[satyrnein]

The value you bring is the ceiling on your compensation; employers are not going to pay more than that. Your cost of living is the floor; you're not going to take less than that. The spread between the two is what you're negotiating over.

[ukoki]

Your cost of living is not the floor -- just ask Uber drivers. An income of less than the cost of living is still better than nothing. The floor is the next best thing you have available, or the minimum wage if applicable.

[nybble41]

The actual cost of living is the floor, but cost-of-living metrics frequently overestimate the actual cost of living.

[kgin]

The unfortunate thing is that "cost of living" in this floor definition is literally the cost to stay alive. The floor in a pressurized market will not be the cost of a comfortable life, just a life at all.

[bumby]

In a perfect world with frictionless information, sure.

But in the real-world, there are lots of examples of dead-weight or people who keep their job despite having limited (or even negative) value. Sometimes this is the result of weak leaders unable to bring themselves to fire people, sometimes it's because the litigation risk is too high. On the opposite end, there are lots of examples of people who accept jobs below their cost-of-living (those living off debt, for example).

[robocat]

The key is that there is competition for the job. Your negotiation is limited by the negotiation price of other applicants.

If you are the single possible candidate for a job that is essential for the company, then you can use your monopoly power to get paid more than the “value” you bring.

If the company has an excess of candidates, they may be able to pay less than “CoL” (because CoL varies per applicant, and the minimum is someone in poverty not a standard engineer lifestyle).

I do agree with your statement as a generalisation. Although the maximum a company will pay is usually nowhere near the value you might bring (Apple average pay $150k, Apple average excess profit per employee $300k).

[nybble41]

> If you are the single possible candidate for a job that is essential for the company, then you can use your monopoly power to get paid more than the “value” you bring.

In that scenario your value to the company, together with all the other "essential" budget items, is the total value of the company. If you're somehow getting more than that then the company simply doesn't have the budget to pay for all the essentials and is consequently going bankrupt.

[heipei]

The problem in a lot of modern software-based companies is that the value you create is impossible to calculate. It might be 10x of what your employer thinks or it might even be negative, and I have definitely seen examples for both myself based on my own calculations.

And even in non-software based products and companies industries this might be hard since the output of so many teams gets lumped together and sold as one product. What's the value of the team that creates and markets the MacBook Pro Touch bar? Personally I think it is net negative, and maybe there's even division over that within Apple.