WTF?: What's the Future and Why It's Up to Us

by Tim O'Reilly

As we saw in Chapter 11, stock options, which have played such a large role in Silicon Valley wealth, have also become a key part of the problem of income inequality. Even though Silicon Valley companies are actually better than many other companies at distributing the gains because they offer options to virtually every employee, those options are still overwhelmingly weighted toward founders and top management, with each lower rank of workers typically receiving a full order of magnitude less in value. This may or may not be appropriate, based on actual contribution to the business, but the net-net is that a huge proportion of the productivity gains we’ve seen in the past decades have increasingly gone to a small group of managers rather than to all workers. And when the market gets excited, those people get paid in a currency that appreciates at a rate far in excess of anything possible in the real economy.