Derek McGowan

I always liked the line-

" The problem isn't capitalism, the problem is the capitalists"

Excellent Derek...

Regina has a good voice and Norah's voice and piano is exquisite - you have good taste in music.

A...

Norah is one of the very few whose albums I buy as soon as they release sight unseen. She is also the only person who I would care to pay 100+ for a concert ticket

Regina Spektor- Ballad of a Politician

Norah Jones- My dear country

Thanks guys

43 pages since july??! Is this the most popular thread ever?

Until computers can reproduce on their own they can be as "sentient" as they want. Until then we have the luxury of worrying about people, not computer sentience--just like the "sentient" computer. ("Please--don't pull that plug!")

--Brant

I used to worry about the SkyNet problem, but then I thought it through logically and I agree with you. If there is anything to fear it is the people behind the machines, not the machines themselves--even sentient machines.

I know what you are about to say. Evaluation changes with depth of search.

this is what I was going to say. It would seem that humans are/were better evaluators then computers who had speed and depth on their side, but that speed and depth gives a good proxy for evaluation. In fact it was/is good enough to win

So both programs will run on the same computer? Sorry I'm new to this. Alsohelp me to understand the difference between "evaluator" vs "calculator"

"...that we have created thus far..."

(heh - still a Utopian idealist I notice, D.).

I dont belive in utopias

Also I don't presume to tell others what they should place value in

I think that's untrue. First and foremost, a salary should be the ~result~ of freedom of independent choice, a negotiation between two individuals - a trade of values. Secondarily, the free market (as free as it is now) places a mean money value on any given skill. As a hirer I might offer well above the average - or well below, depending on : what I can afford to pay; how badly I want a prospective employee; specific, hard conditions and hours I'll need him for; etc..

And in some situations an applicant might offer to work for next to nothing, if he sees other value in it. What did you say about "wants, needs..." etc? I couldn't agree more.

This is the true and real application of all that, not job-market "norms".

You are viewing the free market as some kind of unreal abstraction--I think. Reality and real individuals come first.

hmm... interesting.... Call me crazy but you sound to me like you've changed your tune 170 degrees (not 100 percent) in the last two posts. It could very well be that I havent been clear so you've misunderstood me or maybe I misunderstood you but it sounds suspiciously that you are now using mostly same reasoning that I've been stating over and again from the beginning of this post. Example

As a hirer I might offer well above the average - or well below, depending on : what I can afford to pay; how badly I want a prospective employee; specific, hard conditions and hours I'll need him for; etc..

It is a voluntary decision. Earlier you would have implied that for the hirer offer anything above average (my word "norm" your word "mean") he would have to be socialist or be putting the company at risk.

But again maybe I misunderstood. So I'll ask anyone else still reading this thread- does WhyNot's post above sound different than his previous ones?

You do think capitalism to be moral? Why?

Capitalism is the most moral (not my ideal) system that we have created thus far because it allows for the most freedom of the myriad of different minds to express themselves.

. Instead they should be clearly and selfishly stating their goal of profits alone.

Myriad of minds....

not everyone is out for profits alone

Does the over all payroll stay the same? Yes?No?

If yes, it means less increases for previously existing staff.

If no, it means less profit.

Which is it?

There's no free lunch.

what? What does this have to do with anything? Of course there is no free lunch. Who said there was. Your statement above is the same thing from my statement. Its called running a business.

If one gets stuck in how things ARE run now, .....

Have to agree with you here but I get the distinct feeling that you are throwing this in as a stretch, as a desparate attempt to be correct. Why don't you just admit that your opening posts were too broad and moralizing especially when those posts were based on your assumption that Dan Price's decision was to average out salaries.

Now you are trying to say that anything that falls outside of your ideal is wrong? I thought we wanted a free market. A free market has people of different wants, needs, desires and abilities making many different decisions. Not following your book of life

Base salaries are the RESULT of the free market. Outside of minium wage none of the other bases are enforced by anything other than the market. Businsses say what they will pay, workers either accept it or not. The amount that is accepted becomes precendent and the norm. That number is constantly negotiated down the line which causes the base/norm to rise or fall.... like magic

....evil magic

And who pays for the increased base income for untested new employees? Somebody always pays. If it comes out of profits....

Who pays?! Of course it comes out of profits. WTF?!! Thats the way businesses operate WhyNot. Businesses hire people and they pay salaries, not out of some magically pot of gold but out of the money they make. Surely you must be joking cause if not, your business crediblity is quickly heading for laugh out loud land.

If the business cannot pay for salaries/ raises/ inventory/ lights then that is one thing (and it happens to poorly run businesses all the time) but to say that base pay come at the expense of someone else's raise ..... Guess what, according to your logic, anyone's raise comes at the expense of someone else's. The CEO's pay comes at the expense of the employees, the executive staff's pay comes at the expense of the CEO's pay. The stock buy backs come at the expense of shipping costs. The cost of licensing of a famous name comes at the expense of the art department. Rent at one location comes at the expense of expanding the business.

Thats called the cost of business

But again, are you really trying to say that the concept of base pay is socialistic and immoral? Have you ever hired anyone? Did you start them off at voluntary status until they proved themselves? Did you start off as a volunteer until you proved yourself on your job or when you went in was there the expectation of a minimum salary though the businesses didn't know you from Adam? Why do you think you deserved a base salary when you started? And if you are really trying to say that base pay is fine unless it reaches 70,000 the next question is why do you think that that particular number is too high? What do you think of Goldman Sachs decision last year to raise the base pay of their first year analysts from 70,000 to 85,000?

http://www.wsj.com/articles/wall-street-banks-lift-pay-for-junior-bankers-1408577017

Evil is everywhere.....

And the people I serve are not just faceless nameless customers you take advantage of and throw away. They're my friends and my neighbors in our small community.

I agree with your ability to choose what to do with your money and I would argue against anyone who decided your above statement was immoral, evil or corrupting

From my perspective all that is nonsense. Unless you have actual numbers than all you have is speculation. Don't get me wrong, I'm not against prediction or even betting on an outcome, where I have a problem is when moral considerations are attached to it. You can say that I predict this company or decision will fail but I draw the line if you say that they will fail because their decision is evil or corrupting.

p.s. I'm talking about individuals making decisions in a free market. Of course true evil can come into play when you have a over powered, force driven socialistic scheme that for the greater good breaks people's spirits.

If it works, it works, and no harm done if it doesn't. Is that your drift? Nobody can detach morality from this since, for starters, the CEO instigated his scheme with his particular moral view in mind. Then look down the road a little, and you'll see copy-catting by many more "moral" companies like his, all averaging-out income in an effort to make all people equal - and you have the start of "for the greater good" utilitarianism. The State happily enforcing the policy on a national scale, usually will arrive next - laissez-faire capitalism is its enemy, after all.

If this is all too moralistic, remember what would be immoral, a large scale manipulation of people's incomes, out of context of their individual ability and drive: anti-reality, anti-mind, anti-individual and freedom limiting. Yes, the CEO has the right to do as he pleases, and we have the right to judge his actions and consider the consequences..

Why not,

please please please listen to me

YOU ARE JUMPING TO CONCLUSIONS

there is no mention of averaging out incomes, read the article. The decision in question is the raising of the base pay. Do you understand what base pay is? What was the last job you applied for, was there a minimum amount that those in that field get paid? That is a base pay.

The decision was to raise that base pay. That does not mean that everyone will get paid the same. Initailly maybe, because at that point in the article the long term employee who left was only getting 41000 so he gets a raise along with everyone else BUT that doesnt mean that raises based on merit will not take place. AND that doesn't mean that those who already get paid more than 70 grand take a paycut. They get a raise too!

Isn't it funny how the ONLY ones concerned about "income inequality" are the failures who can't pull their own weight!

I feel the same way but in reverse. Only those who are worried about what others make are failures who need to spend more time worrying about themselves than others

Isn't it more productive to talk about Wal Mart on OL from what I think is your primary perspective than that CEO incompetent in Seattle? So this is my question to you: Just what do you want to talk about? A moral issue per a business, a moral issue per any individual? Any moral issue? It can't be just nuts and bolts.

--Brant

I think my biggest problem with the 20th century comparisons and the claims of separating pay from performance is the lack of allowing freedom of different businesses or individuals to choose and experiment on how they run their lives/businesses. I wasn't attempting to discuss nuts and bolts as far as the business success or failure is concerned. I make no analysis or prediction on whether this decision was supported by the companies financials or by how canny or profession the CEO is.

I simply feel that the article is written in a clearly biased fashion, trumping up the fact that two employees out of hundreds has quit over the decision, and I have a problem when people blindly jump on the bandwagon condemning someone (in moral terms) for a decision that the commentators don't agree with. Especially when we can easily find other examples in history or even possibly in those commentators lives where they would justify those exact same decisions.

Example Moralist, who from a business perspective I respect, jumped in immediately claiming that the decision to give people money without performance was morally wrong but then in his last post (#70) says that he happily undercharges customers simply because he feels like it. If we took the strict Objectivist, black or white, right or wrong stance shouldn't his actions be considered immoral as well? If his customers have not done any more than usual then rewarding them with cheaper prices is wrong. Not according to me, but according to that logic.

The raising of the base pay could very well be a disaster from a nut and bolts view but that's what the market is for. People make decisions, and either those decisions weed those decision makers out (providing precedence for later decision makers) or they rise. Hindsight will then attach all sorts of justifications as to why this or that situation is different. "Paying these employees much higher than market rates helped x company attract and retain the best talent" or "Paying these employees much higher than the market rate was the fatal decision that broke x company's back"

From my perspective all that is nonsense. Unless you have actual numbers than all you have is speculation. Don't get me wrong, I'm not against prediction or even betting on an outcome, where I have a problem is when moral considerations are attached to it. You can say that I predict this company or decision will fail but I draw the line if you say that they will fail because their decision is evil or corrupting.

p.s. I'm talking about individuals making decisions in a free market. Of course true evil can come into play when you have a over powered, force driven socialistic scheme that for the greater good breaks people's spirits.

Unfortunately Baal, JTS is immune to the actual effects of reality (like the way free market prices and wages are determined)

By trial and error I discovered that I can become immune to the effects of the economic reality created by the unproductive sloth and fiscal irresponsibility of others by creating my own free market Capitalist economic micro climate. Most people don't realize just how much power they can actually wield as a sovereign individual to make their own "weather".

Greg

well if I were you, as more success comes your way make sure you don't pass even the slightest increase onto any of your partners or employees because you'll be compared to the 20th Century Motor company

while the "moochers" who stay behind, only meriting under-average pay, will likely bring down the company.

Why does there seem to be this assumption that moochers were even hired at the job? I mean couldn't there be the case that the company has a rigorous interview and training process? I'm not saying that they do but several of the comments here make it seem like the workers voted for this base salary hike. Like they formed a union or all got together and screamed for what they deserved. Lets be clear that this was the decision of one free mind. It was a surprise to the employees from what I've read about the case.

Do you assume that Google will be brought down by the "moochers" software engineers who all make over 80,000? Or do you assume that Google only hired people who were worth 80 grand?

As I explained at length somewhere, wages and salaries are determined not by whim or by arbitrary decision but by supply and demand. In a free market, prices (including wages and salaries) get adjusted to where supply and demand are equal.

You want to test a theory by prediction? I make the following 2 predictions about the story of the $70,000 base salary:

1. Those employees who are are getting less than the free market salary will tend to leave and get more money elsewhere. If all top quality employees consistently get less than they should, the company will fold, as in a mini Atlas Shrugged.

2. Those employees who are getting more than the free market salary will tend to stay but the company will lose money on them.

Is that the way to run a business?

If the employee produces more value for the company than he is payed it does not matter if he salary is above the average makret salary for his position. If the company is willing to pay his salary than by definition he is receiving the free market wage for his labor.

Unfortunately Baal, JTS is immune to the actual effects of reality (like the way free market prices and wages are determined) and would prefer to continue his standard drive-by-spewings of theoretical models and well trodden philosophical truths. I'd be willing to bet that not only hasn't read the article but he also hasn't read but a few of the comments on this thread.

Derek said:

At what point is any proof offered to even imply that the bottom employees are less productive.

Maisey McMaster is quoted in the article:

“He gave raises to people who have the least skills and are the least equipped to do the job, and the ones who were taking on the most didn’t get much of a bump,” she said.

But she's just "the financial lady who did the math," so perhaps her five years with the company and her position as financial manager doesn't count for much? Again, making salary adjustments like this isn't a huge deal... unless you do it in a way that your business can't support.

Actually she said that the decision did work mathematically and she was only apprehensive about the social repercussions of the public announcement

Derek said:

Well that's the market, deal with it!

But that's the point, this isn't the market. It's one guy who made a very public and unpopular display that the author of the article and many others think was just as much for the publicity as for anything. As I said before, market adjustments in regards to compensation are common in the business world, but they have to be driven by the market to be successful, not by one dude with 120 employees.

So, you are saying that the market is not based on individuals making decisions? The agreed upon base pay for ANY industry started with some CEO deciding to pay someone such. But just to clarify, my point for bringing this up was to confront the idea that businesses were outraged or otherwise leaving him. Those who felt such feeling were only reacting to the possible pressure being brought on them to raise wages if salaries rose in the local market. I have no mercy for those who cannot operate in the market environment and expect protectionism.

Derek said:

Also the numbers reported say that the company was averaging 200 ne clients a month before the announcement but that number went up to 350 in the month after the announcement.

The article also reports that those new clients won't start bringing in revenue for another year. A fact that Mr. Price failed to plan for under his new salary structure.

what does that have to do with anything? I make decisions all the time that wont pay off until later. So what? If Mr. Price failed to see that, then his financial adviser also failed to acknowledge the way business works and they all should be fired.

Derek said:

This is a problem of simply knowing what others make, nothing more nothing less. In fact its not even a problem because from what we have presented to us, only two people left and one because he didn't want to love the raise too much.

And this is why so many companies have rules about sharing salary information with coworkers. It just isn't done, so why would a supposedly business-savvy wunderkind CEO make such a move publicly? Poor, poor business decision that even the most green business owner ought to know better than to make. Regarding the two people who left, according to the article they were "two of Mr. Price's most valued employees." When someone says an employee is valued, they are talking about more than money.

"valued" this pull quote has as much impact on me as a bill board I read one time on a local bank that pulled this exact quote from Fortune magazine "....best rates...."

I'm going to need to see some numbers

Derek said:

Again from my first post, did anyone actually lose pay?

Dan Price did. Just sayin'.

That was by his own choice. He didn't force it upon anyone and your later comment that he did because (paraphrasing) "someone else could have gotten a raise" is a stretch. Any raises given to any CEO could have instead been given to the employees .... and? Any capital investments could have instead went to share holders... and?

Someone simply saying they should get a raise is a smokescreen. Until someone steps up and says that I was due a raise, didn't get one and went I investigated as to why, I was told that the money was going to others or my investigation revealed that money was reallocated from my raise to the decision- then I'll be convinced. Instead we have the one guy who left, talking about others getting as much as he, though he was receiving a 40% raise. WTF?! He cant be satisfied until he gets the 40 and everyone else gets 15, or none? He really does need to run his own company, then he can make his own determinations on who is worthy of a raise.

When the federal minimum wage is raised, are CEO's morally obligated to give all other employees a raise to match the new base pay?

What happened to the whole getting paid based on what I'm worth? Seems like its more like getting paid based only what others get paid

I'm having a hard time understanding how he did the long term employees wrong. He made a minimum for all employees, he didn't cut anyone's wages correct? Was someone due a raise and didn't get it? Its a good possibility that a liberal CEO had many people working for him long term who actually weren't very productive, isn't that what happens in government? The long term employees left because they didn't start at 70K? If that's the case then should every long term employee leave every other job on the planet because the new hires get paid more than they did when they were hired? Are there examples of other CEOs who decided to pay more (Henry Ford I believe is one) and were still highly successful? Don't silicon valley jobs offer relatively high base pay along with free food and day care services? I'm sure that base increases with inflation, why don't the long term employees quit? Sounds like the ones who are being immoral are those few long term employees who think they deserve the world

Maybe I should just read the article smh......

....oh, I just read "long-term employees" - five years !! LOL

Employee A who is very productive sees Employee B who is barely adequate getting the same wage. It is not hard to understand why A could become annoyed. A says "I have done much more for this company than B, why am I not getting more than B?"

and so it goes....

In this instance I can agree with Moralist since I care nothing about what someone else makes. But I can also appreciate (just not relate) to the fact that some people do care to measure their monetary dicks up against others and in that instance they are free to leave the company.

Using that logic I could say that I (symbolic I) should get paid more than the CEO who spends his time on the golf links, or the stock holders who perform almost NO productive function. But no, I wouldn't think that. There is a base pay for CEO's and an financial agreement with those who invest in the company. If the contract is not up to your liking then I'm sure you can go elsewhere.

Personally I went 5 entire years without even asking for a raise since I didn't need it. Didn't effect my ability to pay my bills one iota when someone else got a raise.

....but before I go I just have to say one thing because it appears to me that some people may need to be reminded what socialism is.

Its not a set of business practices, nor is it a political doctrine, those are mere symptoms of the true nature of socialism which is the idea that every is the same. They all think the same, they all like and dislike the same, want the same, and reason the same.

This is why socialism will never work, it spits in the face of reality but with that being said, calling any business decision that you don't agree with socialism, in effect IS SOCIALISM. Just the idea that everyone has to follow your rules sickens me.

If we get to the point where anything that you disagree with is promoted as socialism, which is no different than the race card being pulled at all instances where things don't go your way, then we are indeed in for a long hellish ride.

Everybody's against me. Everybody's for Derek.

--Brant

~whimper~

Hey! I agreed with you.... tangentially. :-)

I'll get back to your point by point argument (which I appreciate) after I eat DL

They're comparable in that the business owners of both companies are attempting to fulfill a perceived need that is undefined and not supported by the market. They're comparable in that both situations address income inequality as if it is an ill that needs curing. They're comparable in that neither business can sustain the changes long term and still remain in business which means that everyone is going to lose. Maybe that's okay with Dan Price. Maybe that's the ultimate income equality he's going for - everyone to be under the bridge with a sign reading "Plz Help."

I found those to be very tangential "comparables."

The 20th Century was structurally different and metaphorical, whereas these are real companies and in Price's case it was a leveling of salaries because his analysis, undisclosed, found that that was what a person needed to survive well.

However, I am willing to listen.

I find them to be tangential, as well. However, to your points....

You say Price leveled salaries as if that's a good thing. It isn't. The proper thing to do is an overall market adjustment IF the market calls for it and the business can support it. I believe I've addressed that in two posts now, and his own financial advisor addressed it with him directly. He substantially increased the salaries of a few and either did not increase or only increased very little everyone else's. That is not the way to do it.

What analysis did he do? If it was undisclosed, how are you privy to it? The article only says that he made his decision based on a friend who was worried about paying her rent and her student loans on her $40,000 salary. Was that the extent of his analysis? If so, it's piss-poor analysis.

Whoa... I made no statement as to what a stupid ass he is.

that's my position. He could be the most bone headed CEO in the world, his "financial lady" (sorry about that DL, I couldn't remember her title) who helped with the analysis could be stupid as well. Hey even the guy who left after preparing to get a 40% raise could be an idiot, my only point is that this is not comparable to the 20th century nor is it comparable to forced socialism, nor is it even "leveling" as some have said. He never said that anyone was losing salary (except for him) and he never said every would get paid the same. He only created a minimum salary. That's it.

20th century explicitly set out to take from some in order to give to others. This guy explicitly thinks that 40,000 is not a living wage so he, with his own money and company, decided to move on his values and provoke change where he can.

As a property owner, when people work for me, I can choose to (attempt to) pay someone 10 dollars for 5 hours work, or I can choose to say that this guy, whether he decided to take the compensation or not, should probably get paid enough to eat lunch, catch the bus home, and buy dinner. I'm not a socialist for that and neither is this guy.

Again he could be wrong and it could collapse around him but if that's what he chooses to do, then its up to him.

Leesa mattress company gives away one mattress for every ten they sell because they see a need. Are they socialist?

Toms shoes, whose give away one pair of shoes for everyone sold charity collapsed, still cannot be considered a socialist.

http://www.forbes.com/sites/ashoka/2014/10/08/a-better-way-to-buy-one-give-one/

Unless you say that because he didn't give the extra profit to the shareholders ..... like they deserve everything .......

If Dan Price would have said "I'm announcing a new base pay of 20,000" would this criticism even exist? And if it wouldn't, why not?

. If you have read Atlas Shrugged then we can clear the decks and rationally go at each other--or come to agree with each other--

read it twice.

My question is how is this, based on the facts of the case presented to us in the article, comparable to the 20th century motor company, based on the facts presented to us in the novel?