With a $12k mortgage (the median price in Santa Clara county for all residential is $1.4 million, I'm using $1.8 for a house), that's down to $85k in savings if you live frugally.
But, as other people say, there's more to life than food and shoes.
> that's down to $85k in savings if you live frugally
Saving $85k per year, which is way more than the median income in the US, is fantastic for a family of 5, while simultaneously building equity in one of the most expensive markets.
And $5k in personal expenses per person per month is hardly living frugally, especially for a 1-income household where presumably child care (and pre-school) isn't necessary. I don't live in an HCOL area, but non-discretionary expenses for just me, besides rent/mortgage, are about $1200/month. Food and clothing aren't 4x as expensive in SV are they?
But isn't that the "relative" point? A house in Santa Clara doesn't cost $1.4M because it's 3x better than a house in another state, or costs 3x as much to build. It's because there are a lot of other high-salary people in the area who need a house and not a lot of houses being built.
I guess I'm not sure that there's a practical difference between "It's marketing" and "This is what the market rate is for a CEO." In other words, firms need to pay this much because that's what other firms are paying (at least.) That's not marketing - that's just the unfettered market at work. Which is why it needs to be fettered. I agree with the salary cap idea, because the market will naturally keep raising the price without bound unless there's something to counteract that, and it is terrible for the labor market as a whole (and even the company as a whole) to be paying so much for a CEO when the same amount could buy dozens or even hundreds of workers.
A salary cap doesn’t change the market rate! It just obfuscates it.
Salaries for public companies locked at 10M/yr? Ok, now firms have to compete on amenities. (Your current firm gives you a free car? Ours gives a jet, a personal Michelin star cook, and complimentary beverages)
How about no salary cap but a maximum difference factor between the highest paid and the lowest paid in any company?
Not sure what the figure should be (x10?, x20?, x50?, x100?). That way companies that want to pay higher saleries to their CEO would have to increase everyone's salary.
But there would need to be a way of stopping companies just using shells and subcontracting all the real work to low pay subsidiaries.
> After a million dollars or so in salary, the absolute amount that a person is paid has no real impact on their life. They can't eat more meals in a day or wear more shoes
There is more to life than food and shoes? This is one of the dumbest things I’ve read.
It does apply to many things. You can only wear so many pairs of shoes, and only one pair at a time. You can't eat more food than will fit in your stomach. You can have X houses, but you can only live in one at a time.
If money isn't the bottleneck anymore, something else becomes the bottleneck - time, space, energy, interest/passion, etc.
> (Aside: should the guys who drive an armored car that carries millions of dollars in bonds get paid more than the guys that drive an armored car that only carries thousands of dollars in cash? Does the amount of money handled change the difficult of the work?)
Possibly, yes. The amount of money handled might affect the likelihood of a heist, and the required preparedness of the robbers. Which in turn requires more skilled drivers facing a higher risk.
If the trucks are otherwise identical the thing you should be most worried about is insiders. The cash being more fungible means you maybe should pay the cash drivers more, so they're never tempted to skim off the top or sell details to the heisters.
Truly a mindless article. Money attracts talent, doesn't matter what the historical rates have been or what the absolute cost to live is. If a good person can get 50 million instead of 3 million they're going to take it.
For the record, not everyone is like this. And - one hopes - many of the most talented are not. I've pulled out of an interview process for a job paying 3-4x (with upwards potential) the job I took, because I saw more meaning and social value in the latter. The content of the job can be more important than the salary.
> (Aside: should the guys who drive an armored car that carries millions of dollars in bonds get paid more than the guys that drive an armored car that only carries thousands of dollars in cash? Does the amount of money handled change the difficult of the work?)
Aside from the bigger point of the article, what a horrible analogy. Yes, of course handling more money makes your work more "difficult", where any reasonable definition of difficult has to incorporate the fact that bad people will do crazier things for more money than less.
A bigger bounty means the bad guys can employ more expensive ways to get the truck. If you use the armored truck that transports thousands of dollars to transport millions of dollars, you're asking to get robbed, because the truck only costs "thousands of dollars" to rob.
The argument that "no one really needs more than $X" is always a flawed one, in my opinion. I don't make $1 M a year, but if I did, I'm absolutely certain I'd prefer $2M a year. I can imagine all sorts of things I'd want -- vacation homes, fancy private schools for children, whatever. At $1 M a year I'd end up doing things that put me in contact with people who make more than me, and I'd think "oh, that's pretty cool, that stuff they have."
OK, OK, before you comment that "I don't need that," well, who said I did? I said I'd prefer it, therefore it would be an easy decision to switch jobs for it, all other things being equal.
So if you disagree, why is the amount _you_ make the defensible amount? Do you need it? Maybe 100k should be the max -- that's twice the median U.S. income, after all? Why do you need more than the median U.S. income, how greedy are you? Etc. etc.
Good economists don't talk about needs vs. wants, it's all wants because anyone can argue just about anything is a want and not a need. You need food, but if you ask for anything more than beans and rice, that food is now a want. Really? No, we aren't going to play that game. You want food. You want a place to live. You want transportation. It's all wants.
Bigger salaries attracts more people, so you can have your pick of your favorite candidate.
A bad scenario is the public school teacher path: they need better marketing and should be paid on par with the congressman, senators, and other highly paid politicians in government.
This article seems to put a lot of people into its "big salaries", from CEOs to fresh graduate.
I'd argue that, past the million dollars mark, it's hard to claim that n > 0 other people could do the same job for cheaper. Companies don't end up paying these amounts for employees they consider fungible. Their jobs are also more likely to be somewhat unique, somewhat shaped by themselves to a certain extent, such that the company marketing is unlikely to convince them anyway.
More generally and even for employees paid less than that, the compensation and especially its constant part (salary) is the one thing we can trust when we sign. The company and its culture might change, my manager with whom I've had a good relationship might leave, but it's still unlikely they'd decide to reduce my salary (maybe it'd be impossible to come back from when it comes to recruiting new hires, reputation-wise?). There are also many companies that are just not known enough, or have team-dependent cultures, such that when you start, you don't know how it's going to be. The compensation is also the one thing you take with you when you start a new job, as a baseline for negotiations. Good luck saying that your previous job had meals or massages on-site, so your new job should figure out a way to accommodate that for you.
I think that's a big part of this one-axis marketing, how concrete the compensation is in comparison with most other aspects of a job.
The danger with offering "marketing" instead of salaries is that it locks your company into valuing (and continuing to offer) the boon that got people to join it in the first place. Google (and HP before it) used to distinguish itself with "We take care of our employees, give you decent work-life balance and flexible working arrangements, and let you work on self-directed projects. We will probably not be the absolute highest compensation you can make, given your skill level." This worked great when it actually offered those. At the very first hint of layoffs, or RTO, or manager-directed product priorities, Googlers ask themselves "Wait - why am I working here again?" In pretty short order, the only ones left are those that actually are motivated by money, but couldn't get a better offer.
Similarly, Apple offers "the ability to work on products that users love", and tends to pay a bit less than similarly-skilled employees can get elsewhere. This works great, until users cease to love your products. Current Apple is lucky that they are still on top, but historical Apple absolutely went through this sort of brain-drain from 1993-1997, when they were not on top in product quality and so there was no real reason for skilled people to work there.
The big advantage of paying a lot is that you know that the type of person you get is motivated by money. If you want them to do something, pay them a lot for it, and make that pay contingent upon them actually doing it. It takes ulterior motives out of the equation and gives the corporation flexibility, because the only reason people work for it is the money.
FWIW, Google and HP back in their days did still pay among the highest if not the highest salaries. But you are right the ideals mattered a lot to the employees and it's really really hard for a company to maintain those high ideals for too long, but I think HP did it for around 40 or 50 years. Google for maybe 15? Different time periods though.
Wow, people used to nearly worship Seth Godin, it's pretty refreshing to see a whole lot of disdain for this article here :-)
I think there's something to his point about marketing. There probably is a way for companies to pay a little less but still attract the top talent by selling the job better. But then, why hasn't anyone figured this out and started doing it? Maybe financial workers, CEO's, laywers, and engineers see through it?
This part is just hilarious, "an industry-wide tax and trade salary cap will actually help these organizations." I mean, I guess maybe he really is feeling like this sort of regulation would be a charitable thing to do? It's actually a terrible idea though.
> it's pretty refreshing to see a whole lot of disdain for this article here :-)
This is Hacker News. World peace and Star Trek-style wealth and post-scarcity could be achieved and we'd still have an overwhelmingly negative Hacker News comment section nitpicking the way peace was achieved, or lamenting that life was better with poverty and the threat of war.
Beyond a few million a year, the rest of the comp is really providing something that's more difficult to purchase with money: power.
So, while there's a diminishing return on the benefits of additional money in a person's life, a certain subset of people have an insatiable desire for more power. It's problematic in what's supposed to be a democratic society with a fairly flat amount of power distributed among citizens. We essentially recreate a hereditary nobility, which reduces the fitness of our civilization as a whole since we no longer have the most qualified people making the decisions.
Money only equals political power to the extent that the political power itself is up for sale. Attempting to suppress the acquisition of money via political power will ultimately just create an alternate elite that denominates power via something other than money. The only solution is to reduce the reach of formal political power such that even if it is easier to manipulate it with money, it still can't be used to conduct abuses.
Fundamentally, no one is qualified to make decisions for anyone else in the first place, and the way we ensure the fitness of our civilization is to disaggregate and decentralize power.
I've worked jobs where I'm paid 60-80k and where I'm paid 100k plus.
I can tell you for sure I cared much less about the job where I wasn't getting paid as much. I would never answer an after work call or go out of my way to follow up organizational or systemic issues. For me working overtime is part of the package when I get paid loads more.
> For me working overtime is part of the package when I get paid loads more.
I've tended to think this way, but it's all relative. Plenty of people who've never had a $50k job will treat the $100k job as the baseline/minimum, and wouldn't ever think of going the extra mile like you do. For you (and me?) - yeah, you're paying "a lot", I'll make sure I do a bit extra/more when needed. But if you've never had less, that $100k is your bottom, and you might only consider doing 'extra' for a $200k job.
> claiming that they need to pay CEOs $50,000,000 salaries in order to recruit the very best ...
>After a million dollars or so in salary, the absolute amount that a person is paid has no real impact on their life...
At the high end it isn't really about employee lifestyle, it's about the value the person can bring to the business. If one CEO will take a $100k salary and keep the business about the same and the other wants $50m but will add £1bn in value to the business then the latter is a better deal for the owners.
And the person wanting the $50m may not be greedy but just being offered similar elsewhere because they are good. Of course in real life people often get the high salaries without actually being that good which is a less fair deal.
Yeah, a lot has changed since then and his post does not age well. The post-2008 era of trillion-dollar tech companies and winner-take-all markets, like social media and apps, necessitates superlative talent to get products out to market fast to capture invaluable market share. The difference between being early or late can mean missing out on literally hundreds of billions of dollars of valuation. It is not irrational at all for huge tech or finance companies to pay top dollar for talent when the returns are so great and things are so competitive, too. Paying $500k/year or more is immaterial when you're talking trillions of dollars.
Relevant, as this was written during the last global financial crisis, when everybody outside the financial industry was busy agreeing with each other that people in the industry (especially banking) were hugely overpaid.
What he's suggesting is that the massive public markets drive companies in ways that tiny groups of people who came together specifically to make a company plus perhaps their friends, families, and a few moneyed investors, simply don't. That you can't quite connect with that suggests you are not the target audience for this article.
Since it's a 2009 article and there is taxpayers in the text, I think he was upset because the great recession bayouts and even with all world crumbling at the moment, large bonuses to C-Level.
Now it's 2024 and I expect lower profits in the middle term to companies that pays anyone more than they give in return.
1. He keeps saying marketing but salary is actually a pretty good indicator for how good a job is.
2. You pay to retain not to hire. You can hire people at practically any price point. Whether they'll stick around for longer than 6 months is a different matter. I've seen multiple startup founders burnt by this.
This post raises a question I'm curious about: is executive pay higher or lower in private firms compared to ones that are public? Adjusting for confounding factors like size and sector.
This article is pretty shallow and sounds a lot like the people on Reddit calling for the removal of billionaires and how its the fault of the rich that they are struggling without acknowledging the amount of work it takes to become rich. The same people that minimize what people like Musk have accomplished.
If I get paid more, I work harder. There is obviously a realistic limit on how hard I can work. The longer I stay at a company though the more knowledge I have and the more effectively I can utilize my time to accomplish my goals and those of the business.
If I can get a 20% raise somewhere else and do the same amount of work, I will do so. In order to keep me, my company just has to match my new salary offer. Something that they are free to do or reject based on their valuation of what I bring to the table.
A million dollars is a lot of money, but its significantly less if I need to buy a house in California vs Wyoming. The free market does a relatively good job of assigning capital, lets not make up arbitrary caps based on make believe morality.
> The same people that minimize what people like Musk have accomplished.
Oof, I agree in general with what you're saying but Musk is a bad example. His companies have been successful in spite of him, rather than because of him.
> ... without acknowledging the amount of work it takes to become rich
Being rich has more to do with background, than work.
> The same people that minimize what people like Musk have accomplished.
The son of a property developer and part owner of an emerald mine, and a top model, no less.
What I'm trying to say is that getting a jumpstart, while not guaranteeing a path to success, does provide a massive advantage over those from poorer backgrounds.
Hahahaha, this is capital complaining about the increasing cost of labor because of supply constraints straight out, which has been increasing world wide recently because of super-ZIRP and COVID killing off a margin of the workforce. Will he suggest a cap and trade wealth tax over the estate tax limit while people are alive next? No.
The capitalist here is berating other capitalists for not having enough marketing savvy to get labor at cheaper prices. Seth is a capitalist, he treats his work as a business to build vs. a salary to earn. On top of this, Seth's business is consulting to other businesses about marketing, using the marketing techniques of saying something a bit wrong and agreeing with the common man about some stereotypes to enhance it's virality.
It comes to pure supply and demand, and they wouldn't do it if they weren't making more money off of it. It's never about what you "deserve". Anybody on a salary without significant equity ownership is labor, but it's expensive labor in this case. Because if the business could get equivalent quality labor at cheaper prices, they would!
He also knows that "Goldman Sachs" is about class, because they make their money via front office sales, and someone lower class is not going to make a good salesman. Anybody who can do spreadsheets, basic algebra and have a cocaine driven work ethic can do banker jobs, it's not a talent issue beyond insane work ethic and social skills.
autonomy is a big one for some people. respect. influence/power. As a software engineer I have left jobs because the total traffic was too low, and I was addicted to 10^9 and the like numbers in my counters. Additional salary is ok, but it functionally just means I waste more or less money before having to rein it in. If I saw really rich people doing more awesome stuff with their moneys, I might think otherwise, but having a Lambo or a house so large my kids would be less able to relate to people in general doesn't seem that useful. Get used to luxry clothes instead of my somewhat scruffy true style
A big one as a developer is internal investment. Who works on internal tooling and infrastructure? How robust is the CI/CD pipeline? How much of an event is it when a deploy happens?
Equity? If you have the choice of a million dollars in salary and 100,000 shares or 1.1 million in salary and 50,000 shares, probably you should take the lower salary
This is a garbage opinion piece demonstrating the archetypical boomer mentality of caring about your pay being passe. Trying to market an “innovative” workplace to save money on employee pay is just a cheap trick. Yawn
- Salary is absolutely the key factor when people pick jobs. The difference between a fun hobby and a great job is that you get paid a lot to do the latter.
- Here he's saying that companies should create a buzz around jobs; but having good feelings about your low-paid job doesn't help you nearly as much as just having lots of extra new wealth.
- Saying that because high-end employees are far beyond the "buying food" stage of Maslow's Hierarchy means more money is unnecessary is just brain-dead. Economic growth anyone? More money = good.
- High pay is a great way for companies like Google to prevent competition. Why risk starting a business when you can earn a million bucks every couple of years working for them?
- High CEO pay is absolutely not a problem. If a top CEO increases a company's market cap by billions, and is only paid tens of millions, then what a waste of time and emotional energy it is to fixate on the tens of millions.
I can't believe this character is actually advocating for lower salaries.
> Salary is absolutely the key factor when people pick jobs.
For people with poor reasoning - yes. Most people think of ROI, especially after COVID. A finish carpenter runs at $150 per hour, but your career is limited by your physical abilities.
Going to a company like Bridgewater, where 50 hr workweeks onsite are expected, at $250k may be less valuable than going to Microsoft at $180k.
> I can't believe this character is actually advocating for lower salaries.
Did you spend any time understanding the article? The whole article is all about how certain companies only use salaries are something to draw and keep people in.
>Salary is absolutely the key factor when people pick jobs.
Eh. It's a key factor. Once you get beyond a certain point, many people take lots of factors into account for jobs that are not otherwise basically interchangeable.
After aging I'm starting to have new views on large salaries:
1. The money is just going to be saved. Net gain to the person is they're probably going to live for the rest of their life off dividends. Net gain to society, is any money taken out of circulation fights inflation.
2. If you pay someone a lot of money they will, essentially, spend it on other people. Either through salary or just buying shit. The richest people will make other people wealthy, and those people will make other people money too. Net again sounds like it's a benefit to not just the original person.
3. I've had lots of people say it's not a zero sum game. This is turning out to be true. Someone having success inventing and selling a new ketchup dispensing lid (and making billions) does not prevent someone from starting a successful company that makes Gyroscope toys that stands on its corner that can hold a tomato.
Your point 2 is suspiciously close to the trickle down economy hypothesis which doesn’t work - I mean yes they spend that money but they spend both absolutely and relatively much more on point 1.
Also, I have serious doubts that buying assets fights inflation. It’s only true if the money ends up locked in some central bank account, otherwise someone else gets it and can spend it on goods or services instead of different financial assets.
So you're arguing you can allocate capital inefficiently and it's not a problem. I disagree. Capital should be allocated fairly so those who are doing the work stay motivated and those who are not doing anything aren't disproportionately rewarded.
Do you manage your own money this way? Do spend 10 grands on a running shoe because, well, it will eventually make the whole society wealthier and improve standards of living for everyone including you?
Trickle-down economics. It sounds like a good idea, but in practice, the system is much less about dollars and cents and more about intangible deals and than goods and services. So the vast majority of wealth in the system never actually is seen by the less wealthy. It just endlessly circulates amongst the very wealthy.
This is "trickle down economics" you're repeating. That theory has failed to provide any empirical evidence.
1. Inflation is good, deflation is bad and out of order high inflation is bad. Unless you literally store cash, you're not taking money out of the system. It's either invested or lended. Your point #1 is completely false.
2. Rich people don't create the middle class, and create only a very small set of people wealthier... if any at all.
There are diminishing returns for society of having exceptionally rich people.
As an example: mathematically having a few people in a town earn more than 100x the rest will not boost the economy as much, as having a distributed rise in compensation.
In our current world what you pay for services and products is not at all dependent on your income. Which means that an average American software engineer earning 150k will still pay $1k for an iPhone, $200 for gardening services and so on. That is the same price anyone else is paying... This leads to diminishing wealth redistribution, as the denominator is how often a service or product is purchased.
Our household income is within the range of 500k, we consume the same products and services as our teacher neighbors at less than half that income.(they probably consume more, given that they have 3 kids)
If our household income goes to $1mil - we will not need to call the gardener more often, we will not eat more, we'll not need more haircuts, we will increase our expenses but not double them.
If our household income goes from $1mil to $10mil, there will be even lower increase in spending that would distribute the income...
Now if every house in our neighborhood got a $100k annual raise, the demand for services and products would go up 100 fold.
3. It's not a zero sum-game. It's a case of diminishing returns. It's interesting that you present a mass market product as an example, where wealth is produced by mass market, instead of an example of rich people making other people wealthy.
I’d say there are many examples of higher salaries being zero sum or negative sum.
I’ve noticed from people I’ve visited in the US with large salaries that there’s many who buy homes with swimming pools they don’t necessarily use much. It’s kind of something you just have to have, especially if you plan to sell the home one day.
The European model might involve smaller homes, higher taxes, and thus lower salary. But the taxes will often go to public infrastructure, and since housing is denser, that infrastructure is potentially in walking/biking distance. So you get public pools with more amenities (even a big slide if you’re lucky) for less money.
I was struck by a side comment in Linus from Linus Tech Tips that he felt his family needed to spend some of the summer at home to justify the huge investment in the swimming pool in their new home. Seems kinda crazy to me.
The mega yachts that seem popular with the ultra wealthy also seem to me like such a huge waste. So many people employed building those big money sinks who could have been building infrastructure.
In the case where the gains on capital or large salaries is used as new capital for new ventures, I agree it’s not zero sum. But if that’s what we want more of, there can be ways to encourage that money is managed that way more often. Doesn’t feel like there’s enough effort on those kinds of policies.
I mostly agree with point 1 in the sense that the rich and powerful's money doesn't directly contribute to inflation of basic goods, i.e. Bill Gates can only eat so much rice personally so he's probably not affecting global rice prices.
However, per point 2, the issue is paying people to do useless things. If Bill Gates buys a superyacht staffed by 30 people just paid to operate the yacht, well that's a whole lot of man-hours and natural resources (fuel, raw material) being pumped into a useless object that could otherwise be spent improving the world. And yes, downstream from that (people paid to grow the food that feeds the yacht workers) are now doing mostly useless work.
>If you pay someone a lot of money they will, essentially, spend it on other people.
This touches on the concept of trickle down economics and it is generally regarded as not doing what you think it does (or at least, not very effectively).
Trickle down economics don't seem to work and while the broader economy isn't a zero sum game an individual company's decision to pay executives more money is a decision not to spend that money elsewhere.
I think it makes more sense to look at it through the lens of labor distribution. Money is abstract and cyclical and can be inflated and deflated by policy, which makes it complicated to draw conclusions about. But money is ultimately used to influence the distribution of labor, which we as a species have a finite capacity for, and which has concrete impacts.
As a person becomes wealthier, each marginal dollar is less likely to be used to support critical infrastructure like food distribution and more likely to support the construction of mega-yachts. And because the labor pool is finite and subject to competition, increasing the leverage of the mega-yacht industry can have a negative effect on other sectors' abilities to meet people's basic needs. This is why I hold income inequality to _generally_ be a negative thing under capitalism: not because of any moral judgment on rich people, but because a certain level of competitiveness among individuals in the labor market is a requirement for survival.
edit: whoops, everyone else already made this point while I was typing. Sorry for the pile-on.
The neat part about it is that if my friend's buddy, Bubba (Yeah. He's an electrician.) goes to see a congressman, governor, or the president and says he wants something done, he'll get a big shit-eating grin and a "Sure, buddy, we'll work on that!" with a hearty handshake.
If I go to them, I'll get offered a cup of coffee and possibly a few minutes to make my case.
If the guy making $50,000,000 per year does it, then, well, his wish is your command.
toast0|2 years ago
Sure, nobody needs more than a million dollars in annual compensation (in 2024 dollars), but relative amount gets you to your never need to work again number faster or slower. You might still work after you don't need to, but it's nice to not need to. And of course, there's economic milestones to be had like flying first class, flying charted, leasing a jet, owning a jet. Those certainly have an impact on your life, depending on how much you travel; and you might travel more if you didn't have to wait at the airport for a flight.
lumost|2 years ago
Consider the case of someone wishing to live a luxury lifestyle in the trendy lower east side neighborhood of manhattan. We'll use a 1300 sqft 3 bedroom condo as a baseline.
https://www.redfin.com/NY/New-York/455-FDR-Dr-10002/unit-B30...
This condo will cost 8k/month with a 20% downpayment at todays interest rates, leaving our hypothetical million dollar a year salary person with 52k/month post-tax. Assuming they live a rather luxurious lifestyle of ~16k per month, they will still have a savings rate of 60%. Leading to a retirement in 12 years with a portfolio of 7.8 MM.
If the person makes 10x this value or 10MM per year... Then they can retire in 1 year. At 100 MM, they can retire in ~2 months.
You can play with the numbers a bit, our hypothetical 1MM/year individual would be living in the "average" 3-bedroom apartment for the Lower East Side. Perhaps the 10MM/year individual would choose the most expensive unit which is only ~4x more expensive, and increase their spending to 90000 per month - equivalent to a new model X per month.
They still retire in 3.8 years.
https://www.redfin.com/NY/New-York/105-Norfolk-St-10002/unit...
d--b|2 years ago
They already have the house(s) they wanted, the cars they dreamt of, and the kids in the expensive schools. Plus being in finance, these people make more money with the money they already have.
Of course, there's always the dumbass who just bought his 20th ferrari, but that's just something else entirely.
lukas099|2 years ago
karolist|2 years ago
inejge|2 years ago
Perhaps counterintuitively, going from first class to charter/leased flights is a safety downgrade. Search for accident statistics on the NTSB site and you'll see that Part 135 flights (smaller aircraft, including business jets) have 3-4x the accident rates compared to Part 121 (large air carriers), arguably because Part 121 regulations are much more stringent. Here[1] is a very recent leased jet fatal accident, for example.
[1] https://www.usatoday.com/story/news/nation/2024/02/09/plane-...
unknown|2 years ago
[deleted]
crazygringo|2 years ago
If that's $600K after taxes, and a year of college for a single child costs $80K at an excellent school, and you've got two or three kids, and housing in a major metropolitan area...
I mean you're definitely living very comfortably, but there are still lots of ways to spend money that have a big impact on your life, between your home and child care and your vacations and your comfort in traveling.
If the number is $25 million, then sure there isn't much more difference. Probably even $5 million. But $1 million still has plenty of room for very meaningful life improvement, that isn't anywhere near private jets. Not that you need, but that it's entirely normal to want.
danbruc|2 years ago
TrackerFF|2 years ago
Some of the fund managers there make more than the managing director, but still, we're talking about a "modest" figure in the $1mm-$2mm range. That's paltry pay compared to the big bucks made in hedge funds and private equity.
The pension fund could have paid out hundreds of millions to their fund managers, and it would only have been a rounding error in the grand scheme of things...but still they manage to attract top talent.
There's this culture on Wall Street (or Connecticut, or London...) that they are the only ones that can bring big returns, because they're the right combination of correct pedigree, professional experience, network, talent, etc.
In the end, it's just good salesmanship. Tons of funds deliver mediocre returns, while making bank.
lkdfjlkdfjlg|2 years ago
Yes of course, not everything is about money. There's also 1) prestige and 2) the promise of future money. The Norwegian Pension Fund specifically is very prestigious, and it promises that anyone who can do a good job with $1.5tr probably can also do a good job at one of those 100bn fund that do pay 10m/yr.
krupan|2 years ago
Also, that's a very different job than working at a hedge fund. Hedge funds have to attract investors. How do they do that? By saying, "look at the expensive managers we have!" A government pension fund doesn't have to do that.
ZoomerCretin|2 years ago
In the age of index funds outperforming hedge funds, the real question is how long they can keep up the grift.
sequoia|2 years ago
I don't know the author but this is so bizarre it makes me question their analysis overall.
8f2ab37a-ed6c|2 years ago
lowercased|2 years ago
The reference was to new law grads 20 years ago getting $120k jobs. That indeed was a high starting point for most recent grads from most fields 20 years ago.
krupan|2 years ago
throwaway240412|2 years ago
Take the now-defunct "American dream" of a single-income family with 3 kids living in a house with a backyard, say, in Silicon Valley and other places that have mobs paying more than $1 million to people, and that goes away pretty quickly.
After tax, with standard deduction, and 5 allowances, that $1 million turns into $529k net. With a $7k rent plus $5k in personal expenses per person (pre-school tuition alone is about $3k, so $5k in personal expenses is not outrageous), that leaves at most $145k in savings.
With a $12k mortgage (the median price in Santa Clara county for all residential is $1.4 million, I'm using $1.8 for a house), that's down to $85k in savings if you live frugally.
But, as other people say, there's more to life than food and shoes.
unbalancedevh|2 years ago
Saving $85k per year, which is way more than the median income in the US, is fantastic for a family of 5, while simultaneously building equity in one of the most expensive markets.
And $5k in personal expenses per person per month is hardly living frugally, especially for a 1-income household where presumably child care (and pre-school) isn't necessary. I don't live in an HCOL area, but non-discretionary expenses for just me, besides rent/mortgage, are about $1200/month. Food and clothing aren't 4x as expensive in SV are they?
achatham|2 years ago
Aqueous|2 years ago
srackey|2 years ago
Salaries for public companies locked at 10M/yr? Ok, now firms have to compete on amenities. (Your current firm gives you a free car? Ours gives a jet, a personal Michelin star cook, and complimentary beverages)
mfuzzey|2 years ago
Not sure what the figure should be (x10?, x20?, x50?, x100?). That way companies that want to pay higher saleries to their CEO would have to increase everyone's salary.
But there would need to be a way of stopping companies just using shells and subcontracting all the real work to low pay subsidiaries.
JumpCrisscross|2 years ago
There is more to life than food and shoes? This is one of the dumbest things I’ve read.
jeltz|2 years ago
baq|2 years ago
shermantanktop|2 years ago
If money isn't the bottleneck anymore, something else becomes the bottleneck - time, space, energy, interest/passion, etc.
latexr|2 years ago
Possibly, yes. The amount of money handled might affect the likelihood of a heist, and the required preparedness of the robbers. Which in turn requires more skilled drivers facing a higher risk.
https://www.youtube.com/watch?v=lsu6AhYzG_4
That aside was an unnecessary bad tangent which undermines the point.
kevinmchugh|2 years ago
mcguire|2 years ago
A convenience store or liquor store is much more likely to be robbed than a bank.
leesec|2 years ago
n4r9|2 years ago
lkdfjlkdfjlg|2 years ago
Aside from the bigger point of the article, what a horrible analogy. Yes, of course handling more money makes your work more "difficult", where any reasonable definition of difficult has to incorporate the fact that bad people will do crazier things for more money than less.
stavros|2 years ago
stvswn|2 years ago
OK, OK, before you comment that "I don't need that," well, who said I did? I said I'd prefer it, therefore it would be an easy decision to switch jobs for it, all other things being equal.
So if you disagree, why is the amount _you_ make the defensible amount? Do you need it? Maybe 100k should be the max -- that's twice the median U.S. income, after all? Why do you need more than the median U.S. income, how greedy are you? Etc. etc.
krupan|2 years ago
j7ake|2 years ago
A bad scenario is the public school teacher path: they need better marketing and should be paid on par with the congressman, senators, and other highly paid politicians in government.
ipaddr|2 years ago
hiq|2 years ago
I'd argue that, past the million dollars mark, it's hard to claim that n > 0 other people could do the same job for cheaper. Companies don't end up paying these amounts for employees they consider fungible. Their jobs are also more likely to be somewhat unique, somewhat shaped by themselves to a certain extent, such that the company marketing is unlikely to convince them anyway.
More generally and even for employees paid less than that, the compensation and especially its constant part (salary) is the one thing we can trust when we sign. The company and its culture might change, my manager with whom I've had a good relationship might leave, but it's still unlikely they'd decide to reduce my salary (maybe it'd be impossible to come back from when it comes to recruiting new hires, reputation-wise?). There are also many companies that are just not known enough, or have team-dependent cultures, such that when you start, you don't know how it's going to be. The compensation is also the one thing you take with you when you start a new job, as a baseline for negotiations. Good luck saying that your previous job had meals or massages on-site, so your new job should figure out a way to accommodate that for you.
I think that's a big part of this one-axis marketing, how concrete the compensation is in comparison with most other aspects of a job.
nostrademons|2 years ago
The danger with offering "marketing" instead of salaries is that it locks your company into valuing (and continuing to offer) the boon that got people to join it in the first place. Google (and HP before it) used to distinguish itself with "We take care of our employees, give you decent work-life balance and flexible working arrangements, and let you work on self-directed projects. We will probably not be the absolute highest compensation you can make, given your skill level." This worked great when it actually offered those. At the very first hint of layoffs, or RTO, or manager-directed product priorities, Googlers ask themselves "Wait - why am I working here again?" In pretty short order, the only ones left are those that actually are motivated by money, but couldn't get a better offer.
Similarly, Apple offers "the ability to work on products that users love", and tends to pay a bit less than similarly-skilled employees can get elsewhere. This works great, until users cease to love your products. Current Apple is lucky that they are still on top, but historical Apple absolutely went through this sort of brain-drain from 1993-1997, when they were not on top in product quality and so there was no real reason for skilled people to work there.
The big advantage of paying a lot is that you know that the type of person you get is motivated by money. If you want them to do something, pay them a lot for it, and make that pay contingent upon them actually doing it. It takes ulterior motives out of the equation and gives the corporation flexibility, because the only reason people work for it is the money.
krupan|2 years ago
krupan|2 years ago
I think there's something to his point about marketing. There probably is a way for companies to pay a little less but still attract the top talent by selling the job better. But then, why hasn't anyone figured this out and started doing it? Maybe financial workers, CEO's, laywers, and engineers see through it?
This part is just hilarious, "an industry-wide tax and trade salary cap will actually help these organizations." I mean, I guess maybe he really is feeling like this sort of regulation would be a charitable thing to do? It's actually a terrible idea though.
ZoomerCretin|2 years ago
This is Hacker News. World peace and Star Trek-style wealth and post-scarcity could be achieved and we'd still have an overwhelmingly negative Hacker News comment section nitpicking the way peace was achieved, or lamenting that life was better with poverty and the threat of war.
mullingitover|2 years ago
So, while there's a diminishing return on the benefits of additional money in a person's life, a certain subset of people have an insatiable desire for more power. It's problematic in what's supposed to be a democratic society with a fairly flat amount of power distributed among citizens. We essentially recreate a hereditary nobility, which reduces the fitness of our civilization as a whole since we no longer have the most qualified people making the decisions.
Gormo|2 years ago
Fundamentally, no one is qualified to make decisions for anyone else in the first place, and the way we ensure the fitness of our civilization is to disaggregate and decentralize power.
humbleharbinger|2 years ago
I can tell you for sure I cared much less about the job where I wasn't getting paid as much. I would never answer an after work call or go out of my way to follow up organizational or systemic issues. For me working overtime is part of the package when I get paid loads more.
jacobyoder|2 years ago
I've tended to think this way, but it's all relative. Plenty of people who've never had a $50k job will treat the $100k job as the baseline/minimum, and wouldn't ever think of going the extra mile like you do. For you (and me?) - yeah, you're paying "a lot", I'll make sure I do a bit extra/more when needed. But if you've never had less, that $100k is your bottom, and you might only consider doing 'extra' for a $200k job.
tim333|2 years ago
>After a million dollars or so in salary, the absolute amount that a person is paid has no real impact on their life...
At the high end it isn't really about employee lifestyle, it's about the value the person can bring to the business. If one CEO will take a $100k salary and keep the business about the same and the other wants $50m but will add £1bn in value to the business then the latter is a better deal for the owners.
And the person wanting the $50m may not be greedy but just being offered similar elsewhere because they are good. Of course in real life people often get the high salaries without actually being that good which is a less fair deal.
metaphor|2 years ago
paulpauper|2 years ago
em500|2 years ago
jbs789|2 years ago
Private companies are owned by shareholders.
That’s just one of the internal inconsistencies. Bit curious. Leads me to question the whole argument.
asadotzler|2 years ago
fizx|2 years ago
The level of competition between companies--the level of talent needed to win--is what drives the salaries.
azlev|2 years ago
Now it's 2024 and I expect lower profits in the middle term to companies that pays anyone more than they give in return.
roncesvalles|2 years ago
2. You pay to retain not to hire. You can hire people at practically any price point. Whether they'll stick around for longer than 6 months is a different matter. I've seen multiple startup founders burnt by this.
readthenotes1|2 years ago
The NFL is on my mind, as of course is soccer since there was a actual football player in one of the commercials during the recent game
andrewjl|2 years ago
wonderwonder|2 years ago
If I get paid more, I work harder. There is obviously a realistic limit on how hard I can work. The longer I stay at a company though the more knowledge I have and the more effectively I can utilize my time to accomplish my goals and those of the business.
If I can get a 20% raise somewhere else and do the same amount of work, I will do so. In order to keep me, my company just has to match my new salary offer. Something that they are free to do or reject based on their valuation of what I bring to the table.
A million dollars is a lot of money, but its significantly less if I need to buy a house in California vs Wyoming. The free market does a relatively good job of assigning capital, lets not make up arbitrary caps based on make believe morality.
bobsomers|2 years ago
Oof, I agree in general with what you're saying but Musk is a bad example. His companies have been successful in spite of him, rather than because of him.
manuelabeledo|2 years ago
Being rich has more to do with background, than work.
> The same people that minimize what people like Musk have accomplished.
The son of a property developer and part owner of an emerald mine, and a top model, no less.
What I'm trying to say is that getting a jumpstart, while not guaranteeing a path to success, does provide a massive advantage over those from poorer backgrounds.
Biologist123|2 years ago
pyb|2 years ago
novok|2 years ago
The capitalist here is berating other capitalists for not having enough marketing savvy to get labor at cheaper prices. Seth is a capitalist, he treats his work as a business to build vs. a salary to earn. On top of this, Seth's business is consulting to other businesses about marketing, using the marketing techniques of saying something a bit wrong and agreeing with the common man about some stereotypes to enhance it's virality.
It comes to pure supply and demand, and they wouldn't do it if they weren't making more money off of it. It's never about what you "deserve". Anybody on a salary without significant equity ownership is labor, but it's expensive labor in this case. Because if the business could get equivalent quality labor at cheaper prices, they would!
He also knows that "Goldman Sachs" is about class, because they make their money via front office sales, and someone lower class is not going to make a good salesman. Anybody who can do spreadsheets, basic algebra and have a cocaine driven work ethic can do banker jobs, it's not a talent issue beyond insane work ethic and social skills.
CurtMonash|2 years ago
Traubenfuchs|2 years ago
Anyone pretending there are other answers is probably guilty of lowballing, wanting to lowball or the English translation of my name: a grape fox.
AceJohnny2|2 years ago
Non-profits are particularly good at that last point.
jeltz|2 years ago
lanstin|2 years ago
1-more|2 years ago
kevinmchugh|2 years ago
ghaff|2 years ago
quickthrower2|2 years ago
tester457|2 years ago
opportune|2 years ago
Also, this should have a [2009] tag
ChrisArchitect|2 years ago
FredPret|2 years ago
- Salary is absolutely the key factor when people pick jobs. The difference between a fun hobby and a great job is that you get paid a lot to do the latter.
- Here he's saying that companies should create a buzz around jobs; but having good feelings about your low-paid job doesn't help you nearly as much as just having lots of extra new wealth.
- Saying that because high-end employees are far beyond the "buying food" stage of Maslow's Hierarchy means more money is unnecessary is just brain-dead. Economic growth anyone? More money = good.
- High pay is a great way for companies like Google to prevent competition. Why risk starting a business when you can earn a million bucks every couple of years working for them?
- High CEO pay is absolutely not a problem. If a top CEO increases a company's market cap by billions, and is only paid tens of millions, then what a waste of time and emotional energy it is to fixate on the tens of millions.
I can't believe this character is actually advocating for lower salaries.
JAlexoid|2 years ago
For people with poor reasoning - yes. Most people think of ROI, especially after COVID. A finish carpenter runs at $150 per hour, but your career is limited by your physical abilities.
Going to a company like Bridgewater, where 50 hr workweeks onsite are expected, at $250k may be less valuable than going to Microsoft at $180k.
> I can't believe this character is actually advocating for lower salaries.
Did you spend any time understanding the article? The whole article is all about how certain companies only use salaries are something to draw and keep people in.
ghaff|2 years ago
Eh. It's a key factor. Once you get beyond a certain point, many people take lots of factors into account for jobs that are not otherwise basically interchangeable.
throwitaway222|2 years ago
1. The money is just going to be saved. Net gain to the person is they're probably going to live for the rest of their life off dividends. Net gain to society, is any money taken out of circulation fights inflation.
2. If you pay someone a lot of money they will, essentially, spend it on other people. Either through salary or just buying shit. The richest people will make other people wealthy, and those people will make other people money too. Net again sounds like it's a benefit to not just the original person.
3. I've had lots of people say it's not a zero sum game. This is turning out to be true. Someone having success inventing and selling a new ketchup dispensing lid (and making billions) does not prevent someone from starting a successful company that makes Gyroscope toys that stands on its corner that can hold a tomato.
baq|2 years ago
Also, I have serious doubts that buying assets fights inflation. It’s only true if the money ends up locked in some central bank account, otherwise someone else gets it and can spend it on goods or services instead of different financial assets.
gerash|2 years ago
Do you manage your own money this way? Do spend 10 grands on a running shoe because, well, it will eventually make the whole society wealthier and improve standards of living for everyone including you?
remoquete|2 years ago
devops_palmer|2 years ago
JAlexoid|2 years ago
1. Inflation is good, deflation is bad and out of order high inflation is bad. Unless you literally store cash, you're not taking money out of the system. It's either invested or lended. Your point #1 is completely false.
2. Rich people don't create the middle class, and create only a very small set of people wealthier... if any at all.
There are diminishing returns for society of having exceptionally rich people.
As an example: mathematically having a few people in a town earn more than 100x the rest will not boost the economy as much, as having a distributed rise in compensation.
In our current world what you pay for services and products is not at all dependent on your income. Which means that an average American software engineer earning 150k will still pay $1k for an iPhone, $200 for gardening services and so on. That is the same price anyone else is paying... This leads to diminishing wealth redistribution, as the denominator is how often a service or product is purchased.
Our household income is within the range of 500k, we consume the same products and services as our teacher neighbors at less than half that income.(they probably consume more, given that they have 3 kids)
If our household income goes to $1mil - we will not need to call the gardener more often, we will not eat more, we'll not need more haircuts, we will increase our expenses but not double them.
If our household income goes from $1mil to $10mil, there will be even lower increase in spending that would distribute the income...
Now if every house in our neighborhood got a $100k annual raise, the demand for services and products would go up 100 fold.
3. It's not a zero sum-game. It's a case of diminishing returns. It's interesting that you present a mass market product as an example, where wealth is produced by mass market, instead of an example of rich people making other people wealthy.
audunw|2 years ago
I’ve noticed from people I’ve visited in the US with large salaries that there’s many who buy homes with swimming pools they don’t necessarily use much. It’s kind of something you just have to have, especially if you plan to sell the home one day.
The European model might involve smaller homes, higher taxes, and thus lower salary. But the taxes will often go to public infrastructure, and since housing is denser, that infrastructure is potentially in walking/biking distance. So you get public pools with more amenities (even a big slide if you’re lucky) for less money.
I was struck by a side comment in Linus from Linus Tech Tips that he felt his family needed to spend some of the summer at home to justify the huge investment in the swimming pool in their new home. Seems kinda crazy to me.
The mega yachts that seem popular with the ultra wealthy also seem to me like such a huge waste. So many people employed building those big money sinks who could have been building infrastructure.
In the case where the gains on capital or large salaries is used as new capital for new ventures, I agree it’s not zero sum. But if that’s what we want more of, there can be ways to encourage that money is managed that way more often. Doesn’t feel like there’s enough effort on those kinds of policies.
pants2|2 years ago
However, per point 2, the issue is paying people to do useless things. If Bill Gates buys a superyacht staffed by 30 people just paid to operate the yacht, well that's a whole lot of man-hours and natural resources (fuel, raw material) being pumped into a useless object that could otherwise be spent improving the world. And yes, downstream from that (people paid to grow the food that feeds the yacht workers) are now doing mostly useless work.
gaoshan|2 years ago
This touches on the concept of trickle down economics and it is generally regarded as not doing what you think it does (or at least, not very effectively).
sapphicsnail|2 years ago
jncfhnb|2 years ago
ezrast|2 years ago
As a person becomes wealthier, each marginal dollar is less likely to be used to support critical infrastructure like food distribution and more likely to support the construction of mega-yachts. And because the labor pool is finite and subject to competition, increasing the leverage of the mega-yacht industry can have a negative effect on other sectors' abilities to meet people's basic needs. This is why I hold income inequality to _generally_ be a negative thing under capitalism: not because of any moral judgment on rich people, but because a certain level of competitiveness among individuals in the labor market is a requirement for survival.
edit: whoops, everyone else already made this point while I was typing. Sorry for the pile-on.
mcguire|2 years ago
If I go to them, I'll get offered a cup of coffee and possibly a few minutes to make my case.
If the guy making $50,000,000 per year does it, then, well, his wish is your command.
Money is power.