But the employees are creating more value than they are being paid. The company is a going concern and are still making a profit even while paying everyone at least $70k.
OTOH, take a startup that's paying everyone over $120k and is running in the red on VC money. Those employees aren't (yet) creating enough value to cover their salary.
It's just that it's become so ingrained that companies must maximize profit for their owners at the expense of the employees that we've lost sight of whether it's right or not. (I posit it's not.)
Indeed. I think it's pretty ridiculous how critical people here are of these raises. It's as if Dan is doing something unnatural when he's not maximising his own profits.
A reason we have seen through history is that company owners often use as an argument that it can't possibly work for all kinds of reasons. If someone pays more (or cuts working time) and remains successful it creates an example of viability, and also changes the market - even if only slightly in the case of a single small company like this - and at least some people worry it will affect them to.
OTOH, take a startup that's paying everyone over $120k and is running in the red on VC money. Those employees aren't (yet) creating enough value to cover their salary.
It's just that it's become so ingrained that companies must maximize profit for their owners at the expense of the employees that we've lost sight of whether it's right or not. (I posit it's not.)