[austenallred]

While I have no idea whether this will work (or if it's a good idea), the most interesting part of all of this, to me, is the backlash from people calling it "unbridled Socialism."

I'm still not sure how a CEO of a profitable company electing to pay his employees more becomes a political debate. If it fails, perhaps it's a failed experiment in Capitalism? It's not like anyone is forcing the business owner to do this.

Theoretically, economics would dictate that by paying people $70K who would get paid $40K would make them fight like crazy to keep their jobs, wouldn't it? And if that's the case, wouldn't one conclude that their productivity would increase, and the company would be much better off? Unwise investment? Perhaps. Unbridled "Socialism?" Definitely not.

http://www.rushlimbaugh.com/daily/2015/04/15/ceo_buys_short_...

[buerkle]

Because it makes a good story in their circle of people who don't know the meaning of socialism. If the CEO of a company is not making 200-300 times their average employee, they think it's socialism.

[mindcrime]

Because it makes a good story in their circle of people who don't know the meaning of socialism.

The thing is, like most words in English, "socialism" has taken on multiple meanings. Like it or not, there's the "textbook" definition and then then colloquial usage. And in America, "socialism" has come to refer to anything that involves redistributing wealth, providing social safety net(s), or otherwise trying to actively manage social inequality. It's a broader, more expansive definition, and I understand why purists hate seeing words diluted, but what can ya do? You can't put the horse back in barn, that ship has already sailed, can't un-ring a rung bell, etc., etc.

[omonra]

I'll try to explain.

People call it socialism because a starting salary of 70k is likely to be uneconomic. Ie the cost of the employee is set above their value to the company. This is done at the expense of other stakeholders (ie management and investors, possibly other employees who would be paid less).

That's kinda the basic premise of socialism - whereby an employee's salary is dissociated from the economic benefit they bring.

Ie the backlash is because he chose to set everybody's salaries fairly high, regardless of seniority, etc.

[justinpombrio]

Since when is an employee's salary based on their value to the company? Occasionally that value can be measured, and an employee will be payed by commission, but that seems like a bit of an exception. How do you judge the value of a business's single, extremely necessary, janitor?

I thought employees were generally paid by their market rate, i.e. how much it would cost to replace them, which is not necessarily related to their value to the company.

[icebraining]

Based, not tied. Specifically, the salary is capped to their value to the company.

[jakebaker]

Conceptually, though in reality/over shorter time frames, it's potentially just as tied to political/human considerations vis a vis the person setting the compensation decision. Maybe easier to avoid this in start-ups, but I saw it happen with some frequency in the context of working for a large global bank. At a certain scale, feudalism or liege-lord-vassal models becomes as good of a mechanism for interpreting outcomes at a human level as anything else.

[cortesoft]

I think the reason people are upset when this is called socialism is because those same people saying "you are paying those people more than they are worth!" don't call it socialism when other people are paid way more than the value of what they contribute to the company (CEOs of failing companies making millions, board members who don't do anything, etc).

[EliRivers]

That's kinda the basic premise of socialism - whereby an employee's salary is dissociated from the economic benefit they bring.

The basic premise of socialism is that the means of production are in social ownership. Paying employees based on the economic benefit they bring is not contradictory to socialism.

People call this socialism because, after so long hearing the term bandied about as a catch-all fear word, they simply apply it to anything that doesn't match their view of the one true God's own capitalism.

[omonra]

As someone who actually lived in a socialist country (the one that started the whole socialism business :), take it from me. While the original framework devised by Marx in the 19th century referred to means of production, in actuality the socialism that came to pass meant that salaries were set for a given position / seniority with no relation to the person's education or how good of a job they were doing.

Ie that was the socialism as it was practiced 'on the ground' (which was in no small part responsible for why USSR economy collapsed).

[EliRivers]

Sure, that's one set of data, but there are other organisations of various sizes and various degrees of socialism. To tar them all with the brush of the former USSR hardly seems fair.

[omonra]

At one point half the world was living under socialism - that's a pretty big set. Perhaps other species would have a better way of executing it :)

[pm24601]

> Ie the cost of the employee is set above their value to the company.

My salary has never been set by my value to the company - it has been set by my ability to negotiate.

[omonra]

How far (in %) is your salary from the average for the position / industry / city you are in?

[pm24601]

Not really relevant since I am working at a startup and have a significant % ownership. I am renegotiating for a much larger % of the ownership. But how much the % is worth at the end of the day remains to be determined.

[omonra]

Fair enough - but then we're talking about completely different things :)

[prostoalex]

> Theoretically, economics would dictate that by paying people $70K who would get paid $40K would make them fight like crazy to keep their jobs, wouldn't it?

From the article, it sounds like his business had a host of employees below and above that threshold, and the ones above felt resentful and unappreciated, with some people quitting. Remains to be seen if it will have any effect on the business, but it's the people above that level that tend to do non-trivial work, and are harder to train and replace.

[ManFromUranus]

> the backlash from people calling this "unbridled Socialism."

It depends on the CEO's reasoning for paying the employees more. If he paid them more for economic reasons, reducing turnover, or incentive pay for increased performance, or a retention bonus or something like that then it's capitalism. If he paid them more because he's moralising about society, or out of pity, or fear of some kind of social backlash, then I would say it's socialism that motivated it.

Okay after reading the article, I would agree with Rush's take on calling it socialism.

[MaysonL]

How about calling it unbridled Christianity?

[PhasmaFelis]

To paraphrase Oscar Wilde, you can judge a man--or a cause--by their enemies. Nothing makes me more interested in embracing socialism than Rush's rush to define socialism as "any action that shows concern for your fellow human."