[Predictable disclaimers, although in my defence, Iâve been banging this drum long before I had (or anticipated to have) a conflict of interest.]
I also find the reluctance to wholeheartedly endorse the âecon-101â story (i.e. if you want more labour, try offering more money for people to sell labour to you) perplexing:
EA-land tends sympathetic using âecon-101â accounts reflexively on basically everything else in creation. I thought the received wisdom these approaches are reasonable at least for first-pass analysis, and weâd need persuading to depart greatly from them.
Considerations why âecon-101â wonât (significantly) apply here donât seem to extend to closely analogous cases: we donât fret (and typically argue against others fretting) about other charityâs paying their staff too much, we donât think (cf. reversal test) that google could improve its human capital by cutting payâkeeping the âtruly committed googlersâ, generally sympathetic to public servants getting paid more if they add much more social value (and donât presume these people are insensitive to compensation beyond some limit), prefer simple market mechs over more elaborate tacit transfer system (e.g. just give people money) etc. etc.
The precise situation makes the âecon-101â intervention particularly appetising: if you value labour much more than the current price, and you are sitting atop a ungodly pile of lucre so vast you earnestly worry about how you can spend big enough chunks of it at once, âtry throwing money at your long-standing labour shortagesâ seems all the more promising.
Insofar as it goes, the observed track record looks pretty supportive of the econ-101 storyâbesides all the points Ryan mentions, compare âprice suppression results in shortagesâ to the years-long (and still going strong) record of orgs lamenting they canât get the staff.
Perhaps the underlying story is as EA-land is generally on the same team, one might hope you can do better than taking oneâs cue from âecon-101â, given the typically adversarial/âcompetitive dynamics it presumes between firms, and employee/âemployer. I think this hope is forlorn: EA-land might be full aspiring moral saints, but aspiring moral saints remain approximate to homo economicus. So the usual stories about the general benefits econ efficiency prove hard to better- and (play-pumps style) attempts to try feel apt to backfire (1, 2, 3, 4 - ad nauseum).
However, although I donât think âPR concernsâ should guide behaviour (if X really is better than ÂŹX, the costs of people reasonablyâif mistakenlyâthinking less of you for doing X is typically better than strategising to hide this disagreement), many things look bad because they are bad.
In the good old days, I realised I was behind on my GWWC pledge so used some of my holiday to volunteer for a week of night-shifts as a junior doctor on a cancer ward. If in the future my âEA praxisâ is tantamount to splashing billionaire largess on a lifestyle for myself of comfort and affluence scarcely conceivable to my erstwhile beneficiaries, spending my days on intangible labour in well-appointed offices located among the richest places heretofore observed in human history, an outside observer may wonder what went wrong.
I doubt they would be persuaded by my defence is any better than obscene: âNot all heroes wear capes; some nobly spend thousands on yuppie accoutrements they deem strictly necessary for them to do the most good!â. Nor would they be moved by my remorse: self-effacing acknowledgement is not expiation, nor complaisance to my own vices atonement. I still think jacking up pay may be good policy, but personally, perhaps I should doubt myself too.
Iâm just saying that when we think offering more salary will help us secure someone, we generally do it. This means that further salary raises seem to offer low benefit:cost. This seems consistent with econ 101.
Likewise, itâs possible to have a lot of capital, but for the cost-benefit of raising salaries to be below the community bar (which is something like invest the money for 20yr and spend on OPâs last dollarâwhich is a pretty high bar). Having more capital increases the willingness to pay for labour now to some extent, but tops out after a point.
To be clear, Iâm sympathetic to the idea that salaries should be even higher (or we should have impact certificates or something). My position is more that (i) itâs not an obvious win (ii) itâs possible for the value of a key person to be a lot higher than their salary, without something going obviously wrong.
[Predictable disclaimers, although in my defence, Iâve been banging this drum long before I had (or anticipated to have) a conflict of interest.]
I also find the reluctance to wholeheartedly endorse the âecon-101â story (i.e. if you want more labour, try offering more money for people to sell labour to you) perplexing:
EA-land tends sympathetic using âecon-101â accounts reflexively on basically everything else in creation. I thought the received wisdom these approaches are reasonable at least for first-pass analysis, and weâd need persuading to depart greatly from them.
Considerations why âecon-101â wonât (significantly) apply here donât seem to extend to closely analogous cases: we donât fret (and typically argue against others fretting) about other charityâs paying their staff too much, we donât think (cf. reversal test) that google could improve its human capital by cutting payâkeeping the âtruly committed googlersâ, generally sympathetic to public servants getting paid more if they add much more social value (and donât presume these people are insensitive to compensation beyond some limit), prefer simple market mechs over more elaborate tacit transfer system (e.g. just give people money) etc. etc.
The precise situation makes the âecon-101â intervention particularly appetising: if you value labour much more than the current price, and you are sitting atop a ungodly pile of lucre so vast you earnestly worry about how you can spend big enough chunks of it at once, âtry throwing money at your long-standing labour shortagesâ seems all the more promising.
Insofar as it goes, the observed track record looks pretty supportive of the econ-101 storyâbesides all the points Ryan mentions, compare âprice suppression results in shortagesâ to the years-long (and still going strong) record of orgs lamenting they canât get the staff.
Perhaps the underlying story is as EA-land is generally on the same team, one might hope you can do better than taking oneâs cue from âecon-101â, given the typically adversarial/âcompetitive dynamics it presumes between firms, and employee/âemployer. I think this hope is forlorn: EA-land might be full aspiring moral saints, but aspiring moral saints remain approximate to homo economicus. So the usual stories about the general benefits econ efficiency prove hard to better- and (play-pumps style) attempts to try feel apt to backfire (1, 2, 3, 4 - ad nauseum).
However, although I donât think âPR concernsâ should guide behaviour (if X really is better than ÂŹX, the costs of people reasonablyâif mistakenlyâthinking less of you for doing X is typically better than strategising to hide this disagreement), many things look bad because they are bad.
In the good old days, I realised I was behind on my GWWC pledge so used some of my holiday to volunteer for a week of night-shifts as a junior doctor on a cancer ward. If in the future my âEA praxisâ is tantamount to splashing billionaire largess on a lifestyle for myself of comfort and affluence scarcely conceivable to my erstwhile beneficiaries, spending my days on intangible labour in well-appointed offices located among the richest places heretofore observed in human history, an outside observer may wonder what went wrong.
I doubt they would be persuaded by my defence is any better than obscene: âNot all heroes wear capes; some nobly spend thousands on yuppie accoutrements they deem strictly necessary for them to do the most good!â. Nor would they be moved by my remorse: self-effacing acknowledgement is not expiation, nor complaisance to my own vices atonement. I still think jacking up pay may be good policy, but personally, perhaps I should doubt myself too.
Iâm just saying that when we think offering more salary will help us secure someone, we generally do it. This means that further salary raises seem to offer low benefit:cost. This seems consistent with econ 101.
Likewise, itâs possible to have a lot of capital, but for the cost-benefit of raising salaries to be below the community bar (which is something like invest the money for 20yr and spend on OPâs last dollarâwhich is a pretty high bar). Having more capital increases the willingness to pay for labour now to some extent, but tops out after a point.
To be clear, Iâm sympathetic to the idea that salaries should be even higher (or we should have impact certificates or something). My position is more that (i) itâs not an obvious win (ii) itâs possible for the value of a key person to be a lot higher than their salary, without something going obviously wrong.