this post was submitted on 09 Dec 2024
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That massively depends on what you consider fair.
Is a million dollars a year fair?
Alphabet (google parent), based on employee numbers had about 1,550,000 man years of work put into it in its entire history 1.
Alphabets current market capitalization is 2.5 trillion dollars.
If each employee was paid an extra million $ yearly in addition to what they were already paid (excluding stocks), there would still be almost a trillion dollars left over for the founders and investors.
Now sure, I had to make a lot of simplifications to calculate this, but even so, it should give you an idea just how valuable Google actually is, compared to the amount of work put into it.
So unless your definition of fair is something along the lines of splitting the profits evenly among employees, then they absolutely could have become billionaires while paying people fairly.
Would that market cap be so high if all those employees were paid that extra million yearly? Market caps depend on more than the actual value of the company's product to society.
Yes, that is what I meant by simplification.
On the other hand Google as search engine and ads (the part that makes money) needs fraction of the employees alphabet has. If they had to pay them that much, they would have never hired most of them.
exactly. A company tant doesnt overexplore its workers cannot grow like alphabet did. The underpayment of the workers is an essential feature of alphabet, and part of what makes its market capitalization that high.
This implies that the answer to my question is "no": if the workers had been paid properly from the start, there wouldnt be the discrepancy that makes the founder billionaires.
No, alphabet has always made most of its money from their ad business, supported by search. Most of their other efforts, including YouTube were never profitable or insignificantly profitable. If they did not over-explore, they would create even more value per employee by not wasting resources. Maybe even more value in absolute terms.
Revenue and market cap are two different things. The 2 trillion you mentioned is market cap, not revenue, much less it is profit.
I agree it would be a prettier picture if companies paid their workers fairly. But the companies would grow differently. Maybe they would grow better, but differently and more distributed. Comparing absolute values between our world and this dreamland seems silly though.
And I hope that in a world where we are paid fairly we would produce less crap, pollute less. Workers wouldnt be desperately making bad/useless products in order to just survive. A smaller gdp could be a good thing.