Author Topic: average salary: $70k  (Read 52731 times)

tjalexander

  • 5 O'Clock Shadow
  • *
  • Posts: 26
Re: average salary: $70k
« Reply #50 on: August 03, 2015, 08:54:37 AM »
Lol @ bacchi for predicting that this was a great thing.

Thedudeabides

  • Stubble
  • **
  • Posts: 242
Re: average salary: $70k
« Reply #51 on: August 03, 2015, 09:04:55 AM »

Quote
The kid, er, CEO, is getting a lot of free publicity, and that's helping.

I'm not sure it is helping. Apparently they lost a lot of customers over this.  Either due to customers being scared price increases were coming, or not wanting to be associated with what they saw as a political statement.

It's certainly helping new sign ups. Monthly sign ups are apparently up +75% from 200-350.

Schaefer Light

  • Handlebar Stache
  • *****
  • Posts: 1328
Re: average salary: $70k
« Reply #52 on: August 03, 2015, 09:10:21 AM »
I'd be pretty pissed off if I was making $70k and a bunch of people who were making $50k got $20k raises and were suddenly making the same thing as me.
I guess some of the people who were working there felt the same way.

Left

  • Handlebar Stache
  • *****
  • Posts: 1157
Re: average salary: $70k
« Reply #53 on: August 03, 2015, 09:10:37 AM »
um, doesn't this just put a skill cap on the employees? I mean other people are still paying what they want and once they get to the higher skilled jobs, if the company doesn't pay more than $70k, and another is willing to pay $80k+... why wouldn't that employee just switch jobs?

It's nice to have a high tide raises all attitude, but it sounds like you guys think that the CEO then places a ceiling/cap at $70k as well? So people would get "smooshed" at $70k. But I thought the article said $70k would be the minimum and not maximum... so why wouldn't the higher skilled guys be making $100k instead of $70k now?

but no, I don't think it would help people actually... people don't tend to actually "save" more if they make more. I mean sure, 10% of $70k is more than 10% of $50k, but if they could live at $50k, they should be able to save the $20k difference, but they just save 10% still... they will still be working until they are 65.

Schaefer Light

  • Handlebar Stache
  • *****
  • Posts: 1328
Re: average salary: $70k
« Reply #54 on: August 03, 2015, 09:17:20 AM »
um, doesn't this just put a skill cap on the employees? I mean other people are still paying what they want and once they get to the higher skilled jobs, if the company doesn't pay more than $70k, and another is willing to pay $80k+... why wouldn't that employee just switch jobs?

It's nice to have a high tide raises all attitude, but it sounds like you guys think that the CEO then places a ceiling/cap at $70k as well? So people would get "smooshed" at $70k. But I thought the article said $70k would be the minimum and not maximum... so why wouldn't the higher skilled guys be making $100k instead of $70k now?

but no, I don't think it would help people actually... people don't tend to actually "save" more if they make more. I mean sure, 10% of $70k is more than 10% of $50k, but if they could live at $50k, they should be able to save the $20k difference, but they just save 10% still... they will still be working until they are 65.
They should just do what every other decent company does and compensate people based on what they're actually worth in the marketplace.  And I don't believe that those making $70k or more automatically got a raise like the folks making less than $70k.

EricP

  • Bristles
  • ***
  • Posts: 477
Re: average salary: $70k
« Reply #55 on: August 03, 2015, 09:26:19 AM »
It's nice to have a high tide raises all attitude, but it sounds like you guys think that the CEO then places a ceiling/cap at $70k as well? So people would get "smooshed" at $70k. But I thought the article said $70k would be the minimum and not maximum... so why wouldn't the higher skilled guys be making $100k instead of $70k now?

If you've got a job that fair market value is $20k making $70k, then that $50k needs to come from somewhere.  Where?  From the higher earners.  Yes, this includes the CEO, but just doing the math in my head it seemed that there wasn't enough money to make up all the salaries.  So, theoretically, the guy who is fair market value of $100k is going to only be making $95k at this place. 

Additionally, if the idea is that we should all share in the success of the company, it's hard not to be a little begrudging when you see a $20k/yr person go up to $70k/yr and you only get a small increase. 

Finally, it's reasonable to assume that those making more had more to do with the company's success, yet see the smallest benefit and would foster negative feelings.

I think there are much better ways of sending this message than giving everyone a min wage of $70k.  Having a more reasonable min wage and then doing profit sharing across the company seems like a much more equitable way of helping out your employees.


I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8186
  • Location: United States
Re: average salary: $70k
« Reply #56 on: August 03, 2015, 09:29:39 AM »
It's nice to have a high tide raises all attitude, but it sounds like you guys think that the CEO then places a ceiling/cap at $70k as well? So people would get "smooshed" at $70k. But I thought the article said $70k would be the minimum and not maximum... so why wouldn't the higher skilled guys be making $100k instead of $70k now?


The various articles make it sound like the people who were already paid $70k got small raises, but not in line with the percentages that others got. Hence feeling undervalued, and some left to go elsewhere.

J Boogie

  • Handlebar Stache
  • *****
  • Posts: 1531
Re: average salary: $70k
« Reply #57 on: August 03, 2015, 11:11:07 AM »
One of the articles I read mentioned his religious upbringing and referenced the parable about the vineyard owner who hires people in the morning and hires people later in the day and pays them the same (the ones who worked a longer day complained and were reprimanded by the vineyard owner who says "Am I not free to do what I wish with my own money?").

I'll give him the benefit of the doubt and assume he didn't mean to insert himself into the position of God when making this compensation decision.  This parable isn't meant to show how a vineyard owner should act.

But it is a really good parable that tells you that should not be jealous or outraged at another's good fortune, even if you have not received the same good fortune.

Louis CK had a  good take on this message, and while googling, I found Jezebel liked it as well - http://jezebel.com/5815172/a-little-girls-lesson-in-fairness-courtesy-of-louis-ck

I wouldn't have thought that message would appeal to a left leaning magazine since income equality is a pretty big issue to left.  While I agree that  it can lead to dangerous instability and many negative externalities are often unaccounted for (ie environmental damage) when it comes to skyrocketing income inequality, these aren't the main arguments being made.  The fairness argument, the I-have-a-little and you-have-a-lot argument is what's made.  And Obama acknowledged this regarding the proposed increase on capital gains.

Don't get me wrong, the right does plenty of ridiculous fairness policing when it comes to affirmative action, welfare, the perceived media bias etc.  Complaining about fairness and playing the victim tends to be a recurring theme for news personalities of both the right and the left.  Speaking of which, I found it funny hearing that he grew up listening to Rush Limbaugh (for 3 hours a day?? that's nearing Guantanamo levels of auditory discomfort)




bacchi

  • Walrus Stache
  • *******
  • Posts: 7095
Re: average salary: $70k
« Reply #58 on: August 03, 2015, 11:43:17 AM »
Lol @ bacchi for predicting that this was a great thing.

Keeping it classy.

Gen Y Finance Journey

  • Stubble
  • **
  • Posts: 209
  • Location: CA
Re: average salary: $70k
« Reply #59 on: August 03, 2015, 05:43:22 PM »
It's nice to have a high tide raises all attitude, but it sounds like you guys think that the CEO then places a ceiling/cap at $70k as well? So people would get "smooshed" at $70k. But I thought the article said $70k would be the minimum and not maximum... so why wouldn't the higher skilled guys be making $100k instead of $70k now?


The various articles make it sound like the people who were already paid $70k got small raises, but not in line with the percentages that others got. Hence feeling undervalued, and some left to go elsewhere.

But the fact that lower skilled workers at their company are making nearly as much as they are won't make OTHER companies value them any higher. Assuming their salaries are competitive with the rest of the market, going somewhere else won't necessarily get them much more money, they'll just get to earn about the same amount in a company where the lower skilled workers are making a lot less. Is that really any better?

sheepstache

  • Handlebar Stache
  • *****
  • Posts: 2417
Re: average salary: $70k
« Reply #60 on: August 03, 2015, 07:24:13 PM »
It's nice to have a high tide raises all attitude, but it sounds like you guys think that the CEO then places a ceiling/cap at $70k as well? So people would get "smooshed" at $70k. But I thought the article said $70k would be the minimum and not maximum... so why wouldn't the higher skilled guys be making $100k instead of $70k now?


The various articles make it sound like the people who were already paid $70k got small raises, but not in line with the percentages that others got. Hence feeling undervalued, and some left to go elsewhere.

But the fact that lower skilled workers at their company are making nearly as much as they are won't make OTHER companies value them any higher. Assuming their salaries are competitive with the rest of the market, going somewhere else won't necessarily get them much more money, they'll just get to earn about the same amount in a company where the lower skilled workers are making a lot less. Is that really any better?

Fair enough but presumably then the people leaving are the ones who can get more elsewhere meaning Gravity is losing the ones they were getting at below-market rate. Whereas those bargain employees might have stayed for intangible reasons / inertia before.
« Last Edit: August 04, 2015, 08:31:00 AM by sheepstache »

LennStar

  • Magnum Stache
  • ******
  • Posts: 3693
  • Location: Germany
Re: average salary: $70k
« Reply #61 on: August 04, 2015, 08:28:13 AM »
Assuming their salaries are competitive with the rest of the market, going somewhere else won't necessarily get them much more money, they'll just get to earn about the same amount in a company where the lower skilled workers are making a lot less. Is that really any better?
Yes, for them. Unfortunately 90% of people dont care how much others get as long as they themselves get more. The relative is the important point. You have 10 times more fun then the next guy? But he gets $200 a month more, so I am angry!!
Thats capitalism, everthing, including your self-worth, is measured by the paycheck. That is one reason why workless people have such a high rate of depression, even if they dont have monetary problems.

One big problem is that we value "business appearance" much more with money then actual work. The cleaning lady does more to health then any mananger, the cook does more to morale then any manager and the nurse does more to save lifes then any manager, but any manager gets more money then the 3 combined.
Thats why I can really really understand and applaude the general idea of this, but am also convinced they will fail. That is because the bigger the change the bigger the resistance, in society as in physics. 
It woudl likely have been better if the paycheck would not have been increased (well, a bit, like 20% higher low end with diminishing steps), but everyone gets the same share of profit.

Milizard

  • Pencil Stache
  • ****
  • Posts: 769
  • Location: West Michigan
Re: average salary: $70k
« Reply #62 on: August 04, 2015, 08:45:28 AM »
I don't see why this is a problem.  The hardest I ever worked was at a gas station making $4.40/hr.  Maybe the lowest people on the totem pole are doing the grunt work.  Wouldn't you want those to be the best quality workers?  Those are the ones really doing the work for the customers.  I would like to see a flatter pay structure nation-wide.  That way, people are more likely to do the type of work that suits their personalities and abilities, instead of chasing higher pay and being miserable in the process.  The people at the top like to claim that they work the hardest, but do they really?  Maybe a few do, but take a look at the thread about trying to look busy at work.  Those aren't the grunt workers that screw around on the internet all day trying to look busy.

Spork

  • Walrus Stache
  • *******
  • Posts: 5742
    • Spork In The Eye
Re: average salary: $70k
« Reply #63 on: August 04, 2015, 10:45:56 AM »
I don't see why this is a problem.  The hardest I ever worked was at a gas station making $4.40/hr.  Maybe the lowest people on the totem pole are doing the grunt work.  Wouldn't you want those to be the best quality workers?  Those are the ones really doing the work for the customers.  I would like to see a flatter pay structure nation-wide.  That way, people are more likely to do the type of work that suits their personalities and abilities, instead of chasing higher pay and being miserable in the process.  The people at the top like to claim that they work the hardest, but do they really?  Maybe a few do, but take a look at the thread about trying to look busy at work.  Those aren't the grunt workers that screw around on the internet all day trying to look busy.

I'm not sure being paid more necessarily means "works harder."   More often than not, it means "has a skill the other doesn't have."

The brain surgeon probably knows how to mop up the operating room floor.  The janitor doesn't likely know how to remove tumors from inside a skull.  That doesn't mean he couldn't learn.  But he doesn't have the skill, and acquiring that skill likely takes years of study and a pile of money.

Milizard

  • Pencil Stache
  • ****
  • Posts: 769
  • Location: West Michigan
Re: average salary: $70k
« Reply #64 on: August 04, 2015, 01:01:11 PM »
I don't see why this is a problem.  The hardest I ever worked was at a gas station making $4.40/hr.  Maybe the lowest people on the totem pole are doing the grunt work.  Wouldn't you want those to be the best quality workers?  Those are the ones really doing the work for the customers.  I would like to see a flatter pay structure nation-wide.  That way, people are more likely to do the type of work that suits their personalities and abilities, instead of chasing higher pay and being miserable in the process.  The people at the top like to claim that they work the hardest, but do they really?  Maybe a few do, but take a look at the thread about trying to look busy at work.  Those aren't the grunt workers that screw around on the internet all day trying to look busy.

I'm not sure being paid more necessarily means "works harder."   More often than not, it means "has a skill the other doesn't have."

The brain surgeon probably knows how to mop up the operating room floor.  The janitor doesn't likely know how to remove tumors from inside a skull.  That doesn't mean he couldn't learn.  But he doesn't have the skill, and acquiring that skill likely takes years of study and a pile of money.

I think making 4 times or more of that $70k salary probably compensates that brain surgeon quite well.

Schaefer Light

  • Handlebar Stache
  • *****
  • Posts: 1328
Re: average salary: $70k
« Reply #65 on: August 04, 2015, 01:56:15 PM »
I don't see why this is a problem.  The hardest I ever worked was at a gas station making $4.40/hr.  Maybe the lowest people on the totem pole are doing the grunt work.  Wouldn't you want those to be the best quality workers?  Those are the ones really doing the work for the customers.  I would like to see a flatter pay structure nation-wide.  That way, people are more likely to do the type of work that suits their personalities and abilities, instead of chasing higher pay and being miserable in the process.  The people at the top like to claim that they work the hardest, but do they really?  Maybe a few do, but take a look at the thread about trying to look busy at work.  Those aren't the grunt workers that screw around on the internet all day trying to look busy.

I'm not sure being paid more necessarily means "works harder."   More often than not, it means "has a skill the other doesn't have."

The brain surgeon probably knows how to mop up the operating room floor.  The janitor doesn't likely know how to remove tumors from inside a skull.  That doesn't mean he couldn't learn.  But he doesn't have the skill, and acquiring that skill likely takes years of study and a pile of money.

I think making 4 times or more of that $70k salary probably compensates that brain surgeon quite well.
Sure it does.  But if janitors start getting paid the same as surgeons then who in his right mind is going to spend the years and money it takes to get trained as a surgeon?

Milizard

  • Pencil Stache
  • ****
  • Posts: 769
  • Location: West Michigan
Re: average salary: $70k
« Reply #66 on: August 04, 2015, 02:22:06 PM »
I don't see why this is a problem.  The hardest I ever worked was at a gas station making $4.40/hr.  Maybe the lowest people on the totem pole are doing the grunt work.  Wouldn't you want those to be the best quality workers?  Those are the ones really doing the work for the customers.  I would like to see a flatter pay structure nation-wide.  That way, people are more likely to do the type of work that suits their personalities and abilities, instead of chasing higher pay and being miserable in the process.  The people at the top like to claim that they work the hardest, but do they really?  Maybe a few do, but take a look at the thread about trying to look busy at work.  Those aren't the grunt workers that screw around on the internet all day trying to look busy.

I'm not sure being paid more necessarily means "works harder."   More often than not, it means "has a skill the other doesn't have."

The brain surgeon probably knows how to mop up the operating room floor.  The janitor doesn't likely know how to remove tumors from inside a skull.  That doesn't mean he couldn't learn.  But he doesn't have the skill, and acquiring that skill likely takes years of study and a pile of money.

I think making 4 times or more of that $70k salary probably compensates that brain surgeon quite well.
Sure it does.  But if janitors start getting paid the same as surgeons then who in his right mind is going to spend the years and money it takes to get trained as a surgeon?

People who realize that $300k/yr is still a huge salary. People that enjoy that sort of work, find it fascinating, and want to help people.  People who want to use their brains in their occupation and not their brawn.

Look, there's got to be a better example for comparison than a brain surgeon vs a janitor.  Anyone?  Anyone?

Left

  • Handlebar Stache
  • *****
  • Posts: 1157
Re: average salary: $70k
« Reply #67 on: August 04, 2015, 06:09:16 PM »
the secretary vs waiter then... similar pay but one sits in office while another runs around serving food...

but college grads look down on waiting tables once they have a degree even though they might not make any more money than if they had waited tables

Milizard

  • Pencil Stache
  • ****
  • Posts: 769
  • Location: West Michigan
Re: average salary: $70k
« Reply #68 on: August 04, 2015, 06:55:26 PM »
the secretary vs waiter then... similar pay but one sits in office while another runs around serving food...

but college grads look down on waiting tables once they have a degree even though they might not make any more money than if they had waited tables

Interesting example, but I'm not sure what your point is with it though.  I once considered quitting my post university cubicle job in order to be a waitress for a big boost in pay.  Waiting tables doesn't suit my personality, however.  Are you saying everyone would be a secretary vs a waiter if the pay was the same?   I guess you could go for whatever job you may qualify for, as I don't see many *strictly* secretarial type jobs any more.  They are called on to do much more.  An interesting side-note, as an accountant, I'm pretty damn sure I made significantly less than the administrative assistant who sat near me, and not because she had more skills or knowledge than I did, because she did not.

Left

  • Handlebar Stache
  • *****
  • Posts: 1157
Re: average salary: $70k
« Reply #69 on: August 04, 2015, 07:00:44 PM »
someone asked for an example other than a janitor vs doctor making 300k...

if the job type didnt matter, both a secretary or waiter making the same amount would have equal people wanting to work there, but once a degree is added, it tilts to one job vs the other.

so a 70k janitor vs a 70k engineer would be the point im making... add in the degree and people want to tilt to one job even if the pay of the other doesnt really affect their own job performance. the engineer would feel slighted even though his performance hasnt changed, he just wants a salary hike just because someone else got one. minimum wage hikes are the same, people think that if the minimum goes up they dont like it because their own may not... but it hasnt changed how they do their own job

i could see the engineers taking a same pay somewhere else to have that wage difference again...
« Last Edit: August 04, 2015, 07:07:30 PM by eyem »

Milizard

  • Pencil Stache
  • ****
  • Posts: 769
  • Location: West Michigan
Re: average salary: $70k
« Reply #70 on: August 04, 2015, 08:53:03 PM »
someone asked for an example other than a janitor vs doctor making 300k...

if the job type didnt matter, both a secretary or waiter making the same amount would have equal people wanting to work there, but once a degree is added, it tilts to one job vs the other.

so a 70k janitor vs a 70k engineer would be the point im making... add in the degree and people want to tilt to one job even if the pay of the other doesnt really affect their own job performance. the engineer would feel slighted even though his performance hasnt changed, he just wants a salary hike just because someone else got one. minimum wage hikes are the same, people think that if the minimum goes up they dont like it because their own may not... but it hasnt changed how they do their own job

i could see the engineers taking a same pay somewhere else to have that wage difference again...


An engineer and janitor--thats a good comparison to make!  I'm not an engineer or a janitor, so I'm just guessing here, but I would imagine the work an engineer does is much more interesting, rewarding and creative than cleaning floors and toilets.  Also, I'm guessing that a $70k/yr janitor is going to be expected to hustle all shift, and not meander through the halls like they seem to do.  (Although, the shitty low paying jobs that I've had expected me to hustle all shift.). So, why would the engineer by jealous of the janitor in that instance?  Why the need to feel superior through higher pay?  It's like a different kind of class warfare going on here--trying to keep the class structure in place.

So, what if we compare an IT guy making $70k to a social worker getting a raise up to $70k from maybe $50k?  Is IT guy going to feel shafted in this instance too because he didn't get a raise? 

MrMoogle

  • Handlebar Stache
  • *****
  • Posts: 1136
  • Age: 39
  • Location: Huntsville, AL
Re: average salary: $70k
« Reply #71 on: August 05, 2015, 07:07:22 AM »
Say you just graduated high school, and you already have Mustacian traits.  You look at your options.  You could become a Janitor, and make 70k a year.  Or you can go to college for 4 years, and get 30k in loans, and become an engineer, and make 70k a year.  Which would you choose?  You could even part time as a Janitor and come out with no loans. 

I would have become the janitor and retire in ~8 years. 

For what it's worth, as an engineer, it took me 4 years of experience to get over the 70k mark.  Although I do live in a LCOL area.

Valencia de Valera

  • 5 O'Clock Shadow
  • *
  • Posts: 30
Re: average salary: $70k
« Reply #72 on: August 05, 2015, 07:25:33 AM »
http://www.huffingtonpost.com/entry/people-have-turned-on-gravity-payments-ceo-dan-price_55c0ce33e4b06f8bedb5f32f?kvcommref=mostpopular

Just saw this article this morning, and then happened upon this thread. Apparently many of the company's clients didn't like the idea, and the CEO has even been sued by his brother over it, for some reason that isn't explained in the article.

Ryo

  • 5 O'Clock Shadow
  • *
  • Posts: 52
  • Location: Japan
Re: average salary: $70k
« Reply #73 on: August 05, 2015, 08:54:18 AM »
So the guy who was (presumably) quite happy making 70K before, is now upset because his colleagues, who were making less, are now being pushed up to his level of compensation?  This guy would presumably have been compensated at the market rate, and even assuming he got no raise (which is just an assumption), his position relative to others IN SOCIETY (as opposed to within his small company) is unchanged. 

Are humans so fallible that we need to judge our own value relative to those around us? 
I would have thought that readers of the MMM forum would be above this petty kind of thinking, but it's been very interesting reading the responses in this thread.

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8186
  • Location: United States
Re: average salary: $70k
« Reply #74 on: August 05, 2015, 09:17:38 AM »
Quote
So the guy who was (presumably) quite happy making 70K before, is now upset because his colleagues, who were making less, are now being pushed up to his level of compensation?

But within his company- he's working his ass off, and the guy at the other desk is barely doing anything, and they make the same.

In that case, I'd want my job responsibilities changed so I don't have to work as hard for that 70k as I used to; because the other people aren't having to; they are coasting on an easy job with a minimum of 70k pay.


Now, if he was a highly paid do-nothing, that's a different case; but the articles I've read, the people who left were mostly top talent.

LennStar

  • Magnum Stache
  • ******
  • Posts: 3693
  • Location: Germany
Re: average salary: $70k
« Reply #75 on: August 05, 2015, 09:22:57 AM »
Say you just graduated high school, and you already have Mustacian traits.  You look at your options.  You could become a Janitor, and make 70k a year.  Or you can go to college for 4 years, and get 30k in loans, and become an engineer, and make 70k a year.  Which would you choose?  You could even part time as a Janitor and come out with no loans. 

I would have become the janitor and retire in ~8 years. 

For what it's worth, as an engineer, it took me 4 years of experience to get over the 70k mark.  Although I do live in a LCOL area.
I still dont see the. You can do both. If you are happier doing enineer, do it. If not, do not do it.

Seriously, why is it the money again? MONEY MONEY MONEY???

Where is the moral minus that some things need a longer education?

I want a reason here why the same pay for everyone should be bad. A reason not just "imagine you take longer for your education some some other bloke". because that is already the case. Heck, Bill gates did not end university and the richest man of the world - if I remember correctly - has only a few years of school.
Why should longer education automatically entitle you to more money? I know a few people without work who have a longer education (and sometimes better graded) then the average 6 figure manager.

The world does not work this way, so why should it in this one company?

Ryo

  • 5 O'Clock Shadow
  • *
  • Posts: 52
  • Location: Japan
Re: average salary: $70k
« Reply #76 on: August 05, 2015, 09:29:14 AM »
Quote
So the guy who was (presumably) quite happy making 70K before, is now upset because his colleagues, who were making less, are now being pushed up to his level of compensation?

But within his company- he's working his ass off, and the guy at the other desk is barely doing anything, and they make the same.



But this is the point I'm trying to make.  Assuming that 70K is the actual market compensation for whatever position he is in, why should he care that the secretary next to him also makes 70K?  Why not just be happy for her?  Why does her windfall make him miserable enough that he feels he needs to quit?  It's not like he's not going to make more anywhere else...


I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8186
  • Location: United States
Re: average salary: $70k
« Reply #77 on: August 05, 2015, 09:36:23 AM »

But this is the point I'm trying to make.  Assuming that 70K is the actual market compensation for whatever position he is in, why should he care that the secretary next to him also makes 70K?  Why not just be happy for her?  Why does her windfall make him miserable enough that he feels he needs to quit?  It's not like he's not going to make more anywhere else...

He might. I know some people who work for slightly less than market rate because they really like the culture of their company and feel valued for their work. If you are top talent, you can usually get more by being willing to go to a new company. Companies WANT top talent and pay for it.  It is much easier to find a job when you already have one.

But even if he doesn't- maybe he felt happy for the secretary at first; but then after seeing him/her not work nearly as hard, or as much overtime, it builds resentment. "If I can make $70k at this company being a secretary, why should I do the work of a developer?"  Overtime it creates a negative work environment.

I once worked with a person with the exact job title as me who made over twice my salary. She had been with the company for ages, including through years when the average raise was 10-15%! I would NEVER get to the salary she was at with the now "high" raises of 2% I was getting (the average raise was below 1%). She NEVER worked overtime (we were exempt, it is not compensated); she never traveled for business meetings; her work was subpar, she had a 40% success rating to my 85% (the goal rating was 45%...) and she often received negative reviews.  But she got paid SO much more than me. Yes, I was paid a reasonable market rate for my years of experience; but I wasn't at all being compensated for what I was actually contributing to the company (and their bottom line).  You think that didn't build resentment?  I liked her as a person, I often went to lunch with her, but it pissed me off to no end.  I ended up leaving that company because they didn't value my contributions. Because in industry, one of the main ways to show value is through money. There are some other things, but money is a main one. And I went somewhere that paid me a lot more, doing exactly the same job. They wouldn't have offered me that much if I had been unemployed and was looking for a job; but for the chance to get me away from company A? My value went up.
« Last Edit: August 05, 2015, 09:38:26 AM by iowajes »

Baron235

  • 5 O'Clock Shadow
  • *
  • Posts: 90
Re: average salary: $70k
« Reply #78 on: August 05, 2015, 09:36:41 AM »
Say you just graduated high school, and you already have Mustacian traits.  You look at your options.  You could become a Janitor, and make 70k a year.  Or you can go to college for 4 years, and get 30k in loans, and become an engineer, and make 70k a year.  Which would you choose?  You could even part time as a Janitor and come out with no loans. 

I would have become the janitor and retire in ~8 years. 

For what it's worth, as an engineer, it took me 4 years of experience to get over the 70k mark.  Although I do live in a LCOL area.
I still dont see the. You can do both. If you are happier doing enineer, do it. If not, do not do it.

Seriously, why is it the money again? MONEY MONEY MONEY???

Where is the moral minus that some things need a longer education?

I want a reason here why the same pay for everyone should be bad. A reason not just "imagine you take longer for your education some some other bloke". because that is already the case. Heck, Bill gates did not end university and the richest man of the world - if I remember correctly - has only a few years of school.
Why should longer education automatically entitle you to more money? I know a few people without work who have a longer education (and sometimes better graded) then the average 6 figure manager.

The world does not work this way, so why should it in this one company?

People are paid according to the skills or services they provide.  The more in demand or the smaller supply of a skill or service, the more you get paid.  It is simple economics.   


Ryo

  • 5 O'Clock Shadow
  • *
  • Posts: 52
  • Location: Japan
Re: average salary: $70k
« Reply #79 on: August 05, 2015, 10:04:20 AM »

But this is the point I'm trying to make.  Assuming that 70K is the actual market compensation for whatever position he is in, why should he care that the secretary next to him also makes 70K?  Why not just be happy for her?  Why does her windfall make him miserable enough that he feels he needs to quit?  It's not like he's not going to make more anywhere else...

He might. I know some people who work for slightly less than market rate because they really like the culture of their company and feel valued for their work. If you are top talent, you can usually get more by being willing to go to a new company. Companies WANT top talent and pay for it.  It is much easier to find a job when you already have one.

But even if he doesn't- maybe he felt happy for the secretary at first; but then after seeing him/her not work nearly as hard, or as much overtime, it builds resentment. "If I can make $70k at this company being a secretary, why should I do the work of a developer?"  Overtime it creates a negative work environment.

I once worked with a person with the exact job title as me who made over twice my salary. She had been with the company for ages, including through years when the average raise was 10-15%! I would NEVER get to the salary she was at with the now "high" raises of 2% I was getting (the average raise was below 1%). She NEVER worked overtime (we were exempt, it is not compensated); she never traveled for business meetings; her work was subpar, she had a 40% success rating to my 85% (the goal rating was 45%...) and she often received negative reviews.  But she got paid SO much more than me. Yes, I was paid a reasonable market rate for my years of experience; but I wasn't at all being compensated for what I was actually contributing to the company (and their bottom line).  You think that didn't build resentment?  I liked her as a person, I often went to lunch with her, but it pissed me off to no end.  I ended up leaving that company because they didn't value my contributions. Because in industry, one of the main ways to show value is through money. There are some other things, but money is a main one. And I went somewhere that paid me a lot more, doing exactly the same job. They wouldn't have offered me that much if I had been unemployed and was looking for a job; but for the chance to get me away from company A? My value went up.


The person that feels the need quit merely because someone else "lower" than him starts making the same amount of money, seems to be unable to see that his entire situation, and place in society as a whole, is actually unchanged from the day before.  Instead, he's simply too busy getting all worked up about the perceived unfairness in one small localized setting, which happens to be sitting right next to him.  And I found it amusing that so many people see things in such a narrow light.

Of course, like in your situation described above, the unfairness could be real.  It also sounded like you were underpaid.  But if you were fairly (or over) compensated, would you really start getting upset because 20-30 other people got raises that you feel they don't deserve?  There are whole companies full of people (Goldman Sachs, Morgan Stanley and their ilk come to mind) that get paid handsomely just to move other people's money from point A to point B.  I don't feel they deserve it, and I don't think it's fair, but what can I do?  Quit my job 100K job in anger and go out seeking a 350K+bonus annual package because that's what those guys get?  Because I feel I contribute more to society?  Obviously not going to happen.  And, at the end of the day, my 100K places me quite nicely in societal terms, even if the Wall Street types would look down on my salary with a dismissive snort. 
« Last Edit: August 05, 2015, 10:06:44 AM by Ryo »

Spork

  • Walrus Stache
  • *******
  • Posts: 5742
    • Spork In The Eye
Re: average salary: $70k
« Reply #80 on: August 05, 2015, 10:06:19 AM »
Say you just graduated high school, and you already have Mustacian traits.  You look at your options.  You could become a Janitor, and make 70k a year.  Or you can go to college for 4 years, and get 30k in loans, and become an engineer, and make 70k a year.  Which would you choose?  You could even part time as a Janitor and come out with no loans. 

I would have become the janitor and retire in ~8 years. 

For what it's worth, as an engineer, it took me 4 years of experience to get over the 70k mark.  Although I do live in a LCOL area.
I still dont see the. You can do both. If you are happier doing enineer, do it. If not, do not do it.

Seriously, why is it the money again? MONEY MONEY MONEY???

Where is the moral minus that some things need a longer education?

I want a reason here why the same pay for everyone should be bad. A reason not just "imagine you take longer for your education some some other bloke". because that is already the case. Heck, Bill gates did not end university and the richest man of the world - if I remember correctly - has only a few years of school.
Why should longer education automatically entitle you to more money? I know a few people without work who have a longer education (and sometimes better graded) then the average 6 figure manager.

The world does not work this way, so why should it in this one company?

People are paid according to the skills or services they provide.  The more in demand or the smaller supply of a skill or service, the more you get paid.  It is simple economics.   

This. 

And it's not necessarily "education" (in the traditional sense) that makes the difference.  A good welder may not be "educated", but he/she has a lot of practice and training and is going to make pretty decent bucks.  (Same goes for a lot of skilled trades.)

Milizard

  • Pencil Stache
  • ****
  • Posts: 769
  • Location: West Michigan
Re: average salary: $70k
« Reply #81 on: August 05, 2015, 10:58:06 AM »
One thing that is being missed/ignored here is the fact that, if the "easy" job is going to pay the same as the "skilled/hardworking" job, supply of labor for the "easy" job will skyrocket.  This would increase the quality of the "easy" job workforce, as well as making the demands placed on that "easy job" worker much more in line with the "skilled/hardworker".   That janitor will be required to work as much overtime as the engineer, or else someone else will fill their shoes.

 Employers now try to increase the demands placed upon their low-wage workers, and wonder why they can't find good help.  If you pay enough, you will find someone willing to work their ass off for you.

Thedudeabides

  • Stubble
  • **
  • Posts: 242
Re: average salary: $70k
« Reply #82 on: August 05, 2015, 11:13:49 PM »

http://www.huffingtonpost.com/entry/people-have-turned-on-gravity-payments-ceo-dan-price_55c0ce33e4b06f8bedb5f32f?kvcommref=mostpopular

Just saw this article this morning, and then happened upon this thread. Apparently many of the company's clients didn't like the idea, and the CEO has even been sued by his brother over it, for some reason that isn't explained in the article.

New user signups are up 75% each month.

The lawsuit is not directly related to the wage raises. It is over issues that preceded the wage raises.

LennStar

  • Magnum Stache
  • ******
  • Posts: 3693
  • Location: Germany
Re: average salary: $70k
« Reply #83 on: August 06, 2015, 01:44:02 AM »
"If I can make $70k at this company being a secretary, why should I do the work of a developer?"  Overtime it creates a negative work environment.
Ah, here we come to the point. It is not the pay scale that creates "negative work environment", it is the individual person who cannot stand something. Not the surroundings anger us, we get angry about the surroundings.

Schaefer Light

  • Handlebar Stache
  • *****
  • Posts: 1328
Re: average salary: $70k
« Reply #84 on: August 06, 2015, 06:06:29 AM »
It's obvious that this kind of crap isn't sustainable.  Any economist could probably give you a dozen reasons why it won't work.  The most important reason (to me) is that people aren't going to strive to improve and work in really challenging fields if there's no reward for doing so.  You want good doctors?  Well, you sure as hell better pay them more than the nurses.

golden1

  • Handlebar Stache
  • *****
  • Posts: 1541
  • Location: MA
Re: average salary: $70k
« Reply #85 on: August 06, 2015, 06:56:25 AM »
The petty mentality exhibited in this thread is why the elite is going to continually suck all the money out of the middle class.  It is so, so easy to make people fight each other over things like this, and it is just so sad.

 If the secretary at my work started making 70K tomorrow (my salary), I would have the same motivation as I did yesterday.  What she is making doesn't make any difference to my life at all.  It just isn't relevant.  I don't know all the factors in her employment situation.  Maybe she is a really excellent secretary.  Maybe she has seniority (I think experience has value).  Maybe she blew the CEO.  I don't care.  It doesn't matter, and it is out of my circle of control so I don't concern myself with it. 

I like the Louis C.K. mentality.  "You should never be concerned about what you neighbor has unless it's to be sure they have enough."  That is a mustachian quote if I ever heard one. 

dude

  • Handlebar Stache
  • *****
  • Posts: 2369
Re: average salary: $70k
« Reply #86 on: August 06, 2015, 07:20:59 AM »
Not weighing in on the issue one way or the other, but this seems relevant to the discussion going on here:

https://www.distractify.com/share-the-wealth-1279867405.html

Left

  • Handlebar Stache
  • *****
  • Posts: 1157
Re: average salary: $70k
« Reply #87 on: August 06, 2015, 07:44:07 AM »
Quote
If the secretary at my work started making 70K tomorrow (my salary), I would have the same motivation as I did yesterday.  What she is making doesn't make any difference to my life at all.  It just isn't relevant.  I don't know all the factors in her employment situation.  Maybe she is a really excellent secretary.  Maybe she has seniority (I think experience has value).  Maybe she blew the CEO.  I don't care.  It doesn't matter, and it is out of my circle of control so I don't concern myself with it. 
so would you care if she made twice as much as you?

Then take this to the next level and up until you get to the CEO... why do people care how much a CEO makes then? But we see anger over how much CEOs get paid these day as well
« Last Edit: August 06, 2015, 07:45:48 AM by eyem »

dude

  • Handlebar Stache
  • *****
  • Posts: 2369
Re: average salary: $70k
« Reply #88 on: August 06, 2015, 08:02:37 AM »
An Unintended Consequence of Wal-Mart Pay Raise: Unhappy Workers

http://www.bloomberg.com/news/articles/2015-08-06/an-unintended-consequence-of-wal-mart-pay-raise-unhappy-workers

Interesting, and I can relate to it anecdotally.  There are three attorneys in my office, two GS-14s, one GS-13.  Recently, as a result of many factors, including that our component was somehow not on the same pay structure as the rest of our (large) federal agency, they re-structured the pay for our component to bring it in line with the rest of the agency.  The result is one of the GS-14s (me) became a GS-15, and the GS-13 became a GS-14, which resulted in immediate and not insignificant raises for both of us.  The other GS-14 in the office got nothing, as she was already a 14, and is not a supervisor.  It has engendered a bit of jealousy and disgruntlement in this individual.  And really, I do feel a little bad about it, but she partly has only herself to blame.  There are tons of opportunities in this agency to move and promote, but she doesn't want to do that.

Milizard

  • Pencil Stache
  • ****
  • Posts: 769
  • Location: West Michigan
Re: average salary: $70k
« Reply #89 on: August 06, 2015, 08:59:00 AM »
The petty mentality exhibited in this thread is why the elite is going to continually suck all the money out of the middle class.  It is so, so easy to make people fight each other over things like this, and it is just so sad.

 If the secretary at my work started making 70K tomorrow (my salary), I would have the same motivation as I did yesterday.  What she is making doesn't make any difference to my life at all.  It just isn't relevant.  I don't know all the factors in her employment situation.  Maybe she is a really excellent secretary.  Maybe she has seniority (I think experience has value).  Maybe she blew the CEO.  I don't care.  It doesn't matter, and it is out of my circle of control so I don't concern myself with it. 

I like the Louis C.K. mentality.  "You should never be concerned about what you neighbor has unless it's to be sure they have enough."  That is a mustachian quote if I ever heard one.

+1

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8186
  • Location: United States
Re: average salary: $70k
« Reply #90 on: August 06, 2015, 09:20:16 AM »
or I would voluntarily demote myself to the role of my subordinates so that I could make slightly less money with considerably less stress and responsibility and sleep better at night. 


Exactly. And chances are that option was NOT offered.



Richie Poor

  • 5 O'Clock Shadow
  • *
  • Posts: 69
  • Age: 42
  • Location: Texas
Re: average salary: $70k
« Reply #91 on: August 06, 2015, 09:57:57 AM »
The petty mentality exhibited in this thread is why the elite is going to continually suck all the money out of the middle class.  It is so, so easy to make people fight each other over things like this, and it is just so sad.

 If the secretary at my work started making 70K tomorrow (my salary), I would have the same motivation as I did yesterday.  What she is making doesn't make any difference to my life at all.  It just isn't relevant.  I don't know all the factors in her employment situation.  Maybe she is a really excellent secretary.  Maybe she has seniority (I think experience has value).  Maybe she blew the CEO.  I don't care.  It doesn't matter, and it is out of my circle of control so I don't concern myself with it. 

I like the Louis C.K. mentality.  "You should never be concerned about what you neighbor has unless it's to be sure they have enough."  That is a mustachian quote if I ever heard one.

You may think it is petty, maybe it is, but I think it is basic human psychology. In every aspect of life we expect to be rewarded for extra effort including fitness, video games, sports, and wealth. When we see effort/reward balance get skewed dramatically it creates a disconnect.

I experienced something slightly similar. I've been a contract worker with the same company for 13 years and never minded until the real employees recently got a payout of 2x their annual salary. I spent 10 minutes calculating how many years that would have taken off my path to FI. I spent 10 more minutes being angry that I had done as much or more than most of the actual employees. And then I realized I still have it pretty good and I'm genuinely happy for the employees. I can see how things like that can create problems though. We're humans, we want rewarded for extra effort.

Left

  • Handlebar Stache
  • *****
  • Posts: 1157
Re: average salary: $70k
« Reply #92 on: August 06, 2015, 10:03:51 AM »
Quote
Why am I incurring the extra stress and responsibilities while making only (now) slightly more than my newly minted subordinates?  That's a high stress tax to pay for an extra, say, 2K dollars. I would either leave the company
You would have no "extra" stress... the stress of the original job doesn't change because the job didn't change... Just like if you leave the company, the next company would have stress related to the job you take, regardless of what kind of stresses you had at the former job

Again, if you never knew that your subordinate made more than you, you wouldn't even care... but if you knew that they did, you'd feel disgruntled even though your job doesn't change. Which was my original thing when I said people would quit just to maintain a pay difference between who they think is below them, even thought it doesn't impact how they work...

I'm a red panda

  • Walrus Stache
  • *******
  • Posts: 8186
  • Location: United States
Re: average salary: $70k
« Reply #93 on: August 06, 2015, 10:35:05 AM »
If you are capable of doing the lower stress job also, then yes, it is extra stress to do the job you were previously doing.

Say Job A is a demanding job with a lot of decision making requirements.
Job B is a menial job with very little "on the line" accountability.

Job A is has much more extra stress as compared to Job B.

The person in Job A used to be compensated much more than Job B; making it "worth it" for the person in Job A to take on so much stress.  But if that person can just as easily do Job B- why would they want to keep doing Job A, when Job B pays the same.

Yes, if you go take Job A' at another company; you might get the same pay and do the same work- but if you stay with your original company, I sure as hell wouldn't want to be in Job A anymore. Let me do Job B (or maybe even Job C which is even easier!)

This is why many companies require that pay be kept secret. Because there is huge resentment when people find out that others who do less make more.

And why I loved working for the state, where it is public record- if you can document you are more valuable than the coworker who makes more than you, you often get compensated fairly.

HopefulMustache

  • 5 O'Clock Shadow
  • *
  • Posts: 76
Re: average salary: $70k
« Reply #94 on: August 06, 2015, 11:18:10 AM »
I think this is an interesting discussion. If you buy into the idea that this is about a philosophy, and not about cold capitalism and economics, I think it makes more sense. I love the notion that you should work at a job because, well, you *like* the job, and hey, look at that, the job pays you enough. Need to pay some dues? Work as an assistant to that job for a few years, not doing the work you really want to do, and that is your hardship, rather than poverty. Sounds good to me, if idealistic.

Obviously though, that's not how capitalism works, and arguments about human nature aside, we've all pretty much paid into the system and defined ourselves by income to some extent. That's the name of the game in a capitalist country, for better or worse. So this would be an understandable shock to just about anyone, high or low earner. This kind of scheme only works if people buy into the new system (which can take time). I think it'd be pretty awesome to see if, in time, maybe, enough top-performers from other companies join Gravity because the philosophy appeals to them to offset the ones that feel screwed. As many have said, it'll be fascinating if this experiment lasts for 3-5+ years to see the ripple effects.

iris lily

  • Walrus Stache
  • *******
  • Posts: 5684
Re: average salary: $70k
« Reply #95 on: August 06, 2015, 11:47:21 AM »
I think this is an interesting discussion. If you buy into the idea that this is about a philosophy, and not about cold capitalism and economics, I think it makes more sense. I love the notion that you should work at a job because, well, you *like* the job, and hey, look at that, the job pays you enough. Need to pay some dues? Work as an assistant to that job for a few years, not doing the work you really want to do, and that is your hardship, rather than poverty. Sounds good to me, if idealistic.

Obviously though, that's not how capitalism works, and arguments about human nature aside, we've all pretty much paid into the system and defined ourselves by income to some extent. That's the name of the game in a capitalist country, for better or worse. So this would be an understandable shock to just about anyone, high or low earner. This kind of scheme only works if people buy into the new system (which can take time). I think it'd be pretty awesome to see if, in time, maybe, enough top-performers from other companies join Gravity because the philosophy appeals to them to offset the ones that feel screwed. As many have said, it'll be fascinating if this experiment lasts for 3-5+ years to see the ripple effects.

I thought that Gravity as a company was in trouble, based on an article I read.

But if you think it is still a viable company, I agree, it will be interesting to see how this all shakes out. I like that the CEO made this move, it's interesting, and it's his own dime. I am not a stockholder.

Travis

  • Magnum Stache
  • ******
  • Posts: 4226
  • Location: California
Re: average salary: $70k
« Reply #96 on: August 06, 2015, 03:51:07 PM »
An aspect that we haven't discussed but the high-skilled employees might have considered is what comes next.  The latest update pretty much says the company is having financial problems due to the salaries and the lawsuit.  His profit margin sounds pretty small right now and that may have affected the raise/bonus schedule of his workforce.  We've put our cards on the table for the unskilled person being bumped to your skilled salary, but what if doing that killed the budget for future raises?  Would you be as happy and willing to stay if your career and salary progression was stunted due to this change of events?

Thedudeabides

  • Stubble
  • **
  • Posts: 242
Re: average salary: $70k
« Reply #97 on: August 06, 2015, 09:39:09 PM »

An aspect that we haven't discussed but the high-skilled employees might have considered is what comes next.  The latest update pretty much says the company is having financial problems due to the salaries and the lawsuit.  His profit margin sounds pretty small right now and that may have affected the raise/bonus schedule of his workforce.  We've put our cards on the table for the unskilled person being bumped to your skilled salary, but what if doing that killed the budget for future raises?  Would you be as happy and willing to stay if your career and salary progression was stunted due to this change of events?

It's a good question. I don't think we know exactly what the long term impacts of the decision will be. It's all speculative at this point. I think even saying that the company is having financial problems at this point is speculative. The CEO is having some financial issues from taking a huge pay cut and being in a lawsuit with his brother, but that doesn't mean the company is having issues per se.

Here are my thoughts:

• some employees have left, but others are thrilled and Gravity has been inundated with request for people wanting to work with them
• their mom growth has taken off with the media coverage
• new clients have increased by 75%
• if each of these clients brings in $183/mo in annual profit and they are getting 1800 incremental clients for the year, then average profit would raise $330k year.
• the wage increase is occurring over the course of three years. Let's say that 70% of the workforce gets a 10k increase in year 1. That's 700k in salary, which would not be covered by the incremental revenue, but adding in the CEO's pay cut of 930k, it's more than covered.
• If the 17% YoY growth continues in year two, then the second stage of raises would also be covered just by incremental revenue and CEO pay cut.

Once again, this is all speculative, but it doesn't seem unreasonable or out of the question that the company could make it out based on the public info available.

Sure, there will be some short term pain, but at this point, without more details about the financials, we can only speculate as to what will occur.

Albert

  • Handlebar Stache
  • *****
  • Posts: 1244
  • Location: Switzerland
Re: average salary: $70k
« Reply #98 on: August 06, 2015, 09:49:47 PM »
If the company survives in medium term there will be a lot of people wanting to work there and not just lower skilled people, but also high performers who just happen to agree philosophically (politically even) with such a compensation policy. There are plenty of people capable of doing a high quality job and few leaving is no big deal as long as the turnover is kept at a reasonable level. Particularly for a company like theirs who aren't really employing anyone with particularly rare skills. Would be much more of a problem in some tech company if some of the best engineers/scientists were inclined to leave. 

Thedudeabides

  • Stubble
  • **
  • Posts: 242
Re: average salary: $70k
« Reply #99 on: August 06, 2015, 10:39:25 PM »
Exactly.

 

Wow, a phone plan for fifteen bucks!