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Comment by fengwick3 | Hacker News Reader

> Incorrect. If your company were to pay you the same amount as they profit off of you, you wouldn't be sticking around for very long at that company. That's the basic requirement of your company's mode of production.

Why is this a basic requirement? Assuming by "amount they profit off" an employee, you refer to the economic profit (that is to say the profit after taking into account of all economic costs, including opportunity costs) rather than the nominal value, then I really don't see why this is a basic requirement.

This really perplexes me especially since the amount the company pays should be exactly equals the amount of economic profit you generate for the company, in a perfectly competitive labour market. Of course, reality is not always perfect, but for the average programmer it's pretty close (skills are quite homogeneous and programming jobs are less constrained by geography).

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The capitalist would not be making any money off of the capitalist endeavor if their workers were not being paid less than 100% of their work's value. Incidentally, the economic system is set up in a way to obscure this basic fact. Example:

Say a TV is priced at $100, the raw materials to produce the TV costed $24, and all of the depreciated tools in building the TV costed $1 (the tools wear down, eventually requiring replacement). The labor performed by the worker produced $75 of market value.

If the capitalist pays the worker the fair $75, the capitalist makes nothing off of this whole coordination. Why in the world would the capitalist do that? Not only can the capitalist not take some of the money for themselves, they don't have any money to expand their business. A company that doesn't expand is a company that is eaten alive by companies that do expand. If the worker gets the $75, the capitalist isn't happy, and the capital isn't happy.

$30 goes to investment capital, $20 goes to the capitalist's wallet. The capitalist pays the worker $25.

Software is no exception to this reliable, yet simplified model.

>but for the average programmer it's pretty close (skills are quite homogeneous

I don't think that's right. First of all, programming skills are not homogeneous at all, they are in fact widely dispersed. A bad programmer can very easily destroy value by slowing down his team, in a way that doesn't happen in e.g. a factory environment. It's also not easy to judge programmer skill pre-hiring, so starting salaries are biased toward the mean, making good programmers underpaid and bad programmers overpaid.

Additionally, there are biases, morale considerations, and cultural issues that prevent compensation being equal to value added. Businesses are incredibly averse to firing people (there are some good reasons for this of course, e.g. morale). There is also very strong inequity aversion (again partially a morale issue) that makes it impossible to pay top programmers what they're really worth. Both of these issues lead to significant deviations.

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