The phenomenon isn't limited to engineers. People in all fields are willing to take less money for work they enjoy more. There are some kinds of work people like so much they'll do it for free: e.g. writing open source software.
There's a huge difference between getting paid for something that you'd do for free anyway, and being sold a bill of goods by a company that is trying to convince you to sell your time for less than it's worth.
Maybe it's because I came from academia, where people are always doing truly interesting work (for crap pay), but I'm also routinely disgusted with the glorified advertising companies who try to dress up their web engineer positions with "brilliant people changing the world" rhetoric. No matter how smart my colleagues may be at Blub.com, their work is unlikely to be as interesting as the stuff from which I walked away. Interesting work is important, but ultimately, a salary indicates professional respect.
Work that people enjoy more probably pays less because people enjoy it more. It's supply and demand: there's a greater supply of labor for jobs that people want to work at. Most people consider having a nice work environment to be worth $X to them, so their indifference curves get shifted over.
Yes, economists these days don't talk about compensation so much but "utility" which is the aggregate of salary, cow-orkers, short commute, nice office, meaningful work, yadda yadda. People will always act to maximize utility.
I'm also not convinced they'd be doing the exact same work if they weren't being paid. Surely they'd be scratching their own itches, not those of the company. I guess for some projects those goals do coincide (e.g. "make GCC produce faster code") but I can't imagine this is true in most cases.
Red Hat hires a lot of people to continue working on projects they are already working on, and so does IBM to a certain extent.
Think about it, from a hiring point of view, OSS is amazing- you're getting someone who is already familiar with the codebase, that you already know for a fact is competent, that can already work with the other developers.
I'm not disputing that. Just because they're working on the same project(s) doesn't mean they're taking the same direction with their efforts as they would have done otherwise. (aside from the fact that they probably have more time to work on it when they're employed vs doing it for free)
There's a crucial difference between writing open source software for free and getting a badly paid job, though. With open source software, nobody is making you do it. Okay, you might have users who you feel compelled to please, but let's face it, you don't have any contractual obligations.
Contrast this with something like a game tester. These are some of the hardest working people I've ever met, and they often earn so little they have to live with their parents. (with all the unpaid overtime, I'm sure they get less than minimum wage) They don't really get a choice about whether to work the 80 hour week they're asked to: if they choose to work less, they'll probably be passed over for the promotion to lead QA or level designer. (for the latter they have to build their skills in that field in their spare time) My understanding is that it's similar in film, etc. This happens even above the entry level: I once met an animator who accepted a 90% (!) pay cut to give up his job at a Hollywood animation studio and work for Rockstar London, just because Rockstar have this aura of prestige.
Initially, this strategy might make sense to get your foot in the door. But I'd be extremely surprised if it was optimal once you'd proven yourself to the company. I'd have been pushing for much higher pay if I was still in a regular job (though maybe the drastic difference in skill between programmers makes this easier than in artsier jobs where productivity is even harder to gauge). Yet the culture bred in the game industry is such that you're supposed to feel privileged to be working there in the first place. As far as I can tell, this is an illusion; it's not actually that hard to get a job, at least not once you have a minimum of experience. (this culture is one of the reasons I left; the fact that they attempted to bribe me to stay reinforces my belief - I've been getting more than what they offered as a contractor)
"People in all fields are willing to take less money for work they enjoy more."
I definitely agree. But I know there is also a widespread misconception (at least here in France) that you can't have a job that is both fun and financially rewarding, at once.
I think it's just not true, in my experience at least.
Very true. In fact Adam Smith in Wealth of Nations makes this very point. Every job sits at the confluence of a number of factors including recompense, status and unpleasantness.
Paul, I feel that you personally have a vested interest in convincing young engineers to take low salaries for "more enjoyable work". Why? It makes kids far more willing to lose 2-4 years salary at an under-funded startup and overwork themselves based on the strength of your own personality cult.
Reading anything I've written about startups would correct your impression that I view it as enjoyable work.
"There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars' worth of pain. For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years. In a startup you compress all this stress into three or four years. You do tend to get a certain bulk discount if you buy the economy-size pain, but you can't evade the fundamental conservation law. If starting a startup were easy, everyone would do it."
Having read and quoted that essay, I'd like to think the stress and pain is somewhat counteracted by the pride and pleasure of choosing your own destiny.
It also seems that being a founder or running a business is the only way to get paid your true worth by the marketplace.
You avoided the actual issue. This isn't about founders. This is about engineers. Engineers aren't the ones getting the million dollar payout (if the startup lottery is in even in their favor). This is about engineers looking for work. The people founders need to pay a salary to. There haven't been million dollar payouts for engineers in a long time. The complaint is that founders continue to peddle the fantasy that engineers should remain underpaid because they might win big at some later date, in an effort to keep salaries low. That's a shame.
