Dangling the elusive productivity carrot. It's not true.

Here's my personal case study: I have collected a wall of patents over my career. I got another one this week. The IP I and a small group of inventors have created generates licensing fees and is developed into full product lines.

I work multiple programs simultaneously. Last month I led a technical team of about 10 people. We demonstrated a product we came up with and the customer gave us $25 million for the next year to give them a baseline capability. That's not my only project!

This last week I was traveling to demonstrate an unrelated invention. I have three patents for this one. The customer tested it to confirm functionality this week. They're talking about our first 5 year contract for multiple hundred million dollars. This was also a small team (~10 people) project. It's not official. Hopefully we get that contract.

Also this month I got published as a coauthor on an MIT paper showing a new AI invention. It's a way to process AI at the edge for dramatically less power/ cost than is currently possible. If we can miniaturize and make a product out of this it could be a billion dollar a year industry. Basically the AI processing needed to run Alexa, AI image processing on your phone,... could be done on the device rather than transferring the data and doing the processing on GPUs in a data center.

Here's where the lie comes in. Things i have invented make companies a lot of money. Not everyone with my background is this "productive". Do I get paid according to my productivity? If my inventions make a company 100x more money than someone who is maintaining a product line, do I get paid 100x more money? Of course not. You know what I got for the $25M contract next year? A $200 bonus and some cake and ice cream. Where does the money go? Our CEO. The corporate jet. The shareholders.

Don't get me wrong, I get paid well. I don't have to lie on CB income polls. 🙂 but the difference in my pay if I am killing it and if I am doing the bare minimum is probably 2x. The difference to the company is much higher.

Companies practice a form of collective bargaining. They're all looking at their competitors and paying just what they need to in order to attract and maintain the talent they need. Companies have data/ formulas. You have X degree, and Y years of experience... here's the pay band. You're not going to get paid more than Z.

I've seen companies prioritize their collective bargaining (pay bands) over their own bottom lines! My former employer was collaborating on a billion dollar contract. My small R&D group was getting a disproportionate amount of that pie. My current employer wanted that share of the pie so it approached me and members of my team with better salary offers. I warned my employer that I and members of my team had been approached. I gave them the opportunity to match the competing offer ($50k more). They told me they couldn't do it. They lost their key people to a competitor and lost a $100M line of business. Did my new employer calculate my salary offer based on my productivity? Of course not! They figured out the number they needed to pay to poach that line of business. Where did the extra money go? Executives and shareholders.

The last 50 years of salary data will show you where the money goes. Stagnant wages for the rank and file, explosive wealth growth at the top. It makes intuitive sense. It's literally an engineering optimization problem.

Sorry this is so long but this is the takeaway: don't believe the lie that if you kill yourself, work crazy hours, and are super productive that your efforts will be rewarded in proportion to your productivity. They will not be. You might get a 4% raise instead of a 3% raise. It probably won't be worth it. Go home. Spend more time with your family. They remember when you're gone. Your employer is a machine that will promptly forget you when you're gone.

And if a union wants to put their foot on the scale and advocate for higher wages, maybe that's okay. Will it result in inefficiencies? Yes. Will the CEO have to fly commercial? Maybe. Will your employer be sad about that? Yes. Would everyone have voted for unionization if the CEO wasn't getting paid 400x more than everyone else? Maybe not.