>the average tech worker’s salary [will] reach $104,566 in the U.S. — a 6.9% increase since 2020, the report found.
But inflation is over 11% since 2020. This isn't an increase. The average tech worker is making less than they were 2 years ago according to the Dice salary report.
Why do tech workers feel underpaid? Many companies posted record growth and profits over the pandemic, but still give out paltry 3-5% raises every year. The cost savings of work from home must have been enormous for these companies, yet none of that savings or record profits trickled down to the people writing code.
Meanwhile for those that have the time and willpower to grind leetcode, they know they can command a 20-40% raise every few years. It's not a secret that tech companies underpay their employees and bank on them being too complacent to go through the interview gauntlet yet again. Most devs will admit that they couldn't readily pass the interview at even their own company without many hours of studying and practicing algorithms.
> Meanwhile for those that have the time and willpower to grind leetcode, they know they can command a 20-40% raise every few years.
One thing a lot of people forget about this 20-40% number is: It's only true early in your career. It might be hard for younger folks to believe, but you will all hit a ceiling and plateau. My first job hop was for +50%! The next one was about 40%, the next one 15%, and so on. Now, with 20+ years of experience, my last job hop was for maybe 0.25%.
If I could get +40% every time I switched jobs, I'd only have to have switched jobs 9 times in my life in order to be making $1M/yr.
Your example is not actually that crazy at FAANG level companies. I know a lot of people in their early 30's that are L6 or even L7 at big tech companies, maybe they've changed jobs every 2 years on average in their career which is well under 9 times, and those level of roles have a total comp of 500k-750k/yr. With a 4-year stock grant and some luck on the stock performance in that time, that can turn into well over $1M/yr in years 3 & 4 at the company.
You're right that there's a ceiling somewhere, but the ceiling is (or at least has been) ludicrously high for the past decade or so in big tech in the US.
This is a thing that can happen and does happen for a very small number of people.
But when discussing the entire job market, it's a minuscule fraction of tech workers who could even get there if they tried (sometimes due to no fault of their own e.g. location), and it's a much smaller number that even get there at all.
Hitting L7 in mid 30s and catching a massive bull market to pump up compensation is mythical unicorn levels of lucky. It does happen to some people, but it's not useful at all when discussing realistic expectations even 95th percentile developers in the general population.
Getting into a bubble with top FAANG engineers can really distort perceptions of what the market looks like for the median developer.
I've also seen people get to L7 or equivalent by age 30, and they have done it by being phenomenal engineers who quickly produce great results of impressive scope. I'm skeptical that a median engineer can get to L7 by just job-hopping a few times getting promoted each time. If nothing else, organizations just don't need more than a small percent of their people doing L7 level work.
I guess I'm somewhat lucky that I was able to double my compensation over 5 years within the same company, but at this point I've hit the ceiling for rapid compensation growth for the most part.
Maybe I should just grind leetcode for a few months (my dynamic-programming algo skills are a bit rusty) and switch jobs. I would miss the 30 days of PTO though.
leetcode is a good idea - but coding problems are more like to get foot in the door (pass phone screen).
Senior and above candidates are "leveled" and judged using design and behavioral questions - so the way you answer them would impact level and target compensation significantly.
So it make sense to spend time preparing for Systems' Design questions Behavioral questions.
From another point of view - design and behavioral questions original goal is to confirm that candidate have related experience from day to day work, so if you have enough practice on your current job - it is not so much time to prepare for design and behavioral part of interviews.
To be honest, I used to think developers in tech did well, then I worked with some really good sales people in tech and realized they're making WAY more on top free vacations and spiff (even more money) opportunities. It's night and day. We've heard about developers making upwards of 500K, I've seen sales people make triple on a single deal with similar deals lined up for following quarters. It is insane, and most developers don't have a clue when it comes to this type of disparity in pay because they don't interact with that process or people at all in most situations. The work is very different, especially the types of pressure each role faces, but they're valued very differently. Maybe most folks know this, I had no clue.
Sales pay scales are very bimodal. A handful of rock star people make incredible amounts of money, most just get by alright, and maybe a quarter drop out because they can't close enough. It can be very high pressure, and a significant factor in your own success is outside of your control (i.e. depends on your product/service actually being good).
In a more civilized world they'd have higher bases across the board and the commission/incentive structures would be less "winner-take-all" but they operate those divisions like running greyhounds around a track.
This has always been the case. Sales is compensated based on the money they bring in. High-performing salespeople have always made way more than the engineers who built the products they're selling.
My GF works in sales. Nominally she makes $29/hr which is pretty good for someone with only a HS degree, and she is an hourly sales person so she gets time and a half. However, she manages a $1 million dollar portfolio of sales that are already completed and currently in between contract signing and fulfillment, and when the orders are fulfilled she gets .5% of the total contract amount.
Orders take about 6 weeks to be fulfilled barring catastrophe, so when it's all calculated out every 3 months she makes $29 * 62.5 (40 hours plus 15 * 1.5 = 40 + 22.5 paid hours at base rate) * 12 (weeks) + $10,000 bonus every 3 months = roughly $31,750 or $10,567 a month before taxes.
That's almost as much as I make with a BS degree in the tech field. It's crazy, but then again she does work more hours than I do.
There is a little more variance in sales people's earnings, since it's based on commission. Their base salary is probably pretty paltry. To do a proper comparison you want to look at OTE(on target earnings), that's how much they earn if they hit their numbers.
The dark side of sales is that the instant you have a good year, your sales goal gets adjusted upwards which makes it even harder for you next year. If you're selling something that will give you 6-7 figure commissions, you can bet management won't be keeping you around once you've closed that sale.
This is something I don't think gets discussed enough. In my first 10 years of career I basically doubled my salary, by moving every 2-3 years, but I also now know I am pretty much hitting a plateau, anytime I talk with recruiters and talk about the salary I'd like to move which is about 10-20% (which is pretty reasonable given the benefits I got now) then people express reservations. Some people will end up making 200+ but I for an IC type position it seems to top out around 150 is the max, generally. If you want more you need to be an "Enterprise Architect" or "Director" which that becomes a whole different bag of worms. On the other hand love my job, I have enough money to provide for myself and my family, and am working on getting financially secure and paying off debt so I also don't have a strong drive to make more.
Good news, friend. I'm an IC making ~400k/year (it's half RSUs, so that number fluctuates a lot) with 15 years' experience and not much networking/politicking skill
I have some friends making ~600, although a lot of that was getting lucky with RSUs, so I'm not sure they can keep it up in the long run
Well, what is there to discuss about it? (Genuine question).
You could extend the curve and plateau higher, but then, that money is probably going to cause problems elsewhere for the younger generations. Meanwhile, the younger generations are seeking income increases so they can get the basics out of the way and start working towards their goals. They are already at the point where, despite studying for a long time and taking longer to enter the market, they are starting lower and have to delay their goals way more than the generations before them.
I don't really see a solution here. You can make young people work earlier, but that'll flood the job market even more. Boosting young people will make the curve flatter, which exacerbates the problem. You could extend the curve otherwise, but that means your yearly growth at the start will be smaller (which hurts everyone along the curve). The only solution I see here is to take a larger portion of the profits, and stakeholders are fighting tooth and nail to prevent that.
15 years in. Stuck at 200K, and I doubt that's going to go up much because the layoffs have started and we're heading back into "lucky to have a job" territory.
Due to anecdotal reasons, going to have to disagree. Last switch was a 39% increase at 11 years in industry. The market is hot. Most of my friends/colleagues have seen a similar increase the last year.
Obviously market, location, expertise will vary, etc.
The thing with countering averages with anecdotes is that neither really paints a holistic picture of the demand pyramid. Back of napkin calculations say around 4% of US developers work at the FAANGMULAs, meaning that some 29 out 30 dev earnings are somewhere lower in the pay scale. But 1 out of 30 isn't an astronomically small number, so you could very well be one of those 300k TC people surrounded by others in that cohort and thinking the market is hot because professionals w/ that experience set are rare and in demand, and at the same time you could go on r/cscareerquestions and see a deluge of new grads complaining they sent out hundreds of resumes and heard nothing back.
The thing about pay that the job hoppers apparently don't take into account is that levels aren't static. Looking at my own network over the years, virtually everyone I know has been promoted or otherwise landed more senior roles, to varying degrees on both sides. You may also have noticed a significant increase of "staff engineers" in the past few years, whereas the role was basically unknown some 10 years ago. Many companies also have been quietly giving out retainer bonuses/raises to slow down attrition.
Since I started my career, I've had multiple significant compensation increases, some from raises, some from promos, one from a team move, and some from changing jobs. Increasing your experience/expertise over time can have a huge impact. Going from no-name companies to household names can have a huge impact. Relocating can have a huge impact. Negotiations (even internal ones) can have a huge impact. There isn't a one-glove-fits-all when it comes to an individual's opportunities for comp growth.
On the other hand, stagnation is very much real. There are plenty of people that do nothing in terms of career progressions, negotiations, etc and just wait for year-end bonuses to fall into their laps. It'd naive to be surprised these folks aren't keeping up pay-wise.
> The thing with countering averages with anecdotes is that neither really paints a holistic picture of the demand pyramid. Back of napkin calculations say around 4% of US developers work at the FAANGMULAs, meaning that some 29 out 30 dev earnings are somewhere lower in the pay scale.
Not only FAANGABCDEF, but "Staff+, with specialized skills, at FAANGABCDEF, in a small number of specific metro areas". If 1 software engineer can be found who makes $700K for every 29 software engineers at other companies/metros/levels who make $100K, Hacker News Commenters will tell you that "Software engineers make $700K". Important to point out there are a lot of other things in play that make it more complex.
I still think it’s an interesting data point though, which only showing average salaries doesn’t reveal. But yeah, it would be nice to see min/max/median in geography, and just get the more raw data.
It's more accurate to say that job-hopping has diminishing returns.
Get a single +39% increase is one thing.
Getting a +39% increase every single time you change jobs isn't going to happen. If that was possible, you could change jobs every year for a decade and be earning 27X what you started with. If you started at $100K, that would put you at $2.7 million year after 10 iterations.
That's why whenever someone insists that job hopping is an easy way to get huge pay increases, it's probably more a sign that they're early in their career and/or that they haven't been keeping up with compensation negotiations. For people at the sharp end of the compensation scale, job-hopping stops becoming an easy option for compensation increases.
I'd still be very cautious about dissuading people from job hopping. My advice is always "Keep interviewing for new positions at regular intervals until you're bordering on retirement."
A lot of people a lot of people are making less money than they could be due to being complacent about reaffirming their own value. America, and most of the modern world, runs a labour market and to properly value a good in a market you need real sales data - I think it's a solidly good idea to interview regularly, be prepared to job hop... but make a sane evaluation about the decision before committing to leaving or joining a particular job. Most employers over-advertise their business because... well... advertising works - so the grass might not be greener on the other side. But if you have an offer for 120k and are currently making 80k from an employer that values you you can discuss that with your employer to seek a salary equalization.
I agree with always interviewing. I had not been until recently and when I tested the market I found that my current compensation is less than half of the current market rate. I'm kicking myself for leaving basically half a retirement on the table for the last 6 years, and I'm disgruntled in my current position now to boot!
Yes, job hopping is incredibly lucrative and beneficial early in your career. You can work at companies for 12-18 months, jump to another company and get a 40-50% increase between your first 1-3 jobs. That is far faster than sticking around at a single company for even 5 years.
This decreases over your mid-career. You can still get good job bumps of 15% - 25% in your mid years by job hopping.
But later in your career you will get rewarded by loyalty and sticking around. Those massive salaries that everyone brags about generally (not always, but usually) come from internal promotion or from poaching. Those careers require you to be part of specialized teams with high-value business-specific knowledge. Those job roles are not given to engineers who job-hop. Simply put, in your late career, if you are only staying at companies for 12-18 months, then you are not getting deep enough into your specialty to be worth the insane salaries. So long term loyalty becomes much greater rewarded.
This is another reason why I recommend people stay away from FAANG early in your career and move to those jobs later. Early on, you should job hop through smaller companies where you aren't as enticed to stick around and you can more easily get promotions. Then settle down later in your career at the large companies who want and reward loyalty with insane compensation packages.
GP talked about 20+ years, without knowing, they could either be halfway through their career, or nearing the end. Also assuming they started their career immediately instead of at a later time in life.
11 years in the (relatively young) tech industry is quite the tenure at this point, _imo_.
My point was that the market is hot. Hot enough for an 11 year "veteran" to still get a 39% increase. Also want to point out I've "hopped" as many jobs in about as many years. Some people coming into the industry get taken advantage of compensation wise for a multitude of reasons just to get their foot in the door. I also strongly believe in skill stagnation at certain companies and hopping is the only way out.
Again, none of these arguments really matter as it comes down to individual experiences.
YMMV is right. There's a lot of factors here. It's almost meaningless to take averages without qualifying those against a fairly large number of conditions.
Total comp North of 300K for an IC sounds like science fiction to many folks which aren't in Silicon Valley, in certain fields, and in certain companies.
That's actually so much of why people feel underpaid. Pay varies incredibly widely. The job also varies quite widely, but when you're not in the job, IC sounds a lot like IC. You could be an IC with a total compensation of $80k (and actually getting $80k), you could be an IC with a TC of $300k (and actually getting $300k), and you could be an IC with a TC of $750k (and actually getting something like $200k-250k because your employer is private and your equity is all hypothetical)
If only 1 out of 10 startups “succeed” where success is defined by “the investors got their money back”. What are he chances for you as an employee getting any meaningful returns? The investors are well diversified, you aren’t as an employee.
Besides that, it takes the average startup 7-10 years to exit. As opposed to a public company where you can diversify your risk every three to six months depending on your vesting schedule.
It’s also incorrect to assume the expected value of the equity is zero. It’s much more useful to model it as E(x)=x*p(x), especially if you have some useful information on estimating p(x) that a person working at a startup might.
Every startup thinks their company is going to be successful. No matter what the person thinks who is working their, they don’t know when the investors will cut their losses or when the market isn’t hungry for money losing startups and the VCs have to put off going public…like now.
SV COL is high, but I don't think it is high enough to explain SV pay.
Looking at a few non-SV cities such as Seattle, Chicago, Nashville, Orlando, Sacramento, Austin, and Fresno it costs $14-18k/year more to rent a 1 bedroom apartment in the Bay Area than to rent in those other places.
The average monthly spending on food in SF is about $150/month more than the US average. That's under $2K/year.
California does have a high income tax. For someone moving from somewhere else to California you might have to pay them maybe 10% more to compensate for that.
Putting it all together, a job that pays around $100k/year in non-SV non-NY decent sized cities should need to pay if we are generous maybe around $140k/year due to higher COL in the Bay Area.
That Bay Area tech pay is way more than that suggests that something other than SV COL is the main factor.
I do and so does my whole team. I live in Seattle but a lot of our guys are in the south making six figure salaries. Not being paid the average salary seems to be fud I’ve heard from anti-remote people.
$200K with 15 YOE - I think that's pretty typical. I know people with even more experience who make less. Recruiters I talk to balk when I ask for $250K.
The article lists out the average software developer salary as $120k. I have no idea if this is true (it sounds low to me), but I don't hear people saying that $120k remote jobs don't exist...
People are saying $350k remote jobs don't exist. Which obviously is untrue (go work at Airbnb). But they're exceedingly rare.
I work for BigTech remotely. My comp may be about 10% lower than the equivalent position on the west coast according to the internal “anonymous” compensation sharing Slack channel.
There probably is a plateau, but I was surprised at how high it is. My first job was for $8/hour. Next was for $20/hour. The one after that was $32K/year. Then I went to college. Then it was $66K/year. Then I did a startup for nothing. Then it was $100K/year salary, but TC was about $160K/year. Got up to $300K over the course of that job. Then another startup for nothing. Then back for $630K/year, and it went up to about $900K/year with stock appreciation. Probably less now with the market crash, but still a lot more than I ever thought was possible as a plain old employee.
You do have to interview & negotiate well, and keep your skills sharp, and I'd bet that I'm about at the ceiling of what's possible as an IC. But now I've transitioned into management and all those startup exec positions are theoretically open. :-) There is always somebody making buttloads of money in the economy; if you want it, figure out who it is and how to make yourself useful to them.
To be fair - you can get to staff and make $500k+/yr. After that - it’s very nebulous as to how you get higher up the ladder and doesn’t involve leetcode as much as it does political prowess and the right connections.
So, I believe it is still possible but it is a very different skill set and does become difficult. Transitioning to management train sometimes is more efficient and then it’s a whole new skill set to progress there.
I will admit though - it does taper off and opportunities do become fewer. But, still, you’re making $500k+ by the time you’re on the really difficult track and that’s a pretty healthy amount. (Still might need a partner to comfortably afford a house in SV but that’s another discussion)
You can make 500K+ as a senior engineer with competing offers - and you can get senior with 4 YoE out of college (bachelor's in a top 3 program) these days. No need to wait for staff.
Sure but I'd rather not use people who graduated from Stanford, MIT, etc. as a baseline. These are inherently super exclusive and small communities. I'm saying that most people who didn't go to a top program but are at least grindy enough to do leetcode are capable of getting to $500K/yr as long as they are open to FAANG-etc.
I'd rather us not use Stanford as a baseline even if the crowd is numerous and abundant on HN and SV.
> Most devs will admit that they couldn't readily pass the interview at even their own company without many hours of studying and practicing algorithms.
I don't think, if asked to interview for it today, that I could land my current job. I'm also fairly certain I'm one of the top engineers on my team, and I do think we have a really good team of developers overall.
It makes me feel better that I'm not alone, in this regard, but it often just makes me question the interview process even further.
If you set the bar 2 std. div. above what you need, you are hiring qualified people with a p value of 5%. You're rejecting /most/ qualified people too.
Most people underestimate how random the process is. There are a few ways in:
- Be 2 std. div above the qualifications
- Apply to many places and pick the one where you're lucky
- Give another, less noisy source of signal than resume + interview (e.g. networking into a company, consulting, references, major open source contributions, etc.)
I wouldn't get my current job if I randomly applied right now. I happened to do well on an interview process which wasn't well-aligned to my background. That was a fluke. I was probably the most-qualified candidate, but if I didn't have a lucky day, I don't think an interview would have shown that.
Last hiring cycle, I was also rejected several places where I am pretty sure I was better than the candidate who was hired too. If you make this about you, you'll feel horrible. If you understand the huge random factor, you'll do much better.
(Disclaimer: I have specialized skills, so my interview process isn't a typical SWE interview process).
Another data point - I'm an EM. I still get all the usual SWE interview questions (system design, coding which is often leetcode, behavioral/cultural, etc), plus additional loaded ones about how I've handled various situations in the past (which is always fun because sometimes they're about things I've never had to handle because the question assumes something that shouldn't be true, i.e., "describe a time you had to handle an employee who was angry with you", well, that's never happened; well, why is the employee angry with me, specifically, what happened to all the time spent building trust so they could calmly come to me with issues that they had, all the times they saw me advocating for them so they know that a disappointing and unexpected outcome is due to factors I'm not in control of, why had I dropped the ball in being responsive to their earlier voiced concerns, etc etc). This latter usually is asked by the hiring manager (usually a director)
My last three jobs, at least, I landed because I clicked well with my immediate hiring manager in this particular interview. That was it. I did no worse, and no better, than I did elsewhere on anything maybe a bit more objective (system design is weird, but coding, at least, you can say "does it work/is it efficient or not").
Which sounds bad, but it means my expectation of management aligned with theirs. It was a complete crapshoot in every case, with a lotta rejection along the way, before I found that, but each time it led to good outcomes.
Interestingly, there was also one company where I know I was a strong contender, did decently with the HM, but was beaten out by another candidate. I know because the recruiter reached out to tell me how close it was, and that was further validated when I later applied to a role, spoke with a different recruiter, who said "yeah, I saw the feedback and was like 'why the heck didn't we hire this person?!'". But that second application went nowhere; the HM gave the initial phone interview and didn't want to continue.
It's all random (or at least, so many variables that can't be measured or controlled for as to be indistinguishable)
Now, just for the avoidance of confusion, the standard deviation in this context is the standard deviation of the measurement error, not the standard deviation of the skill level of the applicants.
For example, if you simplistically assume people can be graded on a 1d scale from 0 to 10, and you think a certain job needs someone with a skill level of 7.5, and your interviewing process has an uncertainty of 1, then you need to set the bar at 9.5. From the outside, people would wonder why you are trying to hire Einsteins for a job to write dashboards.
You are not trying to hire Einsteins, it's just that your interviewing process sucks.
If you manage to reduce that estimation uncertainty from 1 to 0.25, then you need to set the bar at 8. All of a sudden your pool of reasonable applicants increases tremendously.
My conclusion (I'm making it up as I go, so feel more than free to discard it - I may discard it tomorrow, who knows?) is that there's tremendous value for companies to improve their interviewing process.
But there's a second conclusion: as an interviewee, you want to assist the interviewer in reducing their estimate uncertainty. Because that uncertainty is not a fixed number, it's candidate-dependent. A company will prefer to hire a candidate that is an 7 plus or minus 0.5 than an 8 plus or minus 2. All of a sudden you will beat much stronger candidates.
How can you do that? I'm not sure, if I knew I'd probably be 10 times richer.
But I can offer some guesses. If you have publications, a GitHub account with nice projects, maybe some youtube videos where you explain some concepts quite well. Also, anytime someone can vouch for you, someone that the potential employer trusts, that reduces their uncertainty a lot.
I hated job-hunting before I did hiring and managed people. I felt rejected each time I didn't get an offer.
Once I sat on the other side of the table, and saw how a /majority/ of qualified candidates were turned down, I didn't feel so bad when I was rejected. The key thing you *really, really, really* want to avoid is a bad hire. I've seen candidates rejected for the oddest reasons. It was definitely the right choice to do so.
In the kinds of companies I've worked for, if you're at all not sure about a candidate, the decision should be a no-hire.
I don't feel rejected any more. A good mental model is:
If you're qualified, you role a die. If the die comes up a 6, you're hired. If you role 1-5, you're not hired.
(The number of sides on the day varies by industry; I think 6-sided is about right for my industry in the current job market)
The money we make pales in comparison with the size of our contributions to the company. Especially so if you are in a value-adding position and not something like internal tooling. Management and executives are DEFINITELY underpaying us relative to what we bring to the table for them.
Maybe that is one of the reason headcounts have ballooned and complexity has increased so much -- an attempt to minimize individual impact.
(edit- NOT knocking internal tooling, it's just that it is traditionally considered a cost center)
> Especially so if you are in a value-adding position and not something like internal tooling.
Why the knock on internal tooling? If internal tooling helps a value-add position go 10% faster, that's worth a lot. And most likely it isn't just one position, it's many.
They didn't say internal doesn't add any value at all. They said it's more obviously justifiable with the product people, and it is. Given that total salaries paid per year is almost always small in proportion to revenue at a successful company, tooling cannot add anywhere near as much to the bottom line, even at the extreme where it reduced time to market to 5 seconds.
> even at the extreme where it reduced time to market to 5 seconds.
If this is your impression of internal tooling, then your internal tooling team is terrible.
The places I've worked with good internal tooling teams provided a dramatic decrease in time to delivery. Automated failovers? Don't have to write it, it's in internal tooling. Automatically rebalancing traffic across datacenters? Already in the framework. Service discovery? You already know.
I could go down the list, but with a good internal tooling team, the only thing I've ever had to worry about was my app's business purpose. I don't have to muck with configuring monitoring, or load balancers, or getting authentication to talk to another app, or how to get a database, or etc.
The difference in time to delivery is dramatic.
Places I've worked without internal tooling take like 2 weeks just to get infra for a static HTML site.
The places I've worked with bad internal tooling take 3 weeks to do the same thing, because you'll spend a week arguing about whether the tooling works.
The places I've worked with good internal tooling take like 15 minutes to do it. I spend longer reviewing an MR than I do deploying infra.
Tooling is a huge part of the reason companies throw fistfuls of money at clouds. They could get compute on-demand cheaper from Leaseweb or OVH or hundreds of other companies, but they don't. They pay the premium for AWS or Azure or GCP, and it's because of the tooling.
It's not a knock - if you're not aligned with revenue, you're valued less.
This historically was the some for technology in general. When grandpa was the chief of data processing in the 1980s for some insurance company, he wasn't making FANG salaries. But the IBM dudes were.
Yeah, but if you tweak an ad-placement algorithm or a UI that results in Google selling 0.1% more ads, you've instantly produced more revenue than you will make in salary your entire life.
No one's making a value judgement. The direct numbers just aren't comparable.
> The money we make pales in comparison with the size of our contributions to the company.
That's unfortunately not how markets work. If you create 10M of value every year, and are only paid 250K for doing it, it's because there is someone else out there who is willing to do it for the same. (Yes, there are asymmetries in information and power, but broadly, tech salaries are market-driven)
The same thing that is causing reshoring: rising developing world wages, culture, language barriers, etc. If you have the necessary support in government, labor law. The defeatists will always argue against improvement of the status quo; they are not to be indulged, as their goal is not improvement. Only 30% of an org's workers need to vote for the NLRB to hold an election [1], and then you only need a simple majority to unionize.
Are we arguing against the attempt when a quick glance at the financials for FAANG and Co shows ample profit margins available for worker compensation?
Yet every major tech company has large presence overseas already. There is no language barrier when your entire team that’s working on a product speaks the same language.
Also it’s not like tech today is mostly people whose first language is English - no judgements
It appears to be a frequent occurrence for proclamations based on strongly held beliefs to be made that something is impossible, until it isn't. The balance of labor and capital is inevitably in tension perpetually, and I am simply arguing for more balance. Success is not assured, by any means, but that is no reason to accept the status quo in silence. There is always nuance, and I think it's unhelpful in the discussion to say "it won't work because of x." But that's not a conversation. The conversation is, "here are challenges with the current economic configuration, and here are some levers that could be pulled to make changes where there is a more equitable outcome for those who are getting the short end of the stick."
There is a wide gap between capital sucking up all of the productivity with workers being slave labor and Marxists seizing the means of production and burning it all down; neither is being argued for, but somewhere solidly in the middle of those extremes. Capital makes some sort of return, value is created, workers are treated fairly, receive reasonable compensation for the value they're creating, and have a seat at the table of the org, and everyone goes home happy. If someone is more of an Ayn Rand/Libertarian/individual exceptionalism sort of a person, this view is likely unpalatable, and there is no common ground to meet at.
Going overseas also carries risk. It could be something as irritating as just cultural or language friction or as bad as a civil disturbance or war breaking out.
Never mind just the quality of workers available for the price you have set as the threshold.
Hah, no. The problem is whenever someone talks about pushing back, you can find at least one guy saying "ok then I'll do the job" and 3 people saying "I don't care, my 250k is super comfy".
Like others point out, it's incredible the US hasn't mass outsourced their work to Europe yet.
If you're able individually as a sole contributor to create 10M of value, sure, off you go, quit you job to go solo and generate all that sweet revenue for yourself.
It turns out someone identifying a market opportunity, getting funding, renting office space, hiring HR, infrastructure, service and support personnel, product designers, QA, sales, etc, etc all costs a surprising amount of money and effort that for some reason all those people feel they deserve to be paid for..
This is a deflection: the original comment didn't say that there was no value in other parts of the business. It said that the price/value ratio was wrong.
The other comment didn't give for why a 10m:250k ratio is wrong either though. The argument that the 10m is only enabled by the rest of the company is a reason why it isn't i 1:1. What should the ratio be? Why would it necessarily approach 1:1?
But you can't unlock your value without those other parts of the business. Again, as an employee you aren't paid the value of your work, you're paid your replacement cost.
I might join a union of all software engineers in order to help junior engineers keep from getting completely burned out or horribly exploited, but I wouldn't join a union of elite FAANG engineers. I'm pretty sure the $250-$500k we can command is the most we can reasonably expect companies to be able to pay, since there's a ton of competition among them to hire us already
Otherwise, someone would've collected some VC money, hired the best of the best code monkeys for $1M+ each, and taken over some tech niche by now
And the courts put a stop to it. There were several cases against various companies over the years, but there don’t seem to be any since 2014. Did engineers salaries suddenly jump as a result 6 years ago? Is there any evidence of significant collusion since?
Steve and Larry share their employees salaries with each other to avoid a bidding war over top talent.
Lucy finds out and orders Steve and Larry to stop doing that.
Now Steve shares salary data with Teddy and Teddy tells Steve what the market average is.
Larry also shares salary data with Teddy and also learns what the market average is.
No collusion! But the effect is the same. That's why they earn the big bucks.
Knowing the price of a thing is how markets work. If I want to buy tomatoes and a friend tells me a shop down the road has them on special offer, that's not collusion.We're not artificially suppressing the price of tomatoes. Anyway companies already know this by just offering a given salary and seeing if they get decent applicants. If they're not getting enough good applicant, they just raise the offer if they think it's appropriate. Having said that the habit of companies suppressing info about salaries between employees should be fought.
>If I want to buy tomatoes and a friend tells me a shop down the road has them on special offer, that's not collusion.We're not artificially suppressing the price of tomatoes.
You mixed up the analogy though. Rather it should be that tomato seller 1 talks to tomato seller 2 down the road and they agree to never charge less than x$ for 1 pound of tomatoes thus removing market forces and creating an artificial floor for tomato prices
You aren't really naive enough to think that just because a court ordered a corporation to stop doing something that they always stop doing that thing? Not only that but the order was only against some companies in SV which these days aren't even the highest paying or most desirable to work for.
That's why companies try and sell you their brand and/or their ecosystem as well as their product.
Arguably one of the best at doing this is Apple. A similar product exists and has cheaper options (various Android flavors) but people prefer their green text bubbles and status symbol brand effect.
It often works like that for people in sales or other positions that puts them in the flow of money. The get paid some percentage and the more deals they are involved in, the more they are paid.
What? Internal developer productivity tooling is one of the most important investments a company can make, especially at the scale phase. B tier companies give that work to juniors. A tier companies give that work to the most senior people they can find to do it.
This strongly depends on the company. In high growth industries this is absolutely true, in low-growth industries/companies its somewhat debatable. I suspect that this is why software salaries were tightly correlated with tech growth for the last 3 decades. The 90s, and 2010s were great times to be a software engineer - but average salaries were more than cut in half during the oughts.
If you're doing tech stuff to replace some kind of human, manual labor then I think this applies regardless of your sector or growth rating. Tech enables companies to do more with less -- at lesat, that's the dream -- and I suspect that if the economics aren't favorable for tech they'd rather have cheap expendable labor.
We are the practitioners realizing that dream for our masters.
> Management and executives are DEFINITELY underpaying us relative to what we bring to the table for them.
This is true of every industry going on decades of increasing productivity and stagnating pay. What's new here besides greater awareness and labor churn? Will there be an actual change going forward? Of course the demographics favor workers now, but the laws and politics often don't. Immigration and outsourcing and automation can change that power dynamic very quickly. What're you going to do? Form a union? Start a company? Vote? Quit and work elsewhere? Interesting times we live in.
> Maybe that is one of the reason headcounts have ballooned and complexity has increased so much -- an attempt to minimize individual impact.
All of my friends and aquaintinces in nursing, tax, retail, and trucking have a few people who are trying to break into programming because of the benefits and pay. Outsourcing, scope creep, and automation exist and are expanding in my industry as well. How long until this drags down programmers as well?
> What're you going to do? Form a union? Start a company? Vote? Quit and work elsewhere?
Quit and work for myself. Personally I'm sick of the capped upside with working in tech (among myriad other issues) and the kinda shit you have to pull to raise it.
well we all like to think we're the sole reason "the company" makes any money but there's a lot more to the equation than just the person typing out the code. Without the code there would be no value but the code is meaningless without all the other expertise required to turn it into bank deposits. The technical part is maybe 10% (if not lower) of the overall effort to get a paycheck in your hands.
Nowhere does my post indicate that I think I'm the "sole reason" the company makes any money. We are all just cogs in the machine. But, as with anyone who makes the product, we are a huge part of the reason the company is in business and it would be nice if management would stop looking down at us. Maybe they should be looking up to us instead. (And if you disagree, read into the tone of the article.... "techies"??? Ideas for paying us less?)
Not to discount other departments like marketing or operations -- they are important too. But they don't make the product, they are more numerous, and more interchangeable.
Not sure how important that is, though. Often the product gets sold despite of the product, thanks to marketing, operations, logistics, sales, support, legal and management (product/project).
Genuinely curious but do you consider product/project management to also 'be making the product'?
If their project is said product, then yes; because they are, in a way, architecting the final deliverable. And that recognition goes up the chain, in an increasingly diluted form, until it reaches the top.
> The money we make pales in comparison with the size of our contributions to the company.
That’s a tautology though. They wouldn’t hire someone to break even and they wouldn’t hire someone to make a little more money since there’s work and risk in hiring.
It's really not. Start-ups routinely fail to generate value and engineers get hired by such companies all the time. All that is needed is the belief it's possible the value will be higher. The reality doesn't need to match the belief.
But then the engineers at the successful company can't capture a significant amount of the value that company makes, because the rest of it has to go back to investors to make up for all the other companies they funded that 'overpaid' engineers and failed.
> The money we make pales in comparison with the size of our contributions to the company. Especially so if you are in a value-adding position and not something like internal tooling. Management and executives are DEFINITELY underpaying us relative to what we bring to the table for them
I mean, I’ve seen people working in retail make this same point. And I’m not saying either of you are invalid in your claim, thats just how work is, it seems
I work as a billable consultant. Therefore I know to the dollar the revenue I bring in in a given year.
However, that revenue goes to support accountants, lawyers, marketing, internal tools, HR, healthcare, employer side taxes travel that’s not related to a customer, infrastructure costs, etc.
I am not saying in a perfect world I shouldn’t be making more and honestly, I probably could. But, I like having a large corporation to take care of all of the stuff I mentioned above.
I have a colleague who left and is essentially doing the same work as I do, but is making about 5x more due to getting a cut of the revenue, but has a low base compensation.
Due to the nature of my employment and some benefits, it doesn't make sense to leave right now. But you can bet that I will be out the door the minute the clock ticks to the appropriate date.
I can't speak for the parent commenter, but I can say that in my case, I just found out that my blood pressure is through the roof because of bad exercise/snacking habits during the lockdown. If I die while I'm working for BigCo, my wife and kid will get something like $2.5M from life insurance and immediately-vested RSUs
I'm very confident that I could buy a nice house in a low cost of living area, throw together a SaaS that pulls in a few grand a month, and then work on a more ambitious business while living comfortably. BUT if that ticking time bomb in my chest goes off while I'm doing that, my family will be relatively fucked. (~$250k life insurance payout plus our ~$500k net worth, so the wife will suddenly have to become a working mother with out of date skills in a relatively crappy locale..)
So in my case, it's worth sticking around at BigCo for another year or two and getting in shape while I'm still under the benevolent gaze of Master Faang
EDIT: Dang, I've been a fool.. looks like it's only about $100 a month for $1M in life insurance actually, haha. Maybe I should sneak out of here sooner rather than later
My tip on life insurance: don't buy it from your existing auto/home insurance company. In my recent experience it's far cheaper from a dedicated life insurance company. I also got a discount going through Costco.
How far down the stack does this mentality go? My brother does fiber construction and repair for a major telco. I bet there's been a trillion dollars of economic activity conducted over glass he's put into place, but he just gets paid an hourly wage plus overtime.
Depending on the industry, this can be so true that at a certain point you start to wonder why VCs are even tolerant of companies with zero technical founders in 2022 given the obvious risks of this situation.
I don't feel underpaid, but I definitely feel like I've lost tons of ground in the last 2 years.
The floor has risen big time. Entry level jobs are paying up to 60k these days, whereas they were closer to 30k a few years back. Good for them, seriously. But watching the floor rise closer to you is never a great feeling.
To be clear, I do quite a bit better than that... I'm not complaining. But using 120k as an example...a person went from making 4x the typical full time salary to 2x the typical full time salary in a very short period.
> To be clear, I do quite a bit better than that... I'm not complaining. But using 120k as an example...a person went from making 4x the typical full time salary to 2x the typical full time salary in a very short period.
This is what I will never understand about most established tech people, they see all the widespread misery and poverty in SV and they still have the capacity to feel sorry for themselves for not making X times more than 'that other guy.'
It's always about what they don't have rather than see that they live in an insulated bubble existence that they could never really navigate if it weren't for that wealth disparity because they have such a narrow limited set of skills. aWant an experiment turn off the wifi, see how quickly these people lose their minds.
I'm not mad at you for it, for all I know you are self-taught guy that beat out a bunch Stanford grads by grinding since HS and making it on your own, but it's this never-ending need to beat that guy.
Its like that scene in American Psycho with those business cards, where for some odd reason people seem to have a need to over-embellish their existence's value with triviality that re-enforces the 'yeah, but I have more than that guy' narrative which is completely lost on me.
I hate to tell you but you will never have more than a Bezos or a Musk, either. Not to mention the Nation-state level despots of the World who don't have their net-worth listed on the Forbes 500.
Just enjoy what you have, while you have it, because I can assure those very same tech companies are pouring tons of money to render you obsolete as soon as possible.
People have expectations set by parents and society. Things like owning a house are socially expected and difficult in SV. It’s fairly natural to feel “sorry for yourself” when making good money if that good money either isn’t leading to a mortgage and a home or if that good money results in substantial challenges with said home and said mortgage.
Just because someone is more well off doesn’t mean they don’t have problems. It’s not enough to fix affordable housing and say job done if the housing market is completely broken solving the problem requires fixing housing for everyone including the well off.
The house trance in SV is very disturbing to me. I saw a lot- and I mean a lot of people move in with their families from the midwest to work at FAAMG, and then bought a house in sunnyvale which they absolutely HATE. From the high prices to the schools filled with grinds, they just want to move back to the midwest and live near the rest of their families in a place where land is cheap and people don't try to compete so hard in high school. Perpetual misery.
> From the high prices to the schools filled with grinds
Interesting to see the word "grind" word making a comeback. It's first manifestation was "greasy grind", used as a pejorative for academically hard working immigrant kids - usually Jewish - before WW2.
Before we start applying labels like that to people again, perhaps it would be better to look at the incentive structures that cause people to be so driven academically, even if to a fault.
For example, many of those people might not have a place like the Midwest to move back to, or even if they did, it would be even more hyper competitive (like much of Asia).
> they just want to move back to the midwest and live near the rest of their families in a place where land is cheap and people don't try to compete so hard in high school.
I sympathize with this as I think the SV style academic rat race damages kids' curiosity in the name of status, but the Midwest didn't sit still this whole time.
You will find such hyper competitive academic systems these days in many parts of the Midwest too, especially in the "nice" suburbs that people want to move to with cheaper land, big houses, "good" schools, and probably a short driving distance from a Whole Foods (or similarly posh supermarket).
Your argument I visualize as the floor falling from the room, the lowest paid have fallen, tech workers are “safe for now”
but they are concerned and are
trying to move to safer ground, and Bezos is in a spaceship above it all.
People who think techies are well paid probably haven’t tried raising a family yet.
> People who think techies are well paid probably haven’t tried raising a family yet.
I started my own fintech startup by bootstrapping and working 90+ hours a week and I managed to survive in Boulder where/when the average house price was over 1 million USD, you will get no sympathy from me.
My investments are the only thing that saved me, and I didn't have health benefits that entire time. I treaded water and almost drowned many times most of it's existence while disrupting an entire Industry in the process and eventually got head hunted by a mega corp.
When will you realize that are not one of the tech oligarchs? What part of that don't you get yet? You're an expendable part of the equation.
You guys have been coddled so much by these corps that insulate you from reality I almost wonder if you can see the trees from the forest and what your role is in all of this?
We are making the same point. I think few people are under any illusions, the “comparing total
compensation” movement probably came out of people wanting to get a
bit more out of the ogilarchs for that comfortable retirement but not thinking they are one themselves (numerically there can only be so many)
I get that and appreciate you calling it out, I'm not blind to how whiny it sounds. FWIW, I don't live in SV or make an SV salary.
I've always tried to stay at 2x the prevailing local wage, so that my wife can stay home and take care of the house and kid with no worry. That's really my only motivation. When you're doing more than 2x, you feel ahead of the curve. When 2x comes at you fast, you start to sweat a little.
But it's not lost on me that I'm lucky to be able to have such an existence.
> This is what I will never understand about most established tech people, they see all the widespread misery and poverty in SV and they still have the capacity to feel sorry for themselves for not making X times more than 'that other guy.
I don't understand this opinion. Why are the two feelings in conflict? I can be concerned for the people around me AND be concerned that I'm making less than X times more than the average.
I really don't think there's anything good about equality if it means a programmer is making the same as the unqualified people - to me that signals a completely broken world that can't function. This kind of equality has been tried and failed spectacularly, and I live in a place that still feels the catastrophe today, 30 years post-facto, and it will be felt for the next 30 years at least, too.
Overall, equality seems to me to be a misguided goal. We want people to have comfortable, healthy lives - I don't see how that relates to financial equality at all. Life needs to get cheaper so even the poor people can afford it - making everyone an equal millionaire will never work, that would just cause the prices to rise so much nobody could afford it and the meme of "equal misery" would become a reality once again. Let's talk about financial equality again once machines can do all the work.
> Why are the two feelings in conflict? I can be concerned for the people around me AND be concerned that I'm making less than X times more than the average.
Because as a tech worker your salary is likely already well above the level that it would need to fall in order for us to achieve meaningful level of wealth equality (not complete equality, but equal-ish)
> making everyone an equal millionaire will never work
Yes, exactly. But could work is having a scale of something like lower middle class to upper middle class incomes and getting rid of millionaires entirely (or making them as rare as billionaires are today). If we want to bring people out of poverty that money has to come from somewhere, and if you're making 6 figures some of it probably needs to come from you.
> Because as a tech worker your salary is likely already well above the level that it would need to fall in order for us to achieve meaningful level of wealth equality (not complete equality, but equal-ish)
Why would you want that??? I think it's awesome the common Joe can learn programming on the internet and earn huge bucks. Why cancel that of all things?
And then, I don't think your suggestion for equality would work. If my work was significantly taxed above $100K, I'd stop earning more at that point because work is very stressful to me and I'm not going to do it if I don't get the benefit of it; and I'd most definitely not go into any sort of risk (like starting a startup) in that world.
If I can't even bang on a keyboard without someone feeling entitled to get the majority of my product, well then I'm not doing it, sorry. Everybody would lose - I'd pay much less taxes overall, and innovation from my side would grind to halt.
(now I earn slightly less than $100k, but also live and work in Europe).
> If my work was significantly taxed above $100K, I'd stop earning more at that point because work is very stressful to me and I'm not going to do it if I don't get the benefit (now I earn slightly less than $100k, but also live and work in Europe). Everybody would lose - I'd pay less taxes overall.
Perfect. You get a less stressful life. And you working less creates job opportunities for others.
Other people win just by you (and other high earners) earning less. They don't have to earn more. Their money is worth more if there is less total money in circulation.
No, I don't get a less stressful life, I'd get a much more stressful one. One, maybe two years I earn a lot, and then 2-5 years next to nothing. I must plan my life according to the needs of my mental health, not fiscal calendars of some social engineers who can't understand that one size doesn't fit all and can seriously hurt some people (yeah, even those who earn a lot some years are still just humans, and sometimes sleep on the street another year too).
And it's a life where I am forbidden to do useful things that others want me to do and I am willing and able (which is not always, or often) - just because someone said "you did enough in this arbitrary period of time, give us your money or don't do it at all".
Don't even start about me owing the society, because in my view the society owes me a lot for the pain it caused me, gave me nothing of value, and tries very hard to keep me from obtaining the little I have. And the bill keeps growing. The idea that this should not only prevail but continue to worsen gives me chills.
Sorry - nothing personal, but I really, truly hate every bit of your idea of the world. From the beginning where people "should earn less so we are equal" to the end where it's "perfect that engineers work less" and the bit where you just assume I'd lead a less stressful life, even though you know nothing about me - typical of people of your opinions.
> And it's a life where I am forbidden to do useful things that others want me to do and I am willing and able (which is not always, or often) - just because someone said "you did enough in this arbitrary period of time, give us your money or don't do it at all".
No you're not. You're free to do whatever you like. You just won't receive as much money in return as you would otherwise have done.
> From the beginning where people "should earn less so we are equal" to the end where it's "perfect that engineers work less"
To be clear, to the extent that there is a difference, I think that people with high earnings should be taxed more not that their nominal income should be lowered or restricted. And I think that it would be good if people had the freedom to choose to work less while still earning enough to comfortably live on. If you want to continue working as much as you currently do then all power to you. It was you who said further up the thread that would choose to work less.
It wouldn't force you to work less. If you think earning less would have a serious impact on your mental health, then spare a thought for those who already earn dramatically less than you, and still would (although not by quite so much) after such a change was implemented.
I can't spare a thought for them when my own existence is endangered. I'm thinking about them a lot now, and donate when I can, but that would have to end.
The problem here is being forced to work less at a time when I'm able to work more. It's not fair to make me earn less just because I wasn't able to spread out my work across the calendar because of my mental health issues.
I don't see where your ability to spread out work is affected at all. Taxes are usually done annually, so how spread or concentrated work is over a year wouldn't affect the level of taxation. And it's already the case that this can't (easily - I suspect there are ways) be spread over multiple years. That wouldn't be a change.
I would also point out that those with lower salaries also suffer from mental health issues. I see no reason why yours specifically should take precedence.
Yes indeed, taxes are annual - and I told you clearly that I have years (usually less than one) when I can work well followed by years (usually multiple) when I can't work at all. E.g. in 2017 I was able to work 7 months and then nothing 2 years, then 3 months and nothing for a year, etc. I'd have passed your threshold in 2017 (if we adjusted by purchasing power) but thankfully there was none and so I was just barely able to make enough money to stay off the street during the two following years (but I wasn't that lucky the next period).
I shouldn't take any precedence whatsoever, but others shouldn't have any precedence over me. It's bad enough that I'm unable to get any assistance because "I'm rich enough" - actually I'm in serious debt.
The most draconian collector I had was the tax agency, which assigned me interest larger than the worst loan shark you could find anywhere in the world; they don't care that a court locked me up in a hospital and disabled my bank accounts, I got 0.3%/day (yes, per day) "to motivate payment ASAP". I guess I should've just unstrapped myself from the bed, get a gun, rob the bank of my own money, and pay? Other creditors like banks were just OK to chill a little until I'm back, even the gangster drug dealer guy I had to borrow from when banks wouldn't see me treated me with much more respect than the state.
That's what you want more of? GTFO with that, you will just fuck up poor people's lives even more - the stories in the hospital were very similar to mine, and those other people don't have the big annual wage I can get as a programmer. If you think the state will try to help poor people, tell me why is it not helping at least a little now? I'm from a poor family, where was the state when I wasn't a programmer yet? Let me tell you, it was working hard to fuck us up even more. And now after my hard work overcoming my own problems, in spite of everything the state has thrown at me, you're saying it should get even more of my work?
It sounds like you make a very high income in some periods of your life, but that you are unable to work and struggle to make ends meet at other times. What I would like is that make a little less in the good times, but that you have much better support in the bad times. Yes, the state would get more of your work when you can work, but in return you'd get support from the output of others' work when you can't.
That would include things like free health care, housing, and relief from tax burdens. Why doesn't the state help you? I'd argue that that's a lot because of lack of funding due to people taking your attitude that the state shouldn't take "your" money. I feel like you are someone who would benefit greatly from income redistribution that was well-implemented.
> I feel like you are someone who would benefit greatly from income redistribution that was well-implemented.
In theory, but I also can't afford illusions, if it doesn't work out it will be way too destructive to me - and I can't see any reason whatsoever why it should work.
I disagree the problems are because of a lack of funding. Any western state has loads of money they could be using to help people. I'd be happy to add more if it just wasn't enough, but we're very far away from states making a good use of what they get now.
As it stands, I don't think any increased income from taxation would translate into more support for poor people or people like me. Not a single cent. I expect the opposite - the states would pour the money into enforcement, and people would get hurt more.
> Sorry - nothing personal, but I really, truly hate every bit of your idea of the world.
Just so it's clear, I don't agree with what he said. I stand by my comments, but I don't agree that we should coax any of what the poster has said either.
I believe in equality of opportunity, not outcome. So, I'm absolutely fine with paying higher taxes if that money gets ear-marked for single payer healthcare, education, infrastructure, etc. See the nordics for an example.
I don't believe doing that would require making millionaires as rare as billionaires are today. The nordic countries have plenty of millionaires and billionaires, yet everyone has most of their basic needs taken care of and most everyone has the opportunity to make something of themselves.
Something I suspect we both believe in is that allocation of resources ought to be roughly proportional to value provided.
Where I suspect we differ is that I don’t believe that market value of services is an especially accurate measure of true value provided. And in particular I think it would be pretty much impossible for someone to provide enough value to society (relative to the average person with a normal job - many of which IMO provide huge value to society for little compensation) to warrant billionaire level wealth. I therefore think we ought to correct this discrepancy.
> This is what I will never understand about most established tech people, they see all the widespread misery and poverty in SV and they still have the capacity to feel sorry for themselves for not making X times more than 'that other guy.'
As opposed to who exactly? The system is based on greed and maximizing profits/salaries/status/whatever. Are doctors/lawyers/financial people not behaving this way? Some doctors earn around one million USD a year in the U.S, that's money that makes insurance more expensive and unaffordable for everyone.
> Some doctors earn around one million USD a year in the U.S, that's money that makes insurance more expensive and unaffordable for everyone.
You're seriously not comparing yourself to physicians in level of importance in Society, are you?!
As I said, after COVID we got a real wake up call of who mattered, and Nurses and Physicians deserve every penny that they get, its the system that is broken: see Stanford nurse strike.
Moreover, it's actually not the physician salaries that keep things unaffordable, but the over-pricing of every bloated expense, procedure, medication, drug etc... that keeps it at those levels and simply because they can.
Believe me, I just did 2 MRIs that I put off for several years because of COVID, physicians who I met before COVID who were doing well, and are probably better of financially now then before have been run-down significantly and they all had the same tells of using amphetamines/cocaine that I saw in my undergrad as pre-med students and bio students did the same courses.
The real blame is at the administrative level, and accounting not the physician or nurse level. My MRI required that 2 specialists sign off on it before the Insurance approved it and everyone took a cut, such that by the time I got my MRI it was actually less (in the 1000s) than the 2 specialist visits to get that one MRI. I did this once again for my 2nd one and the same thing.
I also got an EMG in 2019 and had to go for another one, it didn't matter that I had significant atrophy and weakness, not that I was approved for one before when it wasn't as bad as it is now. I had to go through the same process and everyone got their cut.
So, again... no you're embellishing YOUR value if you think you are comparing apples to apples, its simply not the same thing at all.
And none of you were working double shifts in an ER or Urgent care when COVID was at it's peak, or the large amount of attempted or successful suicides as lockdown, so really, get some perspective. You work on computeres, and many of you boast about really only doing 4 hours of work a day, the fact that you're posts counts are as high and still complaining about salary is testament of this very facade.
And no, I don't agree, the 'system' was not based on greed, you chose to make it about greed because so many other have as well and is another matter entirely, because most physicians and some nurses are drowning in debt by the time they get to earning a decent salary. I agree they should optimize for that given those circumstances and many have after COVID and those who haven't are jumping ship or leaving the Industry all together, which is why we should pay them whatever they deserve/ask for (within reason, of course) to retain them.
People aren't even aware of how many nurses are simply over the job entirely and will be quitting in masse.
> As I said, after COVID we got a real wake up call of who mattered, and Nurses and Physicians deserve every penny that they get
I'm not saying they don't deserve to get paid well but some doctors earn 10-15 times as much as the nurses they work with, so its not all about "value to society", it's simple market forces. I used the word greed which is very negative but we can simply call it market forces.
Also why do you think family doctors earn half as much as plastic surgeons for instance? Are plastic surgeons bringing 2X the value? If anything family doctors are first in line and responsible for hundreds of lives each year.
For the record I think both nurses and doctors oughta be paid very well, possibly much more than me, as do construction workers and kindergarten teachers. And no, I don't think a doctor should earn one million yearly but that's just my opinion. But anyway the system simply doesn't work like that. The market doesn't care much about who works the hardest or who contributes the most to society.
Few American dr's make $1M. Most of those that make many multiples more than nurses are specialists, and they are still much less than $1M. I do know ones that do better... Because they are involved in effectively second jobs around biotech startups, maybe clinical trials, vs the actual patient care. I've been curious on celebrity patients (who seem to be more about donations/endowments.) You can get $700k by being the only specialist in the middle of nowhere and working nonstop, but most prefer not to.
Instead, someone doing regular family medicine is more like $150-250k... Less than a US programmer with significantly less training & responsibilities. You don't get big RSU refreshers for saving lives.
But the interesting thing is comparing over time. Specialists not only likely took loans and no salary for the stressful years of college, med school, and then residency, but then did another 2-4 years of fellowship, and really good ones, another 4-7 years of underpaid phd. They are making up for 1-2 decades of being underpaid and even debt, beyond the daily stress. More fun? As all the pay comes deferred in big batches, it is also taxed at ~double the rate of everyone else. Triple hit for savings: they don't get the compounding investment bump of people who started to get paid 1-2 decades sooner. Insurance is high too - disability, liability, etc. that regular people don't pay.
After another decade or two it balances out and starts being more than others, and then they retire.
I am not really comparing whose situation is better but since you brought it up: Doctors in general earn more but work much much harder. They also have much much better job security, it is unheard of for a doctor to be considered obsolete at his 50s.
I wouldn't want the life of a doctor personally but financially it is the better field imo, on average.
Maybe put differently: You can be 9-5 FAANG type and retire as early as 40. In contrast, due to the delayed paycheck for specialists... they're looking at another 10 years after that. Likewise, at FAANG, you're living large as a 20-something, while specialists are running on debt & tiny stipends while going through crazy stress: you don't get to enjoy that paycheck while in your prime. There are always outliers, but with 500K+ well-paid folks just in FAANG, and probably 1M+ when other high paying are included, there's a reason even medical folks are getting squeezed out of the bay area.
> You're seriously not comparing yourself to physicians in level of importance in Society, are you?!
Oh please.
One of the fun things about MDs and dentists is that it's one of the only professions where the supply of those people is strictly controlled by the people who are in danger of being replaced. There are VASTLY more people qualified of being excellent cardiologists and neurologists than there are spots to be trained in those specialties. The exclusivity of the practicing physicians on the field is what limits supply and increases demand.
what a weird statement. Would doctors be as valuable without modern tech or medicine? I don't view any group as some sort of elite class, gracing the rest of us with their existence.
> what a weird statement. Would doctors be as valuable without modern tech or medicine? I don't view any group as some sort of elite class, gracing the rest of us with their existence.
False equivalence, and this is akin to one asking if you would be where you are if electricity ever got invented. It's all built on someone's else's shoulders, and the fact that you can say this underscores exactly what I mean.
They save lives, you are one of many who push code that could potentially be of use to use to someone who does is not the same thing.
It's only weird because it conflicts with your copium, you two are not the same thing and society doesn't rely on you as heavily as you think you do.
> One of the fun things about MDs and dentists is that it's one of the only professions where the supply of those people is strictly controlled by the people who are in danger of being replaced.
I'm aware of the AMA's practices, I did my undergrad with pre-meds; I know how the system works, That still doesn't change what I said, you weren't working doubles in an ER during COVID. You were likely at home working normal hours and on Zoom calls, you really can't compare the two professions at all.
Just because the medical system itself is broken doesn't detract from what I said either, it's entirely broken and I explained my situation that I feel best reflects that with an anecdote, too.
> No one deserves anything beyond basic human rights. I have great respect for the work done by doctors, but other countries pay doctors far less and still achieve better health outcomes. As a society, are we getting a good value for our money?
See above.
And just so it's clear the same goes for software developers; I think we can all agree that most coding interviews are a waste of time, and as most get more experience under their belt they are less tolerant of the absurdity of it all. That doesn't diminish the talent that exists in this Industry.
Personally speaking it's something that I'm dreading about coming back into the tech Industry; I come from startup land as a founder, and my only interview at a tech firm was just the telling me about what project I'd be working on if I decided to join, they didn't even probe me for anything as I got head-hunted and they already did their research on me before they ever reached out.
I'm pretty sure that will be the case this time around and sitting around white-boarding sounds like a total waste without more than 7 years in the Industry to me, too.
It is not a false equivalence. Doctors are not scalable. Is the physicality of it increase the value? The inventor of antibiotics has saved more lives than any single doctor. I might agree that a lot of developers are working on trivial things, but that doesn't take away from the fact that all modern advances in areas that save lives have software engineers directly involved somewhere in the chain to make that advance.
No one deserves anything beyond basic human rights. I have great respect for the work done by doctors, but other countries pay doctors far less and still achieve better health outcomes. As a society, are we getting a good value for our money?
Ok, let me spell it out: you're not special. Nothing about your profession makes you special, you are not somehow better than anyone because you can sit at a computer and write code.
It's a skill, a very highly compensated one for now but an incredibly narrow one that happens to be useful a select few corps, sure, but so was were many other things.
And if one thing that COVID has taught us is how incredibly unnecessary you are to maintaining civilization--unless you are some supply chain developer in which case you were doomed either way. No one was calling for the return for programmers like they were for even barbers or cooks, in fact people lauded the fact that FB went down.
In short, you like being told you're special, it makes you feel good. But you are not. Wide spread misery isn't about equality, I can assure this isn't what I'm advocating here, it's about a self-awareness issue.
> you are not somehow better than anyone because you can sit at a computer and write code.
You're right, any human being with a pulse can produce effective software with no training or education or experience or effort whatsoever, and nobody's better at it than anybody else, unlike every other single human endeavor.
>And if one thing that COVID has taught us is how incredibly unnecessary you are to maintaining civilization
I don't think you understand how the world dealt with COVID.
Governments needed software fast to deal with things like tracking the spread of the virus, ensuring people observe protocols (like in my country Greece where you had to go online or send a text to make sure that you're allowed to be outside during the peak of the pandemic). You do mention supply chain, like it's one simple job, but in fact software is now an integral part of selling anything to anyone.
People went online to do things like work, socialize, buy things they don't need, buy the things they need to survive, go to school or learn skills they now need to survive like how to cook, exercise, perform, have sex.
I don't think being a programmer makes me special either, I'm not attacking that argument of yours, but in trying to make that argument you make some very myopic remarks...
It's horrifying that any software developer would participate in a scheme that required people to get permission to go outside. That was a fundamental violation of human rights that can't possibly be justified for any public health reasons. Developers need a better sense of ethics, and the courage to refuse such projects.
I assume this is a reply to my comment. What you're saying here is right, but I have no idea why you're saying it as I really don't care about being special, at all. Never crossed my mind until now, and nobody ever told me so (except for the other meaning of "special", and that has a lot of truth to it).
And then, even if I thought I was special (I don't), I would still be fully capable of feeling concerned for other less fortunate people while feeling concerned about making less than X times the average.
Anyways, the demand for software engineers increased extremely significantly (multiples of open positions, rates doubled) when Covid started and all remaining companies hopped on the digital transformation trend; and that continues to today.
Every contract I interviewed for since it began, they literally begged me to work for them (previously it felt like we're equals, they were able to say no without fear of not finding anyone else). They don't even ask programming questions anymore, they just try to make their company look like the best place while apologizing profusely for their limited budget. Your characterization of the programmers market seems totally out of loop.
> (except for the other meaning of "special", and that has a lot of truth to it).
Haha, I appreciate the candor, and earnest response!
> Anyways, the demand for software engineers increased extremely significantly (multiples of open positions, rates doubled) when Covid started and all remaining companies hopped on the digital transformation trend; and that continues to today.
I agree, it's why I came back to tech actually; I wasn't satisfied with where the fintech Industry was heading in the 'blockchain' craze and decided that while the pay was good, the most I had ever been offered actually in any job, I'd be dedicating my life to something I knew was a farce and we couldn't deliver because of abject greed to cash-in on the flavor of the month.
> Your characterization of the programmers market seems totally out of loop.
I never said the demand didn't exist, I said that their is a deluded sense of self-worth that is so out of touch with reality from the comments I quoted that it's astonishing to hear people make so much and still be like 'well that guys has more, so I should too.'
That level of greed is what puts me off so much from this Industry because it resembles banking, its also a red signal that we have entered what is likely a bubble in programmer salaries which for me as a person just getting back in to tech after a 5 year absence to study AI and ML (arguably the most frothy of all programming roles) makes me step and re-evaluate things.
>"they just try to make their company look like the best place while apologizing profusely for their limited budget"
Do you not see how your 2 comments here give off the impression that you feel special? Maybe you don't feel special (like you explicitly say), but those two comments especially give a strong impression that you do feel special.
I don't feel special because the same thing applies to every programmer I know. How could I in any way feel special when I'm just the same as others? I said it because I wanted you to feel how the market is, not because it makes me special.
And I don't think that a job makes a person special, why would it? It's just a job. I work on a hot market, someone else does not - that doesn't make any of us special people. To me, a special person is distinguished by much more than just working on a hot market.
I don't even know how much money the people who I think are special have or make, and don't care about it at all. Few of the best programmers I know make nearly zero money (of course, by choice). They're special by themselves, not because of their money.
Should I lie about the market so you don't think I feel special even if I repeat like 10 times it doesn't make me special, or what?
> "And I don't think that a job makes a person special, why would it? It's just a job. I work on a hot market, someone else does not - that doesn't make any of us special people."
Well, a job takes up roughly 1/3 of our working lives (minus 2/3 for sleep (8hrs) and "leisure" (8hrs)), so I would say that it defines us very much, and it's a lot more than "just a job". A "job" is stacking shelves at Tesco or driving lorries for Amazon. Tech is a career (and a lifestyle, given how much it seeps into one's personal life e.g. watching Defcon before bed, I doubt lorry drives watch Lorrycon talks before bed...)
As for your other point, fair enough, point taken.
> And if one thing that COVID has taught us is how incredibly unnecessary you are to maintaining civilization--unless you are some supply chain developer
Wait what? So you somehow realize that if you're a software engineer supporting some necessary field, you're necessary by extension, but apparently the only thing we needed during covid was a function supply chain. Impressive mental gymnastics.
No one was calling for the "return" of programmers because (almost) no one interacts with them directly like they do their barber. Do you think their barbers decided during covid that they no longer needed to support credit card payments, an electronic scheduling system, etc?
The fact that you cannot see that is what I mean, you take what I said as a personal insult while simultaneously having the collective view that if 'poor people want to stop being poor they should learn to code like me' around here.
It's cognitive dissonance and the part that I don't get is how you think people with other skills would want to do this even if given the choice were it not for the money.
I'm a self-taught coder and don't regard myself highly. I will be honest, I never thought it was easy but it's also not difficult in the same way that biochemistry, nuclear chemistry or organic chemistry is difficult either: it's more tedious than it is anything else. It's all relative to what you've done before, I suppose.
It's a lot of grinding, searching and revising and a war of attrition. All while putting up with people who quite frankly have the social skills of a lamppost and not giving into the urge of wanting to just quit and leave it all behind and start a hobby farm--as is so common in the tech circles towards the end.
I can see what you mean, I just don't agree about the skills.
I agree to a large extent about the social skills, and even the hobby farm seeing as I've considered it more than once... but being good in IT requires a wide range of skills.
It feels like most people that enter the field now are here because of the money, which is OK, but that doesn't mean they are any good, many are not, they are just taking advantage of a good opportunity. Again, that is OK.
This is a gig that won't last forever, like having a popular YouTube channel, so there is no reason to read into it any more than "people are jumping on the bandwagon during a gold-rush", and no reason to get so upset about it. There is no more or less social inequality because of IT workers than there was during the "house flipping" trend from a few years back, Crypto, social media influencer channels, etc.
There are a lot of good paying jobs, and no job will ever make you wealthy or powerful, so no reason to get worked up over ordinary working-class people (even if they make 6 figures, it's the 8+ figures that oppress).
> This is what I will never understand about most established tech people, they see all the widespread misery and poverty in SV and they still have the capacity to feel sorry for themselves for not making X times more than 'that other guy.'
Out of sight, out of mind? What does it matter whether the misery and poverty is in your neighbourhood, or in the third world?
> Out of sight, out of mind? What does it matter whether the misery and poverty is in your neighbourhood, or in the third world?
Or a level self-abosrbedness that can only be defined as peak narcissism, really.
I get wanting to be paid what you're worth, but when it comes to pretending you're some how any better than any other wage-slave is where I have trouble crossing over that level of hubris.
And that is not just keep up with jones syndrome: getting services
done like building work, cleaning, etc. gets more expensive. I am all for equality of that nature if everyone is joining in!
American cities don't ban housing construction (the one exception being San Francisco/Bay Area). Every other major US metro (literally everyone except SF) has been experiencing a massive housing construction boom for the past ten years straight now.
This isn't true. Most major metros are experiencing a serious housing crisis right now. We see similar problems to SF here in Somerville and Cambridge, albeit to a lesser degree. There's certainly not enough being built to keep pace with demand. The suburbs around us are even worse.
> We see similar problems to SF here in Somerville and Cambridge,
"Boston saw a historic building boom during the seven years (2014-2021) that former mayor Marty Walsh, a former construction union leader, occupied City Hall. The city’s skyline transformed, and continues to do so. Tens of thousands of new units of housing were created. An entire neighborhood rose from the ground."
- https://www.boston.com/news/politics/2021/07/19/boston-mayor...
> Most major metros are experiencing a serious housing crisis right now.
Completely agree. But your reasons are off. Most high prices have literally nothing to do with supply or demand in any traditional (person-based) sense. Boston certainly fits that model -- it's price problems have nothing to do with any shortage in construction (construction is booming) or 'housing ban' (obviously there's no meaningful ban, because construction has already happened in large numbers for over a decade)
> Boston certainly fits that model -- it's price problems have nothing to do with any shortage in construction (construction is booming) or 'housing ban' (obviously there's no meaningful ban, because construction has already happened in large numbers for over a decade)
This is poor reasoning. The fact that some housing got built does not mean that there weren't significant impediments to building it, many of which still remain. Or that even during the boom that enough housing was built to sustain increased demand. There has been a historic housing boom alongside an enormous population surge over the past ten years (nearly 10% in the city proper alone). The boom is still not keeping pace with demand, and restrictions on multi-family housing remain. Here's a good article that gives an overview of the policy issues locally: https://commonwealthmagazine.org/opinion/on-housing-wu-shoul...
In particular:
> In Boston, on account of its antiquated zoning laws, it’s easier to build a leather tannery than it is to site an apartment building. The zoning code is written in such a way that it is nearly impossible to build multi-family housing, without going through the time consuming and costly process to obtain a zoning variance. Even then, projects are at the mercy of abutters and neighborhood associations that are often diametrically opposed to any form of development in their backyards, particularly projects with a higher unit count.
Also,
> Most high prices have literally nothing to do with supply or demand in any traditional (person-based) sense.
Citation needed. Population is growing faster than housing supply. High prices are exactly what you would expect in this situation. Building more housing is the only long-term solution.
That's not true, every major city in the US is experiencing a major housing shortage. Not building enough units to keep up with demand can hardly be called a massive boom.
If only Americans reignited their imagination and didn't just settle on having a few big cities in opposite corners of the country.
America is huge. There's land everywhere. Start dreaming. China has 160 cities with 1+ million people. We have 10. Granted, there is a massive population difference, but we should most definitely have more than 10.
There are major issues when you only have a few cities with the bulk of the opportunity and high salaries for given fields. It stymies growth for the rest of the country, and for all the people we claim to care about: the poor and uneducated.
Greece has this issue with Athens being the only realistic metropolitan location. All the resources are there, and those left in the villages and small towns are finding it harder and harder to advance. If you aren't going to Athens (or immigrating to another country), you aren't succeeding. This is a big problem.
This is kind of ignoring all the positive effects from density. Yes, housing for density is hard. Yes, there are some negatives. But you would not get anywhere near the economic productivity you do from 330 Million people uniformly spread across the US as you do from having huge spikes in NYC and LA (and other metropolitan zones).
You also have to face the fact that as you spread people out, most costs go up. Cities subsidize suburbia and rural areas in the sense that cities generate more tax revenues of all types relative to costs. Suburban and rural areas mostly fail to raise enough tax revenue to pay for their own infrastructure and generally rely on various handouts from state and federal governments to build things like sewers and roads, which they then do not adequately maintain due to budget shortfalls.
The US has way more than 10 "cities" with over 1M population, unless you ignore ground truth (metro area) and only count people within random city boundaries
You may be conflating metro areas with cities. If you are, it's not a helpful distinction in either case, and not the point I am trying to illustrate.
For example, I could live in Wise County in Texas, and be technically counted towards the population of the Dallas/FW/Arlington Metro, but I would never dream of driving into Dallas from there daily for services, schooling, or work, and if I did, I would be severely disadvantaged, especially if I was poor or lacked resources.
I don't they are conflating metro areas, I think they're describing the accumulation of population a defined area. Metro area can make "cities" seem larger than they are because that population is spread out, but city is misleading as well because it ignores the surrounding population.
Let me put it this way. If you go by city population size, Columbus where I live is larger than San Francisco, Seattle, Boston, Las Vegas, or Atlanta [1]. In fact, Columbus is almost the same size as Atlanta and and Miami combined. Does that seem right to you?
If I were you, for your argument I would use population densities.
But you can’t bucket a million people living in thousands of square miles as the same as a million locked together in a suburban sprawl connected with rail and roads. Look at London. Take away the boroughs and what is really left?
China may have a 160 cities with a million+ people, but, do all of these cities have the infrastructure and opportunities that are the same as or come close to Shanghai, Beijing, Shenzen? IMO, this is a case where quantity alone is a poor metric.
This is a difficult question to accurately answer because the only source of this information is an unreliable one (the Chinese regime). We can, however, assume via observation of how efficient and diverse their manufacturing is, which leads to some baseline assumption they all have above average infrastructure, housing, and other services, in addition to affording salaries to those millions of people that does not result in unmanageable civil unrest. Plenty of experts believe China's infrastructure is ahead of the US at this point. They build 100 miles of high speed rail for the same cost we build 1 mile of tunnel, or 10 miles of toll lane that 90% of commuters won't use.
There are other educated assumptions we can make based on the rapid response to the Wuhan outbreak and the surrounding cities, but in my opinion, based on inference from what we can observe from the outside, the answer is firmly yes.
Well, compared to the rest of the world, I found US diversification much better than most of other countries, that have only one major city to where everything flows in.
From an environmental point of view, it seems nearly ideal if most humans would live in a few big cities, than more of the rest of the earth could be given back to nature.
entry level jobs in software engineering at FAANG were over 120K about 10 years ago and that was already underpaid. California is a really expensive place to live long term and people generally do not do the math and do not account for child care, retirement, sickness or health issues or whatever. then there is the cost of (ongoing) education and issues of mental health in this industry.
And those who think remote will be long term to their advantage are wrong. All that will happen is that these companies will find a way to pay you less. The solution is to organize.
for those who will reply that people are making less in CA and also need to survive… i was in a black uber recently and the driver told me he was averaging 20K per month. not bad for driving a car with zero education or leetcode requirements.
Now that I think about it, you're right. The entry level in SF & Peninsula 10+ years ago was 120k (except startups). Entry level hasn't increased with cost of living so that 120k isn't the same as 10 years ago. Senior pay has increased a little at around 200k-300k. Depending on equity value that might be 300k-500k total comp.
based on levels.fyi senior comp should be somewhere around 800k TC which makes sense taking into account what living in metro areas in CA will cost taking everything into account long term. of course a large part of that is equity etc. 200k is still not very well paid taking into account many other ways you can make money and the crazy requirements put on engineers.
As somebody who looked into doing the highest echelons of Uber/Lyft in the most expensive parts of California - I do believe your driver was lying to you about $20k/mo.
Would be glad to be proven wrong, but I’ve looked pretty deeply into it.
this is not uberX but uber black or SUV. i think he is doing a lot of airport trips which are going to be at least $50 without tips. but you are right, i have no way of verifying what he said.
That's a strange concern you seem to have... why does it bother you that fellow programmers are getting salaries close to yours? Do you think it would feel better if your salary could be 5x higher than theirs? Why? That will not actually affect you negatively in any way! Unless you're being actually underpaid compared to your peers with the same experience and skills, there's only good things about people with lower skills getting higher pay.
If you're a senior delivering 10x the value of a grad, does it not feel fair to offer more than 2x the salary?
I'm torn tbh - there are various ways that a salary can be set, including the value people are delivering, market forces and in reference to others in the career ladder. There's a balancing act to be had, but I can see where the GP is coming from.
This is why I went into freelance. It’s not about being a junior, there are people that put in so little effort they basically bring negative value, and I’m being paid comparable to them
> you're a senior delivering 10x the value of a grad
Not arguing one way or another. But an alternate hypothesis would be this skill gap has closed.
Education might be better. Or tooling may have improved such that the tangible benefit of experience has, for most current applications, depreciated. Assuming the reduced innovativeness of the average tech worker today versus ten years ago, the equation balances.
Test might be measuring this skill gap in new industries (e.g. crypto) versus established ones (like adtech).
Even with the best education, tooling and copy-paste resources, it still takes at least 4-5 years to become competent. In my opinion, entry-level quality as consistently dropped over the last 20 years.
It's not, juniors are as bad as they were 2 years ago.
Generally it's politically easier to nerf better paid employees than cheap ones.
You can have the socialist argument of "hey senior engineer, take a salary cut / no raise for the common good, to avoid layoffs of junior engineers - which btw would be the first to go as they're not as productive as you are" and I've seen plenty of senior engineers accept that. Their livelihood are not as stake so they'll take one for the team, forgetting that it's a for profit company which can't find the money.
In the above scenario, I refused and I wasn't fired - but I also started looking for a job and switched 2 weeks after the above episode happened.
Do you still believe pay is directly correlated with how much "value" you deliver?
Maybe in an alternative world, it would... but in my experience, salaries are almost entirely based on market demand and supply, local regulation, and how much money the particular industry you can find jobs on can make, divided by how many people they need to make it happen (which changes how much they pay when they get desperate for experienced workers).
How much value you actually deliver depends not only on your skills, but on the company you're working on actually creating value (which depends on not only the product, but the marketing, sales, local conditions, competition etc.)... and even though that will affect your salary, as I mentioned before, the real driver of salaries is supply (more specifically, how many capable people could do the job besides you, and how much other companies would be willing to pay them)...
For example, we know lots of companies that made billions of dollars while only employing a few dozen engineers... I'm pretty sure those engineers were only getting the minimum possible salary to keep them from leaving for another job... despite them each arguably producing several million dollars of company value every year.
On the other hand, lots of companies make losses for year while still paying good salaries to thousands of people... would you rather see those people getting no salaries until the company turned a profit??
Now that we've established that there's no real correlation between the value an individual salaried employee produces and how much money a company is actually willing to pay them, let's look at the social aspect of the problem as well.
When everyone gets a decent pay (by us increasing the bottom relative to the top), society is fairer in a greater sense, as more people will have the means to have a good life regardless of their education or skills... those with greater skills will always be more highly appreciated and better compensated in a free economy (specially those willling to start their own business - which allows them to extract nearly ALL value they produce at the cost of high risk to themselves... by the way, that's why those who do it are not willing to give their salaried employees ALL the value they deliver). That has great benefits to society as a whole as there is going to be fewer people that resent the "smart asses" making 10x more than themselves, the economy becomes more vibrant as there's more people who can afford to spend money on fun things, and so much more... imagine your son turns out to be a bit dumb (it happens, unfortunately)... should he be doomed to a life of misery?
Finally, you assume you deliver 10x more than someone else but I bet you have zero evidence to back that up. Developers specially are extremely hostile to actually having objective measurements of anything, so we can't really know for sure.
So, that's why I think that no, it's not very fair for anyone to make 10x more than anyone else.
What a condescending tone. I guess you're an objective meritocracy absolutist or something. To me, it seems like anything but shifting the whole ladder would discount every year you spent at the company and your experience level up to whatever value your role creates. It means there's 30k more available per person, but maybe not for people already there, and that's a lower ceiling. Good time to consider trying to switch.
> What makes you think the inflation rate is under-reported
I hope I don't come across as a conspiracy theorist here... but based on my own experience and also how CPI is calculated. CPI constantly shifts out items to 'mimic consumer behavior' which coincidentally also makes inflation look lower. As someone who hasn't really changed much, our grocery bills went way, way over any reported number. It is probably close to 30-40% in total(2019 to today), but I can't find any old receipts proving as much...yet.
Rent for us is up from 1700 to 2750 for like sized houses (due to not getting renewed, it's admittedly not on the exact same property).
And gas well, that tells its own story.
> Do you see any concern with other people making more money that would not be reflected in an (accurately reported) inflation rate?
No way! If everyone could make 100k a year and we could have 2018 prices back...that would damn near be a utopia.
> No way! If everyone could make 100k a year and we could have 2018 prices back...that would damn near be a utopia.
OK, it's good we agree on that.
About inflation: CPI has some aspects that underreport inflation and some that overreport inflation.
This is actually a serious topic for economists, not just for in conspiracy theory nuts. Though you can imagine that the former focus on different aspects than the latter.
I can write a bit more about this from an economics perspective. Some interesting keywords to look into:
- hedonic adjustment
- gdp deflator
- Big Mac index
Slight tangent:
Partially because inflation is such a 'subjective' topic, and requires judgement about how much better or worse the new iPhone is compared to last year's model, my preferred model for central bank policy is nominal gdp (level) targeting instead of inflation targeting.
Nominal GDP is the same as total nominal income, and basically just counts up every dollar everyone in the economy spends/earns. No judgement about the quality of iPhones necessary.
(Alternatively, you could target total gross nominal wages. It's almost the same in practice, because the ratio of total wages / gdp is fairly steady over time in the short run.)
What baffles me though is that its not like this crazy interview gauntlet is being maintained purely by HR. Engineers in those big tech companies are very protective towards those processes as well, and loudly protest if one would try to change them (complaining about lowering the bar, not hiring top tier talent anymore, etc.).
And tbh, I would be afraid of what they would replace those LC interviews with. At least, I can prepare and grind a LC test. I do not want to have to explain in details what a inode is when interviewing for a back-end position, while I have never had a need for that kind of knowledge in 10 YoE.
Amusingly, I have gotten exactly that question - or rather, "what's in an inode." I answered "data about a file object, but none of the actual contents of the file, which are stored elsewhere" and failed because I didn't mention the magic words "metadata" and "permissions". Fair, I guess, but this wasn't for a systems development position at all, so I can't imagine it would have been critical to the job!
Another favorite of mine, for a web development position, was "what happens at the network level when you load a webpage" where I got marked as getting it wrong for skipping explicit description of SYN/ACK step of the TCP connection. Again, fair, but probably not relevant.
> where I got marked as getting it wrong for skipping explicit description of SYN/ACK step of the TCP connection
that's pretty crazy because if you're going to talk about that then you're going to have to talk about congestion control, windowing, every other protocol besides IP that TCP can run on top of and how they work, and all the other things that come into play based on the current state of the various networks between you and the server hosting the website. Answering that one question could take an hour itself. It reminds me of that saying that goes like "How to make an Apple Pie. Step 1, create the universe..."
I'm very fortunate because my last three interviews have been basically calling up an old colleague and asking what they've been up to and if they want some help.
And this is why I hate those "Tell me what happens when you type google.com into your browser" questions. Unless the interviewer is VERY active in guiding the discussion, I have no idea how to proceed. I could probably talk about DNS for 20 min. I totally bombed this question in an interview once because I got like zero feedback during the discussion.
As someone who uses questions like this in interviews, the entire point of these kinds of questions is to see where the candidate takes you.
If you want to spend 20 minutes talking about DNS, I'm going to ask a lot of follow-up questions throughout the process, not fail you for not meeting a rubric or magic list of buzzwords. My goal will be to see how deep your knowledge on a particular piece of technology is, especially for a security role.
The problem here isn't the question; the question is a tool. The problem is that the interviewer isn't using the tool appropriately.
(Note: I don't choose these questions, the team I work for did. I follow a script, and it includes questions like this. But the script also contains a reminder for how to use the damn question.)
If I was given this question my first inclination would be to ask what your current understanding of the process is and you want to know. If that didn't help, I'd start with the absolute highest level "the google.com website loads in the area below the address bar" and then I'd be back to "what else do you want to know?". Hopefully that would be enough for you to start narrowing in (what does "load" mean and how does that work?).
Opening with DNS, HTTPS, TCP, etc. could end up being a complete waste of time depending on what signals your looking for, what you're really asking, and your background. I'm curious how my responses would be interpreted by you as someone who's asked questions like this before?
I would ask probing questions like "how does the area below the address bar know which website to load?"
Like, my goal isn't to see how much of a spiel you've rehearsed for a finite set of possible interview questions.
That sort of exercise constitutes a useless hazing ritual that selects for people with low anxiety at the moment, not aptitude with the relevant technologies for the job.
I'm going to keep pushing the conversation along until you've either hit the depth of your knowledge and say "I'm not sure", or we need to move onto other questions. If we hit your depth early but we're headed into an interesting direction, I might ask, "How would you build [protocol or feature you're not sure about]?" This potentially gives useful data in how you, as a candidate, approach abstract problems.
But I should also note: I'm an introvert. I'm shy. I get nervous easily in social situations. I'm not the best interviewer, and I don't believe the processes I learned from my employers are necessarily the right way to hire technical expertise. I would rather replace the interview with timeboxed work-sample tests. But I don't call those shots.
Completely agree, and its very telling almost immediately in these types of questions how technical you are. If you say "it asks the webserver for a webpage" in almost all cases there is a superficial knowledge compared to someone who opens with "a DNS resolution request is made to get the IP of the server, then we send an HTTP get request to that server with a URL..." and from there we can dive in to how DNS works, how TCP/IP works, what a typical webserver does, what are the http verbs, etc...
With the first type of response, when you follow up with how do we know where the webserver is, there is usually uncertainty. The whole point of open ended questions is to understand where your technical understanding is, not to hit a bunch of keywords on the way. This type of question though is way outside the norm though, I think it is a misunderstanding on the interviewee's part if they think this is an exercise in saying specific terms. I can see how its potentially more frustrating- there is no pass/fail, just how well did you do on a scale that is a bit subjective.
Yeah that stuff is awful. Plus you have to judge if the people you are talking to are technical or just waiting for you to hit keywords. I've actually been to an interview where I just rattled off keywords as answers and was offered the job but turned it down lol. Not cause of that but it was a gov job and the pay was awful, that was before I understood "Pay Ranges" meant bottom at gov jobs.
> Engineers in those big tech companies are very protective towards those processes as well, and loudly protest if one would try to change them (complaining about lowering the bar, not hiring top tier talent anymore, etc.).
Hazing is a feature of almost every organization that is regularly recruiting new members.
Is it though? Seems pretty specific to the tech industry (and some others).
Never heard that there were crazy interview rounds for experienced lawyers, marketers, project managers, even other non-tech engineers. After a certain amount of experience, people assume from your resume that you are not an impostor and interviews are mostly about motivations / behavourial fit.
I don't know how much those other professionals are 'managed' in a daily sense.
I worked in a law firm for a while, and didn't see the 'daily scrum/standup' thing done, even when multiple lawyers were working on the same case. They would certainly have regular meetings, and direct support staff to do certain things.
I was only a delivery/courier person, so certainly wasn't privileged to hear every case detail, but I was friends with someone whose mom was effectively the office manager. She knew most practical details about the cases - court dates, filing dates, parties, procedures, etc, but would never dream of telling any of the lawyers how to lawyer. She might remind them of due dates, but she didn't set the dates either - the courts did that.
And to think, people working in IT actually get raises, and can earn more money by changing jobs; they are already quite privileged compared to those earning closer to minimum wage (like 30K a year?), given that said minimum wage hasn't been increased from $7.25 in 13 years now, while cost of living and inflation HAS gone up.
One issue is that while costs of products, housing, etc is adjusted pretty much instantly with supply, demand and inflation, wages aren't. When inflation numbers are introduced, companies jump to announce they're raising prices, citing cost of resources or... whatever. But they don't increase wages.
How often have wages gone up at a rate higher than inflation? I can't remember it. So basically people are expected to continue living on a currency that is decreasing in value constantly. Or they're expected to switch jobs or grow in their career, not to have a better life, but just to be able to maintain their current lifestyle.
Remember these tropes from the 80's and 90's and before where people bought a sizeable house, one or two cars, and put money away to put their kids (they could afford kids too) through college, all on a single income? Yyyyeeeaahhh. actually I don't know if that was the case for most people, it's what sitcoms depicted.
> I don't know if that was the case for most people, it's what sitcoms depicted.
It wasn't. Bill, from the Cosby Show, was a physician, Tony, from Who's the Boss was a former baseball player, the dad from Full House was a TV broadcaster, etc.
It's probably the reason "blue collar" sitcoms were popular in the 90s (Rosanne, Grace Under Fire).
>ready quite privileged compared to those earning closer to minimum wage
I really don't like this self loathing mentality on HN. I work really hard to keep up to date in IT, even after I'm off work.
Sorry to burst your bubble but most people just go home from work and get high or drunk then watch 5hrs of TV. Thats the reason they can't work tech jobs. I didn't go to school for CS but I still make lots of money in tech because I want to and I keep myself up to date.
Its not all poor single moms without any time or some other tragic story.
> that said minimum wage hasn't been increased from $7.25 in 13 years now, while cost of living and inflation HAS gone up.
And it never will go up when conservatives have a majority in the Senate, but regardless wages have been growing (1)
> How often have wages gone up at a rate higher than inflation? I can't remember it
According to the same source, there were multiple periods since 2007 where wages rose faster than inflation
That's not to say that wages shouldn't grow higher or make up for the periods where wage increase is below inflation... but at the same time, it's dishonest to point to the floor set by the government as evidence, when in periods of high labor demand and economic growth we see wages go up in (since you can't hire anyone at the minimum wage!)
The overall economy inflation numbers are completely meaningless when cost of education, housing and healthcare has been skyrocketing for more than a decade, maybe even longer.
The average worker, especially those with families, have seen their costs inflate much, much higher than 11% per year for quite some time.
In Foster City, CA, bay area, a salary of $146k is considered low income, and can get access to affordable housing [1]. A 3/4 bedroom townhouse in Foster City, CA bay area used to be 800k usd 10 years ago, today it goes for 2M usd, with offers 200k to 400k above asking price. [2] [3] [4]
I'll throw in a different angle. If I'm truly happy at a job, pay isn't a big concern as long as I can pay the bills. The more miserable the job becomes, the more the money becomes the only way to tolerate it so it better keep getting higher.
Pay in software roles might be at an all-time high today, but respect and independence is at an all-time low.
In the 90s I had a private office with a door and a window. Today we're packed like sardines into an open office (although thanks to the pandemic this part improved).
In the 90s I worked on deep hardcode tech, today nearly every company just wants to glue libraries to frameworks and connect AWS bits together. Work is no longer intellectually satisfying.
In the 90s tech companies produced tech, that was the product, so it was exciting and hip. Today so-called "tech companies" produce advertising, shopping, social spyware, movies. It's not tech anymore. Boring.
In the 90s, senior engineers drove engineering decisions. Today we have non-technical product managers forcing their way into technical decisions.
In the 90s we were trusted to get things done and allowed the time to get deep in the zone. Today it's forced daily status reports, "agile".
In the 90s we could plan ahead and go deep, research and build well-architected solutions. Today the task better take no more than 1-2 days so the story gets closed, "agile".
I could go on and on but will stop. If software engineering today had the working conditions and respect it had in the 90s, I'd happily do it for 25% of my current salary and be so happy.
> ...a 6.9% increase since 2020, the report found. But inflation is over 11% since 2020. This isn't an increase. The
I have heard this point made a couple of times recently. Is there any reason why these two values should be the same? It is a point of concern for those on very low incomes who spent all their income and are not able to save anythiny, but if you are on a six figure income and only a portion of that income is spent on groceries and housing then I assume you can still end up wealthier than the previous year.
The employer is the one taking that extra value, so why wouldn’t the “you already have enough money” argument cut both ways? I also assume management is wealthier than the previous year.
I'm not sure that's a reasonable conclusion for most cases. Inflation is not uniform across the board, depending on who your employer is they may not have raised their prices by whatever the average inflation rate was, meaning the company as a whole is taking in less value (based on their prices hikes vs. the inflation rate). So the new value from the inflation rate is not "going" anywhere, it's just not there.
That's not to say you shouldn't argue for raises anyway, but just that it's not like every company is suddenly taking in X% more dollars because the average inflation rate is X%.
So management is employees with worse legal options?..
(A quick search seems to say that managers can't join most unions, but there might be some they can join. There seems to be no legal barrier, but rather that existing unions don't want them, and that managers seldom ask to join.)
"Is there any reason why these two values should be the same?"
Are you producing the same value for the company as you did last year? If inflation is higher, then you are receiving less value via your pay from producing the same or more value for the company.
Inflation is a measure of the price of the basket of goods. Let's say all prices stay the same except that gasoline is up 100%. This will be measured as "overall inflation" but it isn't like the business you are working for is raising prices or taking in more revenue than before. If everybody says "well inflation is X% so we need to raise prices and salaries by X%" then inflation will necessarily rise beyond X% because that X% was driven by different price increases.
People like to think of X% inflation meaning that every dollar is worth less and every product as costing X% more, but this isn't actually how it works in practice.
That basket of goods is supposed to be representative of a person's needs (although there is debate about that). If the person's aggregate purchasing power across the basket went down, then the value of their salary went down. They're receiving less value for doing the same work.
Most things are interconnected. Yes, gas might not directly affect a specific company, but it will eventually due to things like inputs, shipping, etc going up. And yes, even the people on the supplier side getting raises will affect it.
"People like to think of X% inflation meaning that every dollar is worth less"
At an aggregate level that is how it works. The basket of goods costs more. The person's purchasing power has been reduced. The the number of dollars needed to purchase the same basket of goods is higher. So yes, the dollar is worth less. As you point out, not every product costs more, but most do eventually as the effects ripple (some go down, but usually though changes in technology/production/etc).
I understand that the company needs to stay competitive and they would need to increase revenue to increase salary. Usually that isn't a large enough increase to affect competitive prices for the actual workers (executives and management are different). Of course that assumes being competitive with other onshore companies. If competing with offshore companies in LCOL areas, then it's going to be nearly impossible to compete (see things like steel production in the US).
Is your work in tech supposed to hold a sacred scalar linear multiple of the average labor cost ( read: salary of people who produce food and goods) of life’s necessities?
So many entitled people arguing for an economic caste system…
Arguing that your wage should always match or beat inflation is arguing for defacto permanent income inequality. You’re literally saying your work is always the same amount more valuable than the average labor cost increase incorporated into inflation numbers.
"So many entitled people arguing for an economic caste system…"
I don't see that anywhere in my argument.
"Arguing that your wage should always match or beat inflation is arguing for defacto permanent income inequality."
Do you have an alternative approach? I have not heard any mainstream argument for setting all salaries/wages to be equal.
You have to define income inequality and then determine what level of inequality is acceptable. Should a CEO make more than a worker? In my opinion, probably. Should they make 100x more? I don't think so. If I could make the same money flipping burgers as I can working as a dev (let's say around the median salary of $40k), I'd quit today and most other devs would too. Why should I go to college? Why should I endure the longer hours/on-call? Why deal with the frustration and office BS?
Different jobs make different money because the work carries different value. We should protect those at the bottom and try to make it fair. But fair doesn't mean literal income equality with everyone making $20/hr regardless of job, performance, etc (ie equal and equitable are different).
The fact that workers are seeing real wages decline since the 70s is the problem. If you adjusted them for inflation, then income inequality is not as much of an issue. (You'd still have to adjust capital gains taxes and the real increase in things like executive pay, but at least indexing wages to inflation would have benefited things on the worker side.)
"You’re literally saying your work is always the same amount more valuable than the average labor cost increase incorporated into inflation numbers"
Not if everyone gets the inflation adjustment as they do in that other country - Denmark maybe? The discrepancy can be adjusted by increasing the floor, as that impact will raise the lower end more than the rest of the market (eg the people that need the raise most get the biggest impact while those not at the bottom see minimal effect upto a certain level).
You're literally arguing against yourself. You're saying that workers should not get inflation adjustments. Where do you think that money goes? It goes into the pockets of the executives and the investors (capital instead of labor).
On top of all this, you wrongly assume I'm some high earning person. I make less than $100k and live in a moderately high cost of living area.
Ok, time to put your money where your mouth is. In-N-Out pays its store managers over $100K/year. Their workers make around $25/hour which scales out to $50k/year for a full-time employee.
And trust me, most devs I know couldn't handle flipping burgers. Dealing with customers, dealing with managers, dealing with cleaning restrooms, dealing with late nights/early mornings.
I'm not. I'm saying if everything paid the same (true income "equality", really equity), then why wouldn't I want to do a job, that is stereotyped as easy and typically low paid? There are tons of burnt out devs who want to quit and do something else.
There aren't any In-N-Out in my state. If I could get a manager position, then I'd consider it (although the range starts below $100k, especially outside of CA).
"And trust me, most devs I know couldn't handle flipping burgers."
Maybe. Many of the devs I know seem like the could (or have). But there are some that seem like they would struggle. I've worked in a warehouse, I've worked in billing, I've worked as a janitor, I've worked retail sales, and I've worked as a house painter. I've even done a weekend gig as a good worker at a BBQ stand. Food service is not my main choice (I'd take that over painting though), but your example pays much better than any of these did. Every job has tough stuff and everyone likes to assume others couldn't do it because they don't have as much grit or whatever, including devs. I think this is mostly just bias.
I switched careers from fast food and restaurant ownership to IT. Almost every dev/engineer/sysadmin I know would last about a week before walking out. We whine about having to do daily standups. Try standing on your feet for 8 hour shifts. I think the people who are stereotyping these jobs as easy are idiots who don't know what they're talking about. The work is tedious, usually hot, with few breaks, with crappy uniforms, with bosses that generally are bad, and with few or crappy benefits.
I brought up In-N-Out because while the job is hot, and probably tedious, the employees seem to genuinely enjoy their jobs. Either that or the management has done an incredible job of brainwashing them.
But for other places, it's not that the employees are any worse than in IT. When I worked fast food in high school, one of my coworkers was the valedictorian in my class who became a doctor on the Navy's dime. Another scored a perfect SAT (in 1982) and got a full ride to Caltech. One guy was so smart, he reverse engineered the displays on some of the kitchen computers to mock the management. We had a real mix of people, both economically and socially diverse. Times have changed, and the US doesn't have as much social or economic mobility, but it was an interesting time.
The only difference I see between the people I work with now, and the people I worked with in my previous life is how much we're paid, and the working conditions. There are assholes in my current company, and assholes in fast food.
I'm saying that if you give everyone a raise matching inflation (all things being equal), the people's wages who rose naturally (and contributed to CPI by virtue of raising labor cost of goods) are no better off than they were before.
My software engineering salary buying less of car/house/food than it did last year is a reflection (in an abstract sense) that my total share of "value" is relatively smaller by comparison to the factory worker, farmer, etc.
In other words: the economy is putting more of a premium on people who make things that everyone buys than it did the year prior. My take is that this is totally ok. The value of goods, services, and labor relative to one another change over time. Raising my salary in precise lockstep with the increase in cost of goods will only lead (indirectly) to more inflation.
Put another way: The company isn't compensating you in Abstract Adjusted-for-Buying-Power Compensation Units. They aren't guaranteeing your work entitles you to the same lifestyle every year, year after year.
They're compensating you in dollars. If your best argument for an 11% raise is that "stuff is more expensive", it's a lot less convincing than "I'm 11% more productive".
It sucks that things are more expensive, but if the alternative is freezing everyone's relative buying power where it's at right now, I'd prefer not to do so. Because I think that people growing my food and making things in factories deserve to get ahead, but in order for that to happen, (all things being equal, even if you drove profits and executive pay down to some "acceptable" level) costs of things might have to increase.
All that is a super abstract and hand-wavy argument ignoring really important factors over the past several decades. Now of course, the reality of the situation is that a lot of productivity increase went straight to the top instead of improving compensation. But wage-inflation for all doesn't solve that.
But in my abstract hypothetical scenario:
- where the only relevant factors to CPI are labor cost
- and we've effectively max'd out productivity per worker
- so wage increases aren't offset by output
then I'll take increase costs relative to my personal lifestyle if it means less people with essential jobs living paycheck to paycheck.
I don't want everyone on the same salary, but in a scenario where vampire squids aren't sucking all excess wealth out of the system, I'm ok with my tech salary being relatively closer to farmers and factory workers. (or really arriving at whatever unmolested market price makes sense)
"My software engineering salary buying less of car/house/food than it did last year is a reflection (in an abstract sense) that my total share of "value" is relatively smaller by comparison to the factory worker, farmer, etc"
That's true if that factory worker or farmer is also getting a raise. It can still be true if those workers are getting raises higher than inflation even if you as a dev gets an inflation adjustment. The thing I was saying is that I should get inflation adjusted and those other people should be getting more than inflation adjusted by moving up the floor.
"it's a lot less convincing than "I'm 11% more productive"."
It can still be convincing if the company is able to charge 11% more for the same output you are producing.
"Now of course, the reality of the situation is that a lot of productivity increase went straight to the top instead of improving compensation. But wage-inflation for all doesn't solve that."
Not entirely, but maybe a little. The fact that the top are absorbing the increases while the workers absorb inflation is the problem. If wages are inflating as they are now, the at least puts pressure on the top to stop sucking up the extra to stay competitive. Maybe. I can't imagine how good life could have been if real wages hadn't decreased for the past 50 years.
"I'll take increase costs relative to my personal lifestyle if it means less people with essential jobs living paycheck to paycheck."
I'd rather make the top pay. I don't make all that much.
That would be a valid explaination if it checked out. However, real wages have declines for the past 50 years. We also see way more inflation than deflation.
The main issue is that all of your dollars, even the ones you save, are worth less.
Let's invent our own unit: the "grocery-year" -- one grocery-year represents the amount of money needed to buy one year of groceries.
Now let's say I am making $100k this year, and spending $10k on groceries. My annual salary is ten grocery-years (though I'm saving nine of those).
Let's assume that inflation is 10%, but I get a 5% raise. You're absolutely right that my net income will increase in dollar-terms (i.e. I'll spend $11k on groceries now, but make $105k; a $4k net increase). The issue here is that in actual purchasing power, my salary has gone down: my annual salary is now only 9.54 grocery-years.
Obviously not everything experiences the same rates of inflation, but the idea here is that inflation affects all of your income, not just the income you're spending. Likewise, my actual purchasing power will decrease if my raise doesn't match inflation, regardless of how much actual purchasing I do in a given year.
Yes that's fair. My point wasn't that high inflation does not matter or that it does not affect people on higher incomes. The rate of inflation and the rate of wage increase, however doesn't necessarily need to be pegged for everyone, as the real effect of high inflation is inversely proportional to income.
I was living in a HCOL location with kids and my experience matched yours.
I then moved to a LCOL location and I spend a fraction of that.
I've been working remote since long before the pandemic, but I did enjoy some benefits of living in a HCOL (fun events, social life, networking) - benefits that I wasn't using as much after having kids.
If you're in the States you may also consider the benefits of lowering your tax rates + health insurance bill by moving to LCOL country overseas.
There are a few (mostly) english speaking countries with low taxes, cheap properties, low crime with decent public healthcare or cheap good private healthcare.
Genuine question: would you have felt better with a 1% raise?
In 2010 I was working in the UK and we had about 5% inflation that year (or so). I got a 2% raise, and found that more insulting than if they had given no raise; even though objectively any positive raise is better than no raise.
I've been living in London and the inflation is just as bad there as back in the US. I'm American working for a US company that just raised a huge Series B. They have the money, so I expected at least 3%. I didn't expect a 10%+, but at _least_ something.
I haven't gotten a raise in probably 10 years. But realistically I make a lot more than most developers where I live (Los Angeles) and there would be no reason for my company to give me a raise when I'm probably the highest paid non-sales person where I work (and often have been). So I'm ok with it.
Just got an extra side gig for 20-25% hours per weeks so it's like getting a 50% raise and feels great.
Although seeing how many $500k jobs exist in Silicon Valley makes me think I should spend more time grinding leetcode.
you know, I'd be very curious what kinds of radical interview approaches teams have considered to break out of the LC mold. A little LC is useful in an interview situation, if an engineer can't do a simple 20-30 line coding problem or reason over the constraints/design space - then there is a good chance that they will need help with core coding in the day to day (which may not be a deal breaker in every employer).
A lot of LC tends to hit on "specialist in LC". We overweight this type of candidate in our interview processes, mainly as "specialist in LC" no longer translates to "highly interested in Comp Sci fundamentals" or "Algorithm expert" - many grind LC just to get a job and promptly forget the fundamentals.
A few interviews that I've seen gaining prominence.
- Code Review interviews. Give a sample code review, and have the candidate provide feedback. I'd love to see this extended with just having the candidate write code review comments in whatever code review tool the company uses - you could then discuss the code review afterwards. Clarify ahead of time the tool that will be used for code review.
- Debugging broken code. Let the candidate show off how they approach dealing with broken/buggy code, clarify ahead of time the language/environment for debugging.
- Build a service/program to a spec via take home. Does the candidate build the system properly? do they exceed expectations? skip requirements? test the code? work double time?
- Given a problem, build a working solution in your IDE of choice.
I'm not even convinced that 5 45 minute to 1 hour interview block is the right size. Why not do a 3 hour time block where the candidate has to build something, then review with them at the end? This is common in interviews with for MBA-type positions.
> if an engineer can't do a simple 20-30 line coding problem or reason over the constraints/design space - then there is a good chance that they will need help with core coding in the day to day.
This isn't my experience, I've found that the number one reason for not doing well on leetcode problems is simply because the candidate hasn't practiced doing leetcode problems. I've known plenty good engineers who, when interviewing with LC style interviews for the first time, fail utterly. Then they realize they just need to practice and did better.
I've been in the industry for around 15 years now, my anecdotal observation is that the average quality of engineers is negatively correlated with the rise of leetcode. 10 years ago the strongest signal was a solid github profile with lots of relevant projects.
That's not to say leetcode is the cause of this decline. The cause is the flood of SWE being rushed into the career as fast as possible (this is why github is no longer a good signal, bootcamps started training their students to create meaningless GH projects just to attempt to create signal).
However I've also seen no indication that leetcode type challenges have any relationship to being a good engineer. I've worked at plenty of places that required pretty tricky leetcode style problems filled with very, very mediocre engineers. Leetcode has become a game that has little to nothing to do with real world programming, in the same way that speed-cubing (solving Rubik's cubes in record time) has absolutely nothing to do with the player's underlying understanding of group theory and combinatorics.
The old fashioned walk through and reason about non-trivial code someone has written is still an excellent method to see how a programmer thinks and if they can code.
"Code review this" or "debug this" or "refactor this" are things that an actual developer doesn't need to do special preparation for as they probably do it almost every day, unlike LC, and should provide a signal more relevant to the job of coding that the candidate is smart and capable of doing good work. Having a bit of code to work with can also take away some stress by reducing the emphasis of typing a complete solution from scratch -- there are many LC interviews where if someone isn't typing right away, they have no hope of solving the problem in their 20-25 minutes of time even if they fully understand the problem and the correct solution.
Take homes can get a bit out of hand because candidates can choose to spend too much time (12 hours on something that "should" take 2 hours) out of desperation (or perhaps simply not having a life) if the primary criterion is the completeness of the solution. I think it works best if the solution or partial solution is used as something to have a conversation about in the next interview. For instance, the applicant can explain their lack of unit tests by providing their reasoning for relying more heavily or entirely on integration tests as the system relies too heavily on an external service.
The challenge with code review/debug/refactor interviews is that they rely on the candidate being familiar with the "this". The original intention of LC interviews was to remove domain specificity from the "this". Prior to LC interviews, candidates would get asked about their familiarity with things like ISO standards, random libraries, or other weird behaviors best learned through memorization. This can be mitigated with candidate prep and/or problem selection, but it's worth keeping an eye on.
For take-homes, I don't think the candidate spending 12 hours on something that should take 2 is necessarily a negative signal - but it's also something that should be considered. If the candidate spent 12 hours ensuring the solution was perfect, then it's probable that they are just thorough - which is a good thing more often than not. You do end up in a quirky situation of judging candidates by how much time they are willing to dedicate to your take-home interview though.
Anecdotally, for the few take-homes that I've done - I've always gone a bit overboard out of pride. Granted, this is also how I approach a lot of coding tasks.. so I guess you get what you test for?
Domain specificity can be mitigated by matching the interview problem(s) with the tech stack that's being hired for. Doing a refactoring of some basic Java code that's not going crazy with annotation processing would be quite reasonable for a job ad seeking to hire someone to do Java development; the same problem can be replicated in Python, JavaScript, etc. to accommodate different skill sets. I wouldn't expect this style of an interview to determine whether one understands the specific gotchas of Django Models if the company is seeking an average developer to do average work for average pay.
The 12 hour vs 2 hour thing is to allow for a degree of normalization, similarly to how it's unclear about what's being considered when 1 applicant spends 3 hours on a LC medium and another spends 30 minutes. Spending an extreme amount of time on take-homes confounds simple pride with someone who's otherwise a bad fit skills-wise but can eventually make up for it with an input of time, something that might not be appreciated after an offer is accepted. Too often companies will refuse to speak further with candidates if even 1 out of 20 test scenarios are not covered just because someone else chose to spend their entire weekend on the problem -- they'll be the same ones complaining about a dev shortage, no doubt.
> Doing a refactoring of some basic Java code that's not going crazy with annotation processing would be quite reasonable for a job ad seeking to hire someone to do Java development
This goes back to the days where job ads would request N years of X experience. The big takeaway from the last ~10 years is that this type of requirement is unnecessary. As an engineer who knows the fundamentals, it's relatively straightforward to pick up a new tech stack.
I wouldn't want to pass on someone who spent the last 5 years working in C because we have a java stack.
>"Build a service/program to a spec via take home."
The problem with this is that the company has no skin in the game. Sadly flakey companies and recruiters are prevalent enough that it's not at all uncommon for a company to ask you to complete their "take home" assignment and then never get back to you. I've had it happen enough that I would simply refuse this now. I think if a company wants you to spend 3-4 hours on their take home project they should pay you for that time.
Anecdotally, as someone who just did a bunch of interviewing, I saw a number of these types of questions instead of super hardcore LC stuff. Particularly the last two. It was a pleasant surprise, as I really struggle with dynamic programming/binary trees/etc.
> But inflation is over 11% since 2020. This isn't an increase. The average tech worker is making less than they were 2 years ago according to the Dice salary report.
Are you buying the average number of used cars and housing? I'm not. My expenses haven't gone up 10% in nominal dollars.
(Related anecdote: people tend to say the economy is bad if they heard it was bad on TV, even if they just got a new job and a raise.)
Assuming your goal is to have a car, your budget should always be accounting for the time when you will need to buy a new car since cars do not last forever.
Same with land. If your goal is to purchase lands, then your budget needs account for increases in the prices of land (specifically the land you want). And healthcare. And education.
Also, my food purchases have definitely increased at least 10% nominally in the past couple years.
The inflation number is specifically high because used cars got expensive due to the chip production supply crunch, it’s not those other things. (Except insofar as those other people want to buy used cars, which some of them do.) You’re reading as if it applied to the entire economy just because you’ve been given a single number.
My rent hasn’t gone up either. Which is kind of weird since I don’t think we have rent control here.
My point is that people feel the way they do because they see their goals become less achievable (even if maybe they were not very achievable in the first place).
You make the best point on this thread I think. Inflation numbers don't really correspond easily to quality of life or day2day expenses, especially if you're making well above what's required to afford the necessities.
Getting a 4% raise on 150k salary in an uneven 8% inflation environment is a genuine meaningful increase, and will have you "keep up" fine in the short/mid term.
>. The cost savings of work from home must have been enormous for these companies
First I agree overall, however I think you overestimate how much any companies saved on the WFH shift.
1. They still own the buildings or leases/mortgages. I doubt many were able to get out of leases which in commercial are usually 3-5year min. Mortgage only goes away if they sold the building.
2. They still have to pay the cost of maintaining the building and facilities while unused in the above cases.
3. Pretty much all companies are using their commercial locations to bloat their balance sheets and secure debt. This is actually a HUGE factor as to why so many companies what WFH to end. They simply cannot get rid of their offices or they would be insolvent based on their finances. You can't throw out 2bil in real estate that is securing 20bil in debt or it would be called in.
4. Many companies were unprepared so they had to pay out the nose the get things setup rapidly for remote workers because they resisted it for so long. Why do you think Zoom blew up so fast?
I think the big savings in real estate came from not having to keep getting more and more space to house all of your new employees. When I worked at a large tech company in SF, they were running up against their limits and just didn't have enough space to house the people they were hiring, so they had to slow hiring.
The smaller startup I worked at also had to get a second office a couple blocks away from the original office.
In the current remote-forward world, while these companies have to keep their existing real estate, they get the benefit of not having grow their real estate portfolio relative to their employee size. I was also told it cost that large tech company 20-30k a year per physical seat in the office. So I'm pretty sure the savings have been decent, even if they didn't dump their office spaces.
> if fortune 500 CEO pay is up less than 11% on avg since 2020
Yeah well, in reality it's up considerably more. They didn't get to be the 0.1% by accepting sub-inflation pay raises for the last 100+ years. Here is what their actual raises were:
19% in 2021, 16% in 2020, ~14% in 2019 & 2018. Sources below.
Meanwhile that's what average hourly wages increased by:
If you want to make your argument, show a profession which has ACTUALLY been getting sub-inflation raises for a decade or more, but you still consider to be overpaid. It's no coincidence that such combination doesn't exist.
A mere 4.1% points difference in their annual pay raises, but it really adds up over the years – pilots started the past decade with lower wages than lawyers, yet ended it much better off. Keeping pace with inflation is extremely important.
I don't think that's a good analogy. The value of a CEO should be relatively well known before hiring into a company. CEOs are rare, and at the endgame of their career, so you're already pricing in the present and future value you think they will add to your company. CEOs generally can't job hop every couple years for a large double digit raise.
Most good engineers(especially early in their career) will be an order of magnitude more productive after a couple years at the same company, as they build up both domain knowledge in their tech space, and institutional knowledge that can't be learned outside of the company. And companies know the value of this experience. That's why you can switch jobs after 2 years for a 20-40% increase. When the market rate for your labor is 1.2x your current salary, I think that's called underpaid.
My point here has nothing to do with CEO pay. Or engineer pay.
My point is that dev pay being off a few percent since 2020 because of high inflation does not by itself decide the question of whether they're overpaid or not.
Patrick Mahomes doesn't get a pay raise adjustment every year for inflation. That doesn't mean his $500m football contract makes him underpaid.
The grandparent comment reads as if devs are underpaid because their pay isn't fully keeping up with some unusual inflation since 2020.
Engineers might not be underpaid due to inflation, but inflation can make them feel underpaid, because they're getting paid less than they were. They see that they're doing the same work as before but getting less for it, and thus the current amount must be too low. The idea that the previous amount was too high is less likely to occur to them.
> I don't think that's a good analogy. The value of a CEO should be relatively well known before hiring into a company. CEOs are rare, and at the endgame of their career, so you're already pricing in the present and future value you think they will add to your company.
Some would say CEOs are paid to increase corporate profits, thus their value is their ability to raise corporate profits.
However, the Kalecki-Levy profit equation (an accounting identity which originated in 1908 and is still accepted as true) makes clear that in aggregate, corporate profits == government deficit.
Thus the single largest driver of corporate profits is not CEO activity, but government fiscal policy.
So CEOs are paid based on what the government does.
Are you pricing in value, or pricing in a specific amount of dollars? Because if you're actually pricing in value, then even though the value stays constant, the dollar amount of the value goes up with inflation.
I agree with your point that regular employees should be expected to get more raises than CEOs, because regular employees can improve more. This doesn't really relate to inflation though, except to the extent they are both factors that lead to raises.
Companies would be smart to chuck in 10% bonus after a year, 20 after 2 etc. to 50 after 5 and lock that in at hiring time. Like you say: domain knowledge. You would end up with smaller more productive and happy teams. In addition pay increases to market.
Asking too much? “Waaah! It is really hard to find good developers” is a stuck record on loop since 2016 at least
> if fortune 500 CEO pay is up less than 11% on avg since 2020
It's up a /lot/ more than that! And what do you know, they're also not underpaid. The former will predict the latter pretty damn well, I think you'll find. So yes, strictly speaking, annual raises and having the market power to command meaningful ones do actually have everything to do with being over/under paid.
I'm not making a statement of fact about CEO pay since 2020. I'm saying that whether or not it's up by more or less than inflation since then has nothing to do with them being fundamentally overpaid.
Apply this to dev pay as well. Just because you're a few % off since 2020 after inflation does not mean $300k salaries are overpaid or that they're appropriate. They're two unconnected data points.
If you don't have the market power to have garnered a good pay increase over the past 2 years of record profits you're almost certainly underpaid, like teachers, nurses etc. If you got massive pay increases you're almost certainly overpaid, like CEOs.
The connection is right there. Maybe these two things could somehow become disjointed but they really don't appear to be such in any meaningful way in the current economy.
there's two "meaning" to being underpaid; 1) the work being done is captured by another party, and thus underpaid to the worker doing the work. An extreme example is slavery - they are underpaid.
2) the second meaning of underpaid is the perception from other people that the profession is producing value for society, but the payer of that work (usually tax payers) is not compensating for the value dispersed throughout society. Examples might be teachers.
I can understand the first notion: the 'price' offered is not enough to clear the market. In your example, there are fewer people who voluntarily would be doing slave labour for slave wages, than willing employers.
The second is a bit nebulous. I think it's mostly down to social desirability bias: people say stuff that sounds good, but doesn't make much sense.
> The cost savings of work from home must have been enormous for these companies, yet none of that savings or record profits trickled down to the people writing code
Lots of companies had long term leases or obligations anyway. Eventually the 'cost savings' were probably there, but I don't know too many companies that were just able to jettison their initial lease payments in the first few months of the pandemic. I know I couldn't quickly get out of my office lease.
> Many companies posted record growth and profits over the pandemic, but still give out paltry 3-5% raises every year.
A few disconnected points:
As we're seeing, some of that growth was temporary. Between inflation and growth, record profits is expected from any company not in decline. Allocating profits from growth to more growth is a reasonable choice. There's no reason for wages to track profits. Wages are driven by the labor market; profits just act as a wage ceiling.
It's not a secret that tech companies underpay their employees and bank on them being too complacent to go through the interview gauntlet yet again.
Remove the word tech, and you basically have it right. Why would companies whose goal is to maximize profit pay more than they have to? There is little incentive for companies to pay more than required to meet their needs.
That's not strictly true. If the average is dropped down by an increasingly large share of new joiners at entry level, you might see the average raise exceed 11% while the average comp level is raised only to 6.9%
Raises are often somewhat small, but job changes can be pretty hefty. And it's better than most positions by fair margin.
Factoring in the rise in home prices as well as the dramatic collapse of everyones stock portfolios, 11% inflation only scratches the surface of our problems...
Did they fail because they couldn't solve an algorithm? Or was it due to something else - e.g. soft skills, solving without explaining your thought process, system design, behavioral questions.
Algorithms are only one part of an interview. I wouldn't hire someone who was rude or condescending, regardless of how fast they can write an O(n) solution.
It’s just the raw scope of what can be asked. The interviewer doesn’t care if you’re an expert in standard structures like red black trees, doubly linked lists, min max heaps - or even hash tables - when they’ve got a obsession with scanning Wikipedia for articles on Tries and Topological sort because their self proclaimed 10x engineer spirits believe their Log(n) spellcheckers are gonna replace elastic search
Yeah that's what I want to know. If I ace 100% of the algorithmic questions, in real time during the interview, like flawless and pure, actual perfection in real life,[1] can I fuck up at the parts I've been conditioned under torture to fuck up on and still get the job? Nail it and nail it and nail it, do they help me out?
Like Michael O'Church talked about a company hiring a software engineer and another hiring a manager, and he and the engineer A/B testing trying to get hired as an engineer or as a manager. And in the interview, they wanted him to come up with the golden algorithm that took them months and was their hot shit with which they would win big, they wanted that in an hour. Actually less, you couldn't solve it in minute 59 without coming up with incremental steps to "show progress" as if that weren't counterproductive. So like 4 minutes, Michael O'Church lied through his teeth in favor of these guy's patience. 4 minutes of silence and it's over. And because he couldn't do it that's when they started discounting points, like you start at 100 and then get knocked points for not having gone to Stanford (or Berkeley as he puts it, but you still get discounted for Berkeley in reality), then more demerits for every flaw, negging over and over. Always communicating it's the engineer's fault he's treated like shit.
Whereas for applying to manager (which in many ways was more honest, it was arguable, he just hadn't been formally promoted with actual employees with a wage, he just pretended he had and had the knowledge to back it up), with applying to manager, he started at like 80 points and everything he did well added points to his value, they saw him as an ally. Against the software engineer, against his own alternate self, whom they treated as the subordinate, like enemy slash slave.
So that story I don't know how to judge, I don't have enough visibility on Michael O'Church and I have very negative opinions about a lot of his thoughts. But that's not the question. The question is, if I do crack the golden algorithm that took them months right then and there, in the heat of the moment under time pressure, in the interview, under adversarial circumstances, all of that, in the four minutes they actually give you without acting impatient, if I DO not if I don't IF I DO will that get me human dignity and a wage? Or will they still reject me because I'm not submissive, which I can never again be after standing up to torture?
[1] So what this means is, suppose a chess player is at a crossroads, and thinks for a minute. And from that point on, plays perfectly until checkmate. Every move correct. Saying I don't do it perfectly would be like saying the chess player didn't play perfectly because he didn't lay the pieces in the exact geometric center of the square when he moved them. I get every algorithm interviewer to say "what the fuck", "did you hear it before?" "that was fast" But it's never enough. Best job I had was $20 an hour, dream job, as a handyman, construction. Dream job. I got promoted into software, and was quickly fired.
Managers are primates first, mathematicians a distant second. They talk about being mathematicians a lot, like a lot, they pretend it's all about the bottom line, but no. It's about dominance, being alpha, a guy who stood up to torture is an alpha challenger, no hire, no matter what he can bring to the company. Mathematics is a distant distant second.
Inflation is targeted to be around 2% per year on average and that 11% number you threw out without any source or reference is wildly inaccurate. Here's the real inflation: https://fred.stlouisfed.org/series/FPCPITOTLZGUSA
> The cost savings of work from home must have been enormous for these companies
It would have been if they had shut down the offices, but they've paying rent and heating/cooling costs on completely empty buildings for years now because they hold out hope they can drag people back.
A solid article, but it should have commented on single family home prices. If you use the 3x salary rule, a $120k a year techie couldn't afford the median home price in America ($374k). A software engineer in San Francisco would have to make $526k a year in cold hard cash to reasonably afford the median single family home ($1.58 million).
Talking about six figure salaries as if they are unquestionably upper-middle class should take housing prices into account.
Median household incomes to home price ratios have risen to ~8x across the US as a whole , not just crazy house price areas like SF/NYC. Canada and Australia are far worse again, pushing 15x in some cities.
3x, if it ever was a rule, has been dead for a long long time.
Just crunched the numbers, and an 8x mortgage would exceed my monthly take home.
I felt pretty uncomfortable at 2.5x. I feel a lot of people are probably extending out to 4 or even 5, but 8 would be irresponsible and I doubt you could even find a lender for that.
Damn, I completely misunderstood what you were saying, sorry!
For some reason I was reading the comment that the average homebuyer is paying 8x their salary for a house. What you've been comparing are median incomes to sales prices. A useful indicator, but not capturing what people are actually paying - it is entirely possible the 'medians' are priced out, especially with such constrained supply.
That makes me feel way less crazy now... apologies again.
Even though as you said it's "not capturing what people are actually paying" it's related, and still horrifying to me, as a measure of overall housing affordability. Esp when you look at places like vancouver, sydney, melbourne.... At 10x I cant understand how the market keeps going - how do home ownership rates stay so high? how are people affording these multiples? It just doesnt make sense to me how it can keep going. To your point this measure includes the people who cant afford to buy at all , but theres still enough ownership % overall that it doesnt add up to me.
A 5x mortgage over gross pay should be just over 30% of monthly gross take home. Maybe too much for some, but not absolutely irresponsible - especially if you choose to stay in a stable housing market.
2.5x is completely ridiculous to expect - that’s going to be far below rental payments in most places that anybody would want to live. Its definitely not the norm. It’s obtainable in some areas of the northeast like Pittsburgh and the Midwest. But usually the catch is property taxes are outrageous.
It's really hard to compare because of how rates doubled in a period of 2 months.
At today's rates, which I'll enter at 5.2%,
A person making 200k at 8x is buying a house worth 1.6 million dollars.
Assuming a 320k down payment(ha), 20k in taxes, and 5k in insurance, the monthly payment comes out to over 9000 a month. I don't think anyone in CA at 200k is taking home that much monthly, but maybe my math is off.
I think 2.5x is also probably not the norm, but I'm extremely conservative with money and what I went with.
4 or 5 I can believe, but in today's market with today's rates, I can't see how 8x is even possible.
> 2.5x is completely ridiculous to expect - that’s going to be far below rental payments in most places that anybody would want to live. Its definitely not the norm. It’s obtainable in some areas of the northeast like Pittsburgh and the Midwest. But usually the catch is property taxes are outrageous.
The funny thing is: you just explained why property taxes are basically 'free'. (They are basically the best tax. Tweaking them to include only the value of the land, and not the house makes them even better.)
Basically, supply and demand in the housing market determine the sum of property taxes plus mortgage payments. If property taxes fall, real estate prices increase until the sum is the same as before.
If property taxes increase, real estate prices decrease accordingly.
Of course, existing property owners will feel the changes in price. But for someone young or from outside the area, who doesn't already own property, areas with high and low property taxes cost the same amount to live in.
The area with high property taxes can either spend more on public infrastructure or lower other taxes.
In the long run, all of society is made up of people who don't live yet today.
In the short run, votes are mostly cast by people alive now, many of them owning property.
That is not true. Property taxes are based on relative property values within a region such as a county or school district. Here in NY, appraisals are done at the county level and then that determines the amount you pay to the school district, town, county, etc. If budgets don’t increase, then your property tax stays the same even if your house is worth more. There are towns in my area with 1 million dollar houses that pay half the tax of a 500k house the next town over, because the town/school district tax gets spilt among the very valuable houses in that district. Whereas the poorer folks next door have to shoulder their tax burden among their less valuable homes.
Oh, that's weird. I assumed property tax was set at a fixed percentage of home value per year?
Thanks for explaining!
Though to be clear, most of what I explained still applies: if you are looking to buy real estate, the expected burden of property taxes will already be baked into the market price. Almost no matter how the taxes are set.
Yes it is true. Basically the formula for your taxes are (appraised home value / total appraised value of all houses in the town) * budget of the town. The market does absolutely take it in effect, like I said, towns with lower taxes sometimes become wealthy enclaves were people will drop 2 mil on a house and then have basically no taxes. My only issue with the system is it winds up being regressive sometimes because the wealthier an area is the lower the taxes tend to be.
but total cost of home ownership is supposed to be 33% of take home. how do you pay electric, gas, internet, trash, water, sewer, umbrella insurance, AND routine maintenance on just 3%?
Utilities normally wouldn’t be included in the 33% of take home rule - the 33% rule applies to renting an apartment too, where most of the items you listed except trash are also separate costs not included in the 33%. (Also the 1/3 rule is of gross income not take home.)
I'm not saying it makes up for the difference in the arguments, but please note that people seem to be talking past each other in this thread by talking about home price to income ratios and mortgage to income ratios without making a distinction.
I'm at 2.8x and no sir, I don't like it. At least I got 2.75% on my mortgage. Though I have a feeling we're heading back to 2008ish levels of job insecurity so maybe I'll end up homeless after all.
Prior to a recent promotion I was at ~6.7x. I still had some frivolous spending on going out and such, but I’m a bachelor. This was also before the recent inflation rise. Now I’m at 5x. Do I feel comfortable? Mostly… I work for the government so I’m not worried about losing my job, but rising inflation has eroded away the safety buffer I hoped to have with the increased salary. I’m concerned about how an expensive emergency situation could affect me.
Take, like 30 cash-rich buyers chasing 25 available homes in a given year. That sets the value of hundreds of thousands of homes in the metro area. All those homeowners now have a ton of equity that they throw around in their subsequent purchases.
That doesn't mean "everyone" is spending huge multiples of their salary in cash, it just means a handful of people did. The rest rode the wave of equity.
My gut reaction was also “what kind of outdated rule is this?” until I realized that I accidentally followed the 3x rule almost to the dollar in buying my house. And I have to say, I feel extremely comfortable with the results, so I would recommend it.
A price to salary ratio doesn't make a lot of sense because it ignores interest rates.
At today's interest rates, which are still historically low even though they increased last year, 3x is unusually conservative.
The better rule of thumb is to keep housing expenses under a certain percentage of gross income. 28% and 30% are common number that get mentioned in that context.
Why gross income and not net income? Because two people with the same gross income might have very different tax situations and their net income could be very different. So, of course you also need to consider what percent of your net income your housing costs represent -- these are all just rules of thumb.
Funny enough my first and only house was actually very close to 3x income at the time I bought it 10ish years ago and everything real estate seems crazy to me now...
Now that value delivered is disconnected from location, live somewhere inexpensive and push for your actual value. The only real requirement is US friendly timezones and 10+Mbps up speed internet. I'm sure there are 100s of cities in America that meet this expectation and would make you "rich" in that locale with a $200k TC .
Choosing to live somewhere for the "lifestyle" is in itself a form of expenditure for which your employer should neither be subsidizing nor penalizing.
I hope that is what happens. So far only a few companies are giving up fully on pay being linked to COL. Even so, flexible work (1-2 days in office a week) is currently revitalizing parts of New York as people move twice as far from the office, drastically reducing housing payments, while keeping the same pay and same total commute time.
Why would a single person need to buy a 3 bedroom home (the median American home size)? A household with two $120k earners can very comfortably afford a $1 million home at current mortgage rates.
Mortgages are leverage, but unlike traditional financial leverage not subject to margin calls. Normally high leverage is risky in trading, because small perturbations in price can force liquidations.
However with a traditional mortgage, as long as you keep making payments you cannot be forced to sell. (In fact it's even better, you can always re-finance when rates improve, whereas the bank cannot raise rates on you when they worsen.) Therefore all you care about is the return to the asset over the long-run. And absent maybe a once-in-a-century depression, there's no way a single family home will decline in price over 20+ years.
Mortgages are not just leverage. They also lock in your cost of housing.
For example, people who rent in major cities have seen their rents increase by 30% or more over the past few years. Housing prices have also gone up by that much.
On the other hand, someone who bought a home a few years ago has not seen their monthly payment change -- and it will not change for 30 years if they got a fixed-rate mortgage! In the next few decades, their mortgage payment will be increasingly smaller in real terms due to inflation and will eventually be substantially lower than the rent for a similar home.
2 people earning $120k each have a monthly pre-tax income of $20k. They can easily afford a million-dollar home, and the property tax (~11-12k per year), in the San Francisco area. The problem is, a home that cost a million dollars 2 years ago now costs $1.3 million.
It still sounds insane to me, I've made an assumption anyone with a $1M home (or above) is either carrying much less via down payment or is in the $4-500k / yr range.
Most responses on an assumption that, inflation adjusted, housing prices only rise. For many areas this is not true, the bay might not be one of them, it is probably even more localized for the areas that are more protected from downturns.
From your example, a house would be around $5.5k/month before maintenance / capital costs on take home of ?12-14k?. Seems rough, especially if one of those salaries is lost or degrades.
It is all perspective though, we're used to lots of space and size. My normal is other people's insane.
I'm single and bought a $350k 3 bedroom when I was making around $130k. I bought the home because the city I lived in at the time (Austin) had banned townhouses/duplexes/etc so my only option was to rent in a midrise, rent a home, or buy. I wanted a townhouse downtown, not a SFH in the suburbs.
Unfortunately I sold said home at the beginning of 2019 and have watched it essentially double in value over the last two years.
1. A single person likes to have guests stay over and wants to offer them a room and also have a home office for working from home
2. There are no "starter" homes available in their area. This is what my spouse and I hit in Los Angeles. We tried a condo and ended up suing the person who sold it to us because it was so noisy as to be unlivable. (And it turns out most of the condos in the area are like that.) But there were no small homes available on the market to purchase. When one did show up, they were usually purchased immediately for cash for more than asking price, torn down, and a new home built lot-line to lot-line put in its place and sold for 3x the cost. Eventually, I got some bonuses that allowed us to purchase a larger home so we did that. Now we have a guest room and an office which has worked out great during the pandemic. I'm really glad we did it.
3x rule is not a rule but a guideline. It applies more to the average person.
If you give someone 100 dollars a day they have to buy food, clothes, rent, education, transportation. You give them 1000 dollars a day they still have to buy the same things. They can then use this leftover to buy nicer food or nicer house. This is why values of homes can get so high in areas. For the people getting 1000 they chose where ti spend this extra money. For people with 100 a day they don’t have extras to reallocate towards rent.
5.25 joint salary, though, so that could be as high as 11.5 times one person's salary for one house if you're buying together (they may have a slightly different calculation when combining salary).
And indeed my house, but not the mortgage, was well over 10 times my salary when I bought it. The mortgage was around 8 times my (entry level UK) salary, but about half that if you counted both of us.
Which is one route to how people end up in serious trouble: get a mortgage as newlyweds with 8 times one person's salary, then one person stops working for The standard post-marriage activity: kids, and now you have a house you could never have passed the affordability checks for, as well as a very expensive baby. Then interest rates rise. Game over. Luckily for lots of people, interest rates have been miniscule for a while, but I get the feeling that there's a lot of people on the edge.
Technically, but that's moot as there's two incomes so not really what we're discussing. And the only way that happened is because your partner earns the same as you.
People used to be be able to easily afford houses on a single income. My old boss, for example, bought a house alone when he was 25 and rented out a room. And that was back when tech salaries were low, especially in the UK where it was viewed as a perfectly normal job and no better paid than, say, a teacher.
That's just not really possible these days, a 25-year old teacher could never buy a half decent 3 bed house alone.
That what I mean. The "borrow 3-5ish times your household salary" hasn't changed that drastically (especially considering interest rates have been fairly low). What has changed is that the baseline is borrowing that multiple of two salaries to buy the same house.
In UK you always get a fixed rate for X number of years, then it automatically move to variable(but at that point you'd just remortgage again). Like we're on a 1.29% 5-year fixed mortgage, but the whole thing is 20 years long. But after 5 years we'll just remortgage again on new terms.
We also could have had 1.12% I think, if we increased our LVT to like 60%, but I didn't have the cash to do that at the time. It was in September 2021, so basically the historically lowest interest rates time in UK, ever - we were quite lucky to be remortgaging at that point. My sister is just getting a mortgage herself now and the lowest she can find is about 3% for 5-year fixed mortgage.
Where it goes wrong is when you remortgage in a higher rate regime, and the bank won't give you a new fixed mortgage to cover your remaining capital. Now you're stuck on the "punishment" variable rate you get when you don't remortgage.
you don't "always". The mortgage industry has a long history of different optimal strategies given different scenarios. For example, overpayment and payment holidays without incurring penalties used to be features only available on tracker mortgages. Discounted (yet still fluctuating) rates used to be effective.
Fixed rate mortgages are popular with people that don't want to take on the risk of payment fluctuation as well as in economic environments such as today.
In the UK even fixed rate mortgages are only fixed for the first couple of years, which wasn't so bad as rates were decreasing, but obviously things might change in the next couple of years.
My partner and I earn dissimilar amounts (I earn more than double what she does) so we are borrowing only what can be covered on her wages which is about a third of what the bank will actually lend us (a frankly eye watering amount).
We don't want to be in a situation where I have to earn what I do now forever to cover the mortgage and doing the above would allow me to take a 50% paycut and still comfortably pay all the bills.
The houses we are looking at decent size in a nice area with good sized gardens, what the hell more do we need, there are only 3 of us, a 3 or 4 bed is just fine.
We are effectively borrowing about x2 our household income not the 5.whatever the bank would lend.
> It's a rule of thumb that your total debt should not exceed 1/3 of your income.
Unless tax deductions work very different in the US than they do in Denmark, that is pretty bad advice.
Here, sitting on a 60% mortgage loan that is many times higher than your annual income is genuinely a good idea for most people because of tax law. It’s not until you have assets that are worth more than your house that it becomes a good idea to pay off the entire loan.
Meanwhile having even a small “quickloan” that is 0.1% of your annual income is a very stupid idea.
I mean, if you don’t know finance at all then maybe it’s a good rule of thumb as you’ll never bury yourself in debt, but loans aren’t just loans.
I've never heard total debt should be 1/3 of income. Having a mortgage completely blows that up. Nevermind student loans, a car, or getting a credit card.
I've heard that monthly housing shouldn't be more than 1/3 monthly take home. Is that what you're thinking?
> I've never heard total debt should be 1/3 of income. Having a mortgage completely blows that up. Nevermind student loans, a car, or getting a credit card.
I think you mean 3x of your income, not 1/3 of your income. If it was 1/3, then someone making 100k would only be able to get a mortgage loan of 33k...
Or are you saying payments on debt (mortgage payments)?
When I've heard this before it was about mortgage payments. The general idea being the money you make is broken up into thirds with the gov getting a third in taxes, the mortgage payment getting a third, and living/saving from the final third.
It used to be that the average monthly payment on housing would go up to around 25% of your spendable income, at least that was what the government used as a guideline. These days you need over 40% to even get anywhere and even that is unlikely to be enough. I've also noted around here the required income went from about 3-3.5 to around 5 times the rent rate despite that meaning you need a 6+ figure income for even the most basic apartments (which is rare here) which is just risk reduction for the owner.
Also checkout the "rule of 72" if this stuff tickles you. It is also a rough estimate that gets used in place of more complex formulas. (Actually closer to 69/70 but 72 makes things cleaner)
The 72 is optimised, it seems to me, for annual compounding with percentages from 5% to 10% (as ln(2)/ln(1.08)*8 = 72.051746736), while, as you point out correctly, ln(2) = 0.69314718, so for continuous compounding 69 would be better indeed.
I personally wish there is a healthier supply of modern housing in these attractive workplaces. Places like SF/NY/LA has atrocious rent and that’s okay if housing quality on average is okay but a lot of these buildings are 100+ years old, barely maintained or a new cash grab apartment complex that’s marketed as luxurious but look an inch deeper and you could tell these developers hardly spent time nor money knowing they get away with shoddy quality apartments. What’s the point of getting paid six figures when your office is higher quality and aesthetically pleasing than your own house.
The solution to all of this is a simpler zoning law at the federal / state level that allows competent developers to win in all markets. City level zoning laws prohibits the best developer from scaling and artificially creates cost for developers that care. How come there isn’t a household name akin to Apple for apartment development? I want to be able to stick to one amazing developer for a consistent experience across multiple markets especially now that remote work is becoming a permanent option for multiple developers.
I have a sibling that lives in Japan. They live 10 min away from downtown Osaka by train, their rent is $1100 a month, it’s not large but the apartment is extremely functional, space efficiently utilized for plenty of storage and rooms. There’s also a giant green park in the middle of the complex with a foot bath. They also talk about the developer and boasts about their brand. Their family makes 1/5 my salary but I still feel like they’re living the wealthier life.
Please we could start in California: More housing supply, Let the best developer win and scale, normalize old building tear downs.
> How come there isn’t a household name akin to Apple for apartment development?
Because real estate development is capital-intensive on a fairly unique scale and it's very easy even for good developers to go under. It also doesn't scale in the same way because builders are subject to all of the tax and regulatory implications of each market they're in.
They go bankrupt all the time due to market forces outside of their control. Just look at the price of lumber over the last couple of years. Markets can move more quickly than builders can react because big projects can take years and building supplies can double in price in a matter of months.
> I want to be able to stick to one amazing developer for a consistent experience across multiple markets especially now that remote work is becoming a permanent option for multiple developers.
I don't how realistic a vision this is because it's not like developers that dominate a market are inherently incentivized to do good work. In fact, demand is so crazy for builders that getting good work done at all is becoming harder and harder.
Yeah I think the idea was to have a proper functioning market in which a dominant player gains their position through directly winning over and maintaining customers
It also makes us Europeans feel underpaid :) I have 20 years of experience and don't even make six figures. $350000 base pay sounds like a different world.
Exactly my thought when I read the title. I know the cost of living is higher in US but I'm always baffled by how much tech workers make on the other side of the pond. To me it sounds like a dream.
Cost of living in the US is weird. When I am in the US, I don't feel poor as long as I do what 'regular Europeans' are doing. I could go to Whole Foods and pay a small fortune for bread, but as long as I go to Aldi prices are quite European for me. There are many ways to spend lots of money, you can find restaurants where you can spend your weekly income for a family meal, but fast food and fast casual restaurants are not more expensive than in Europe. Houses (outside metropolitan areas) and cars are often ridiculously cheap.
And then there are some things that are just insanely expensive from a European perspective: out-of-pocket medical expenses, college, lawyers, cable TV... makes it very hard to compare.
I have to post this every time we talk about salary and Europeans get in on the convo. This forum is absolutely DOMINATED by SF/LA/Seattle SWEs. Their cost of living is extremely high and their salaries are extremely high.
The US is huge.
I work in the Southeast. Where I'm working Junior SWEs start around 60k. Mid Level Start Around 75k. Senior start around 95k. Manager/Our new "Super Senior" level start around 120k.
Our cost of living is still higher than yours. In my area a 3 bed/2 bath home with a small yard within 1 hour drive of my work costs 450k minimum and that would be a full hour out and the siding would be vinyl.
We have horrible public services, many of us are in debt to have obtained our CS degrees, child care is soo expensive, healthcare is crazy expensive even after we get our employer healthcare plans. Going to a local soccer match costs me $50 for nosebleed tickets, a beer is $14, and nachos are $15. Parking costs me $25 at the game and you have to pay for gas here too which is close to $5 a gallon(but keep in mind we drive further, to EVERYTHING, and owning a car is a requirement unless you're in NYC or SF).
I just want to represent for what is probably the majority of US SWE's.
I think you are misrepresenting in the other direction (ie posting salaries that are unrepresentative in the low direction).
Just out of a job hunt and had two offers in Atlanta, one in person with a TC of $180k and one fully remote with a TC of $235k. This is with 2 YoE
The costs you post also seem really high. Atlanta United tickets are $35 for the cheapest, food/drink is around $25 total. I generally would take transit or uber into games but I see parking for $10-20 within a half mile. I'm not as familiar with housing costs but a few quick searches show 3 bed/2 bath in decent neighborhoods for around $500k, and to be within an hour of Atlanta is definitely doable for less.
I think Atlanta is fairly high CoL for the Southeast and still find the expenses to be less than you're claiming
I'm in Nashville. Our salaries seem to be the same or lower than ATL and our cost of living is for sure higher. I think we are getting a bad deal here compared to ATL.
It's possible that I am hilariously underpaid and need a new job.
> It's possible that I am hilariously underpaid and need a new job.
If you're willing to work remotely, then absolutely. :) There are plenty of fully remote jobs in the US paying $180k+. I interviewed at all sorts of random companies last year (all remote), and the lowest offer I got was $150k (plus equity). For reference, most of them were senior frontend engineer positions, but there were some generalist gigs in there as well.
To be fair, 200k+ isn't the norm outside of the FAANGs, but 100k for an experienced dev is achievable almost anywhere in the US, including places with very low cost of living. Many of the southern states have very low/no income tax, extremely cheap land/housing/food, and great weather.
I live in a major US housing market. I want to get a bigger house for my family. Realistically, we're talking $1.2M to do so. That feels so crazy, given I grew up in a $150K house. Suddenly you feel compelled to do whatever it takes to make $400K/yr so you can buy a 3 bedroom house.
No it's not. I wish it were. At my prior job the leadership, all the way to the top, made it uncomfortable for non-Indians to work there. They'd bring people over from India, hold the H1B over their heads, and work the crap out of them. They weren't happy from what I could tell, and most non-Indians left by the time I also did.
And from what I gather that's not an isolated incident.
I have no clue about formal studies, but the fact that many profit maximizing companies are trying to push people back to the office is at least a hint that there might be something in it for them?
Especially since most rank-and-file employees seem to prefer WFH, we can assume that the push back to the office isn't a boondoggle for them. Just the opposite.
Companies are competing fiercely for labour. Wages in the tech sector are really high compared to the rest of the economy. Offering the option of WFH is a major draw for many people. There's not much regulatory intervention either way (and if anything it's in the direction of making offices more cumbersome to run). Office space also costs a lot of money to lease or buy and to run.
So there's lots and lots of market pressure on companies to figure out how to make WFH work.
Just like moving from artisanal workshops to factories required major re-organisations of how work is done, and how companies also needed to re-organise their white collar work to really reap the rewards of moving from paper shuffling to Word/Outlook/Excel jockeying, I expect WFH to be no different.
Not all production of physical goods moved to factories. I expect at least some in-office work to remain.
I don't know to what extent existing companies will be able to fully capitalise on WFH, and to what extent this will need newly founded companies.
(From my personal experience, I can tell you that everyone in a team being remote seems to work well enough, but if you are the only guy working from home in timezone X and the rest of the team is mostly working from the office in timezone X-6, that doesn't work so well.
But that's a much more extreme case than what most employees are asking to keep.)
In any case, because of all the factors I outlined in the third paragraph, I expect WFH vs in-office work to shake out in a fairly free market way over the next few years.
20 years here too, UK, I've finally broken the 6 digit bar but I had to move to contracting.
My experience made getting job offers simple, but no one wanted to pay more. I'd often get lowballs with the offer of kudos for working at that tech firm.
£95k seems to be the upper limit at this point here for FTEs.
£95k is very decent in the countryside but in London that's nothing to write home about, is it? I don't live in London or even the UK, so my statement is just based on friends living there.
£95k would be exceptionally good for the vast majority of the UK, and unless you’re trying to buy a house in central London or something it would still be a very good wage there too. Take the last bit with a pinch of salt though—I’ve never lived in London but a number of my friends do.
US taxes are similar to UK taxes, particularly in california. Putting £95k into Salary Calculator [0] says you take home ~67% of your salary after taxes. £95k is ~$120k today, and putting that into this [1] calculator says you take home ~64% of your salary.
A common American complaint is "subsidizing" European defense off of our tax dollars.
America is also a big spread out place so maintaining it is more expensive than small Euro countries.
On my first point, I think we get a rather strategic advantage from being the "Western" police. However I'm just explaining a common critique you'll hear.
Other states might end up having similar tax rates, i was just curious what made Californias so high. If that is mostly federal income tax then never mind!
I've no idea what the breakdown of federal vs state tax is sorry, and I actually don't even know how to find out. I'm just a european engineer that has genuinely looked into moving and picked california as a point of reference purely due to the high salaries and QOL factors.
This is why NATO countries need to work harder to meet the 2% defense investment guideline. US citizens are basically paying for the safety of everyone else.
I don't think you are either. It's funny but after hearing about the complete lack of protections for employment in the US, I think I may get better protections here as a contractor.
Those would also be quite uncommon, but I have seen them. Usually for Oracle or someone I wouldnt want to go with. Most tech lead roles I've seen topped out at £90k.
£100K should be bare minimum for a software engineer with a few years of experience in central London in 2022.
3 bed terraced houses with access to good schools, 50-60 minutes out central, sell for £1M, so if you're entering the area want a family you really want a household income of £200K+.
Something is very wrong with the UK housing market. It is completely detached from reality, usually because NIMBYS still manage to block new houses from getting built.
It's changing now as land that was allocated for housing usually gets central government overriding permission to local authorities.
The process is currently:
- Building company submit plans for housing
- NIMBYS reject it because it's a flood plain. (They always magically become flood plains)
- Building company submit alternative plans that are much nicer, give a lot more to the community and build public services.
- NIMBYS get it rejected again
- Building firm go to central government and just get approval for massive housing development which is most worse that the original plan.
Hopefully all these additional houses will reduce the pressure on the housing market but we are hundreds of thousand houses short of required stock for our current population. We have people living long term in hotels because the government can't make them homeless.
Our CEO makes 120.000 € a year. Revenue about 2.000.000 €
There are employees that make more than him, but no one is close to 200.000 €. Personal is our biggest expense.
I earn a decent living and can afford a house and two kids and a stay at home wife in Central Europe with 74.000 € (Project Manager / DevOp / Admin).
Cost of living must be insanely high in the U.S. For me, these numbers are so high - I can't imagen what someone would do with all this money.
It's really not, especially if you have good health insurance through work. You can splurge and live life on a grand scale, or sock away generational wealth on American tech salaries.
> Cost of living must be insanely high in the U.S. For me, these numbers are so high - I can't imagen what someone would do with all this money.
First is secure yourself with fuck you money so you do not need to sell your labor to procure the things you want, especially shelter (land), food, water, energy, healthcare, and education.
Second is play the game against other high earners. Get involved in other businesses or politics, etc.
There are tax reasons for lowish CEO pay. You get income just up to the highest tax bracket (~120000 eur for married single income in Germany) and funnel the rest through dividends into a holding entity.
In 2021, Saudi Aramco had a net income of $200 Bn., on a $622 Bn. revenue.
With 66800 employees, that comes to almost $3M / employee in net income. A quick google search seems to yield that avg. salary at Saudi Aramco is around $130k.
If that were true, companies would be going out of business, but instead they're thriving. Why are Europeans so underpaid? Are their tech companies not thriving?
Scale and culture. For scale, see https://blog.pragmaticengineer.com/software-engineering-sala... for more. There just isn't a lot of money in only a local market, and trying to accommodate a dozen countries worth of languages, culture and standards is far more difficult than one.
For culture, a lot of European countries feel it is justified developers earn similar to other white collar jobs. It doesn't have the "heightened" status I often feel the US seems to give developers. Other white collar jobs don't really earn a lot either. Tech jobs kind of stop growing at senior, and require pivoting into management at least partially for higher income. Speaking of management, it is kind of unheard to earn more than your manager, unless you solidly outrank them in seniority. As a result, whatever the manager is paid, forms a tight glass ceiling for oneself.
Less offer, similar demand. European tech companies could pay more, but they don't need to because they don't compete as much for workers. If you ask for more they have no trouble finding someone else who will take it.
My experience has been that there's this massive cliff - if you can get into a company that's got a strong US attitude towards Tech salaries you can 2-5x your salary. That basically means do the same job but work for either a FANG style company, or work in some parts of Finance (easy to do in London). Someone of my experience (10 years exp) working in an average software company in the UK is probably earning 50-70k. By moving into Finance I'm now doing the same job for closer to 400k,and I'm not paid incredibly well compared to my US counterparts. It's just absurd.
Be aware that if you include the taxes and mandatory insurances you have to pay (and your employer has to pay), you'd usually pass the six figures easily.
It's easy to be a millionaire if the state takes fuck all from the paycheck.
Sure, but things like health insurance can easily cost $1000+ a month if you want full coverage and/or have some bad health conditions(and you still need to have a big pot of savings in case you need to use it, because your out of pocket excess might be 10k or more). In most european countries the monthly cost is nowhere near that, it scales with your salary(down to zero if you don't earn anything) and still covers you for absolutely everything and of course there is no such thing as copay or excess. Not to mention that Americans are swimming in student debt, while in many European countries higher education is completely free, or nearly free so you simply don't have that expense at all.
Obviously once you start making 300k+ in US none of that really matters, you win at life in general - but it's not like people in Europe making 60k(euro) as software devs are in poverty or anything.
> Sure, but things like health insurance can easily cost $1000+ a month
I've posted this multiple times before, but a developer on $120k, paying $2500/month on rent and $1k on health insurance in california will have more left over at that point than a mid level engineer makes before tax in the UK. That gap is inexplainable by anything other than "You get paid a crap ton more"
> Obviously once you start making 300k+ in US none of that really matters, you win at life in general - but it's not like people in Europe making 60k(euro) as software devs are in poverty or anything.
Honestly, it doesn't matter at half of that, but the second part of your comment is bang on the money. I wouldn't take a tripling of my salary for a move to the US, for example.
> but things like health insurance can easily cost $1000+ a month if you want full coverage
Yeah but if you multiple that by 12, you get something like $12k, or $15k for argument's sake. That $15k does not explain the disparity between a €55k/yr salary and a $150k/yr salary, so clearly there is another force that is at play here.
People in almost all tech companies are not going to be paying $1000 a month for insurance. I know self employed people paying less than that for a family of 4.
My wife pays a little more then $200 a paycheck for a family of 4 for a non high deductible plan. At my worst job it would’ve been $700 for a family of 4 with a $100 spousal surcharge (only if they could get other insurance through their work).
Get a remote job where they pay California rates no matter your location [1] [2] [3]. It's the new way for companies to stand out and attract global top talent.
That works if you live in US, but considering if you are 10 hours ahead of California your life will turned literally upside down if you work remotely for Cali company.
These threads always make me sad. Even an entry-level position in the US makes more money than I do. There doesn't seem to be much competition here. I do get a lot of recruiting emails but most of them just ignore me after I mention my current salary. Granted, I am very fortunate to make 100000€ a year (mostly stock so varies a lot)
Working remotely for a US company would be one option but there is a massive time zone difference. Also, the recruiting messages from US companies (e.g. Turing) seemed to treat Europeans as cheap labor who are not entitled to stock grants.
All these costs are capped and not that important for higher salaries. Health insurance is only paid for the first 58k. The state pension, unemployment insurance etc do not increase for salaries over 85k.
I would expect a good benefits package in the US to be more expensive for the employer than the mandatory costs for German insurances.
It's subtle, but the headline feels a bit like low-key class warfare clickbait. No one feels underpaid because their salary is six figures, it's because of what they're paid relative to their peers and workload. The article actually covers this decently well, but the headlines makes it sound like techies are a bunch of entitled brats.
This is important. I feel it's especially true of folks outside of the Bay area, who hear of 400-600K compensation packages and wonder why they're being paid "so poorly"
A personal anecdote: A (very much) junior colleague decided to move jobs and when I asked them they told me their new salary - $15k more than I was making (and I had 15 years of experience on them). This person is totally competent and I was delighted they were getting that salary, but I was annoyed that I was not when I had so much more experience.
A personal anecdote: as soon as companies starting paying these salaries to remote workers, I found myself a company willing to pay me for my experience. Now I get to reap the benefits of lower cost of living, higher quality of life, and higher pay. I don't know how long this gravy train will last, but I suggest anyone with the experience to hop on get their ticket immediately.
There's this dynamic of pay tending to be pegged to your job title. An engineer is an engineer is an engineer.
In SF bay area, entry level jobs at big tech are skewing high and experienced roles are skewing low. This doesn't come close to mapping to impact level usually and we just accept that because it's socially easy.
I've worked at startups where there were clearly >10x impact differences between two engineers and at most there was a 2x salary difference. As a startup, it's basically not worth it to hire junior talent anymore because they are not close to being worth the cost in most cases.
This right here. It's frustrating when you learn that someone hired a couple months ago ("the hottest job market" tm) with 2 yoe makes marginally less than you at 10+ yoe, as an example. A higher performing Sr can expect maybe high single digit bumps yearly, but a job hopping Jr can double digit bump and make it to almost the same level in a couple years. While less important and more ego the same thing is happening to titles. It's just hard to get out of the headspace of feeling underpaid when you see that, especially when you are the one holding their hand and helping them gain experience. Totally get it's all "in your head" and we are all very fortunate or that I should just job hop along with them, but overall just hard to escape those thought patterns.
This is known as wage compression. It is occurring (typical in hot job markets) and has many of the problems you noted. Good indicator of a distorted labor market.
Working in tech is not exactly easy, even if you love computers. You have to move to some awfully expensive part of the country and interact with some extremely thin skinned people all day, and spend hours upon hours examining minute details of systems supporting systems supporting systems that you never even knew existed.
Plus it's very competitive. You can't just sit around and rest on one's laurels. You have to constantly be learning and god help you when you need to interview and land a new job.
It depends. I've met a few engineers who coast by on their experience and seniority, likely putting in less than 10 hours per week of actual work. They don't make top dollar, but are still paid handsomely by most measures. Of course, they had to prove themselves first to earn the privilege.
I don't want to generalize (anecdata and all that), but it seems like this would be pretty easy to do at many big (non-FAANG) companies.
> You have to move to some awfully expensive part of the country and interact with some extremely thin skinned people all day, and spend hours upon hours examining minute details of systems supporting systems supporting systems that you never even knew existed.
Sounds a lot like engineering to be honest. Lots of travelling to facilities in the middle of nowhere, people that never click together, examining systems with no documentation that you never knew existed in the first place, etc.
Which means that this is not a good explanation for the salary disparity between engineering and tech, as both fields deal with similar problems, yet one is paid substantially more.
Isn't it obvious? Software scales globally with effectively zero margin, so if you combine this with network effects and blue ocean, unregulated markets in user data, that meant a massive high new ceiling for software engineers set by Google and Facebook.
I don’t feel underpaid. But I do feel undervalued.
I have bemusedly imagined a future discussion where when a prospective employer asks what salary I’m hoping to make I say the following:
“We’ll, that’s an interesting question. I want you to pay me X or 1.2X. If you’ll point me towards value and let me contribute towards that, and act like you trust me and include me in decision making processes, in short some form of equanimity, I’ll do this job excitedly for X. But if you’re going to treat me like a horse, micromanage me, overprocess me, basically devalue me, then that is going to cost you an extra 20%.”
meh... they'll pay you X then bring you in to decision making meetings where decisions are already made, but you get to decide which hours of unpaid overtime you'll work to implement their decisions in the order they demand ("we've already approved this quarter's goals!").
But hey, you were involved in the decision making process, right? You and everyone else gets to decide which weekends you'll work, or which quality corners you'll cut, and which tests you'll skip, which documentation you'll avoid, which security steps you'll ignore, etc. Just don't bother the folks above you with any of those details.
Are six figure salaries an american thing? I see people saying "Entry level jobs are paying up to 60k" which is just crazy money!
I have worked for the past 7 years as IT within the UK education sector and expect my salary to be lower than that of industry but I am not even making half that!
I work in an international company and it is very difficult to compare EU to US, our US employees are on average 1.5x more expensive but, with that money they have to pay for more expensive healthcare with poorer coverage, and to get their kids to a good school they need to live in very expensive neighborhoods. For us in the Netherlands school quality is roughly homogeneous and when you get cancer you will never see a bill or suffer financially.
But 30k at 7 years of experience in IT is pretty low if you ask me (we’re talking before tax right?), for us that would be called "modal", about what a nurse or police officer would make?
I work in the Netherlands (large healthcare company) and make about 100k (12 years of experience after my PhD), however, I think my company pays quite well and when applying at other places I'd get about 85-90k? Depending on the company, larger is higher I think.
The way to a higher pay (but higher risk) for me is becoming independent I think. Then I'd probable be able to ask for 150 an hour (as consultant/sw dev). This be fore tax, no pension etc.
It's the hedonic treadmill effect. People here in SF making $200K are looking around feeling like they are probably underpaid compared to friends at other companies. Also finance/law can pay a fuck-ton too, but you have to work crazy hours. Have a friend who just turned 29 pulling down $500K in PE, but works like 80-100 hour weeks. At some point that's just a bad use of your finite time. Have also had friends walk away with millions after an IPO.
Not really sure if there's a larger point other than to say that there's always a tier of people above you making more money, so don't let it get you down.
Yes, they are an American thing. These salaries (or a decent percentage of them) are open to you in the UK, but you'll need to work remotely, probably for a US-based company. This may mean contracting.
Because some component of tech work usually needs to be synchronous, I'd suggest picking a company where most of the people are on Eastern or Central time -- for me at least, MT and PT feel just that little bit too far. If you're a night owl, that might not matter to you.
I'd guess a lot of people, regardless of industry, feel underpaid. Simply for the reason that they are. Growing inequality is real, over the last few decades an ever increasing portion of the productivity gain of the economy goes to a smaller portion of the people. We do the work, others get the profit.
Your sentiment is not specific to the tech industry. Many who work in tech are quite blessed to have careers that, despite the supposed realities you mention, give them a quality of life others can only dream of.
We europeans are underpaid and taxed to death. The US could easily fill its worker shortage by offering easy visas for EU engineers. Many of us would like to move but it's a real PITA to apply to companies that are even willing to consider visa sponsorship.
I actually have no idea why this is not the case already. It's basically 1st world to 1st world transition and the one losing would be EU.
It only seems like that but people in the US have to pay for things that Europeans take for granted. You might earn more, but most people would end up with less disposable income.
It really depends on your country. In the UK, the "NHS" everyone seems to love here is completely useless unless you're on the brink of death. Any non-critical care is impossible to get so you end up going private anyway, essentially paying twice.
No, but medical bills in the US can essentially be unbounded if insurance denies your claim. You pay 12k in insurance. That doesn’t mean you don’t pay anything beyond that number. People literally sock away millions of dollars for elderly care with the expectation that they won’t leave a dime to their kids.
For some jobs sure, but tech job? The delta is >$100,000USD/yr, which after tax might be $70,000 which pays for all that stuff you get for free or subsidized in Europe, plus some left over.
Look at the cost of housing and rents in most US cities that you'd actually want to live in.
The others? Forget about public transit. Need a car, and car insurance, and car maintenance.
And the reality is most tech jobs don't really pay as much as you think. For the good remote jobs you'll be competing with people who are simply better than you ,so good luck.
Even taking all of those things into consideration, $200k in SF is better than $100k pretty much anywhere else.
> And the reality is most tech jobs don't really pay as much as you think. For the good remote jobs you'll be competing with people who are simply better than you ,so good luck.
I guess it depends on what "you think" tech jobs pay, but this has not been my experience. If you're even half-decent, there are countless remote software engineering opportunities that pay well above $100k, which is a great salary if you're not comparing it with the top end of the industry. Most companies right now are facing a labor shortage, so it's far easier to get a remote job as a SWE than ever before.
> Even taking all of those things into consideration, $200k in SF is better than $100k pretty much anywhere else.
I don't know if that's true. The cost of living, in say, Pittsburgh, is 50% that of San Francisco, so at best it's equivalent. And you can actually get a house and a yard there.
> I guess it depends on what "you think" tech jobs pay, but this has not been my experience. If you're even half-decent, there are countless remote software engineering opportunities that pay well above $100k, which is a great salary if you're not comparing it with the top end of the industry. Most companies right now are facing a labor shortage, so it's far easier to get a remote job as a SWE than ever before.
"You think" that there are a lot of "half-decent" engineers out there. There aren't. The types of engineers making big bucks are not easily replicable. If it was so easy to become a half decent engineer we wouldn't need the song and dance of tech interviews which are an absolute joke.
Companies have made the hiring process HARDER not EASIER. This tells that the market is flooded with subpar candidates.
Cost of living in Pittsburgh may be 50% of San Francisco but that only matters if you’re spending every single cent you make. This is not the case on $200K. You are far better off in San Francisco. This is how “Californians” move to cheap cities and buy homes in cash over asking.
Look at the cost of housing of Western European cities you'd actually want to live in. My understanding is they are as high, if not higher than the US.
I did - the rents are cheaper, costs overall are cheaper, there are more amenities, you aren't nearly as reliant on cars, etc.
This is all out there online. Ultimately it comes out in the wash. If you get lucky and don't get fired in the US and you're a 10x dev, it's obviously better in the US. Most aren't in that boat.
Why only offer easy visas for EU engineers? There are good engineers in all countries around the world, EU engineers are not some special breed of engineers.
Meanwhile I'm making ~1/10th of the average. Been applying but looks like companies are looking for folks with +4yr experience. US and UK companies are no go since most aren't hiring people located outside of the US, and the few that do, it's for 1/10th of the average pay again.
Making +100k USD would be nice but I'm looking for 20k or maybe 30k, that would be way more than what I'm making currently. Can anyone share some tips? Should I just grind it out until I have enough yrs of experience to compete/be eligible for higher paying jobs?
I think where you live (unfortunately) has a lot to do with what jobs are available.
I had to move to Finland (from the UK) to get my first real job, and even when I returned to the UK I had to move to London to find another place that would take me. Now I have a few years under me and people seem to throw jobs at me.
The trend has been for a while: "We don't hire juniors", which I think is extremely short-sighted.
The problem is that when you're hiring juniors (or even interns) you have a responsibility for them; it's a bit like having children, you have a stranger that needs supervision, proper education and the company/environment needs to have a good structure.
Companies are scared of a junior being trained (or, invested in) and then running away.
Companies are even more scared of the fact that they don't have a good structure set up. So we have this sort of absence of new juniors.
(also, and this is controversial, when hiring juniors there's a strong emphasis on hiring from minority backgrounds such as women, trans-folk, ethnicities other than white and neurodiversity).
So, my "tip" is to move to where the jobs are. (rather: be very open to relocate)
I was recently laid off along with >30% of the company.
I really liked the job, I had full autonomy to do whatever I wanted. Research new tech, optimize our existing infrastructure, etc. I was the sole SysAdmin and I ran the operations very well. The problem: Pay was stagnate. The pay was decent for my region, but a far cry from larger metro areas and others with my skills.
So I started looking online and found a great opportunity.
As a bonus: The pay is $50k+ MORE then what I was making before.
Tech work doesn’t feel like something you can have a life long career in. It’s stressful and there’s ageism. Tech workers are mentally amortizing their productive tech life-span over their whole life and then comp doesn’t look as high.
> Despite the average salary for tech workers breaking six figures in 2022, many IT and tech professionals still feel underpaid.
> According to hiring experts, the most significant factor contributing to this feeling is likely the long and extra work hours of the existing IT staff, which makes them feel burdened.
This is great point. I'm sure we all know someone in this field who has experienced burnout from their job, or indeed you may have experienced it yourself.
In the end, by understaffing and piling on more and more work onto their tech workers, managers are stealing not just time from their employees, but their health too.
I personally realized far too late in my career that I'd wasted vast amounts of time working late to meet arbitrary deadlines for projects that, in the end, didn't really matter in the grand scheme of things.
I wish I'd pushed back and just worked my contracted hours, to spend more time with the ones I love, doing things I enjoyed, rather than forcing myself to endure further work stress.
That is much more important than getting extra money on top of a salary that is already well above the average earner, in my opinion. Though more and larger pay increases would have welcome too, of course.
Every time a customer's big whatever grinds to a complete halt and they try to melt down my phone because I'm the only one that can dig them out of whatever hole they've put themselves in, I feel like I'm not paid enough.
It's partly the hedonic treadmill and partly that most of them are in a bubble. They only mix with people who earn as much as them or even more. It doesn't take long here on HN to see how out of touch some of them are with the wider world.
With remote work and easier access to the global talent pool, these salaries are bound to normalize across the board. Enjoy the ride while you can, my friends! :)
People have been telling me IT was a bad field to go into since I was in high school in the early 2000s. India and outsourcing is going to take your job, don’t go into IT.
Here I am years later in one of the best job markets for IT. IT related jobs are constantly in the top 3 for projected grown in the next decade or so. Yet, I still have to explain to older people who maybe worked in IT/Telecoms in the 90s that no India and the global market is not taking my job.
Actually, in-house IT is going away. I've seen many companies switching to a hybrid format with a skeleton IT crew and larger external managed service providers providing IT services. And many managed service providers do have a global teams. Can you link to the report about projected IT jobs growth?
Companies will always need a global presence especially the larger ones I’ve worked for. I’ve worked with people all over the world mostly the US, India, and EU/Europe.
The idea that you shouldn’t get into IT in the US is silly. Companies need global workforces and most American companies aren’t going to outsource everything. I worked for MSPs and interviewed with many last year. Yes SAAS and hybrid outsourced infra to MSPs is common, especially in Europe.
Article from Forbes specific to 2022 growth.[1] Healthcare and IT are usually the top 2 skilled worker areas with growth. I’ve seen Physician's Assistant and Software Engineer as the top 2 growth jobs for college grads.
Honestly I've been asking for more pay to come into the office from companies I'm interviewing at because rent is skyrocketing and my competition when trying to buy a home even within an hour of most of these offices is on the order of $100k-$300k + appraisal. My rent should be 1/3 of what I take home.
I believe software engineers should be getting residuals from the products they help build. Like the way writers and actors get residuals for shows and movies they have worked on and are not a part of anymore. The company that owns that show or movie is still making money from licensing that and the actors and writers helped make that happen. Same with developers. Long after you leave a company that software product you helped create is still making money for its owner. Yes the structure would have to be hashed out. Ground floor developers would get more than maintainers. After some time OG creators would get less and the revisionists would get more. But at least developers could live off that money to take sabbaticals and not get burned out.
The challenge here is that once a show, movie, or piece of music is done, it’s done and can be syndicated out for decades. Software usually doesn’t work that way so you’d get into tricky situations like trying to license particular functions or code blocks, which would usually be trivial to rewrite to avoid paying royalties, etc.
If true, noting that just shy of 50% of tech folk feel underpaid seems surprising… for how low the number is, not how high. Everyone I know (judges, attorneys, law clerks, doctors, administrative staff, teachers, baristas…) thinks that they are underpaid. The fact that less-than-half of tech workers feel underpaid seems like a great sign to me for the industry.
I’d also be curious who the survey data was gathered from - the cited to studies are from a recruiting agency and have no source citations.
50% sounds reasonable number. And probably good amount of that is actually underpaid. And I don't mean in way of people here talk, but in real way of earning sub middle class wage.
I wonder how much of the effect is average vs. median. If you have a team of 10 people and you give a big raise to one of them, then the average will go up. But 9 out of 10 people will feel underpaid, because you did not give them a raise like their 1 teammate.
It’s because we generate millions in revenue per person and manage projects with enormous complexity that are not fungible. (Whereas most corporate functions just require a warm body.) We are vastly underpaid.
Whenever I see salary discussions on HN I’m reminded of a saying about military medals: “There are some who deserved more that got less, and some who deserved less and got more.”
No mention of current market conditions, namely record inflation? I suspect that may have something to do with why many people - "technies" are no exception - feel underpaid (because they are relative to blown-up monetary supply).
The average cost of a home in the Bay Area is also somewhere between ~1.5 million dollars as well. So it’s effectively impossible to reasonably buy a home unless you have a salary >300k without going into massive debt.
There is no "why" here. Just speculation by no-credibility "experts" and spamming arbitrary facts about what some jobs pay, and misreporting Amazon's base salary as total compensation.
Because averages are misleading, inflation is high, but also do they?
Most people I know might complain they get relatively less then before, but so does anyone who gets less then before.
But I don't know (m?)any which feel they get too little if put in context of jobs outside of IT.
Or at least where I live in the EU? Did the living cost in the US explode to a point where a 100k$ salary isn't enough to reasonable nicely rise a kid?
> But I don't know (m?)any which feel they get too little if put in context of jobs outside of IT.
I don't think the reference point is outside of the software industry; rather, it's other organizations that pay disproportionately well. When you hear of devs at large tech companies earning $400k+ salaries, it's hard not to feel underpaid if you're earning less than half that, even when your own salary is incredibly comfortable by most other measures.
> Or at least where I live in the EU? Did the living cost in the US explode to a point where a 100k$ salary isn't enough to reasonable nicely rise a kid?
Again, this is missing the point a little, but I will add that $100k won't get you very far in San Francisco.
So long as there is a labor shortage, workers will reasonably feel underpaid, knowing they have a better deal elsewhere. Just like in a recession people feel lucky to have a job. As for causes, US work visas have been cut while pandemic fueled increased demand for online services. And India/China still have not recovered from the pandemic to the same degree as US.
"six figure", "underpaid", "random.com", medium like article about having it difficult working out of hours...
Dear author, imagine yourself in academia where this is a relaxing week but the pay is half. If you dislike your job leave, or, suck it up and build towards an early retirement. It's not a magical forumla...
Maybe some feel underpaid because some of these companies work environments are terrible. Amazon’s dramatic increase in base pay is almost an acknowledgment that it is not a very nice place to work.
People are generally willing to accept less pay for work/life balance, job security, and non-toxic work environements.
This article is extremely accurate about fatigue from wrangling and prepping large amounts of data. One thing it oddly ignores is the YTD inflation rate of 8.5% but it acknowledges that salaries increased 6.9% since 2020.
Article was unreadable on mobile due to huge white box for a small banner ad that followed scroll at the top with a second massive uncloseable ad at the bottom, forcing a clickthru if you tried to scroll. Site is cursed.
That said, based on what’s been shared in the thread, I’ll just say two things:
1. $100k isn’t what it used to be. When I started my career a $100k base seemed great, JUST off inflation it’d need a $155k base today to have the same purchasing power. CPI inflation doesn’t fully account for how crazy localized housing is in tech hubs either.
2. As a percentage share of the value generated by each engineering headcount, our earnings have gone down as profits have gone up. The current reality is meaningfully less equitable than in the past, including in stock equity and share dilution.
There’s a lot of hemming and hawing happening in the world because tech workers are relatively better off than other workers, but we still are objectively being harmed by inflation and widening inequality between workers and the executive/capitalist class. The fact we are scraping by does not discount the facts above.
But inflation is over 11% since 2020. This isn't an increase. The average tech worker is making less than they were 2 years ago according to the Dice salary report.
Why do tech workers feel underpaid? Many companies posted record growth and profits over the pandemic, but still give out paltry 3-5% raises every year. The cost savings of work from home must have been enormous for these companies, yet none of that savings or record profits trickled down to the people writing code.
Meanwhile for those that have the time and willpower to grind leetcode, they know they can command a 20-40% raise every few years. It's not a secret that tech companies underpay their employees and bank on them being too complacent to go through the interview gauntlet yet again. Most devs will admit that they couldn't readily pass the interview at even their own company without many hours of studying and practicing algorithms.