> If high-skill talent is rare their wages should rise. I do not see that happening. Well, at least not here in Germany. Industry is crying about a skill shortage but the corresponding wages are stagnant.
Businesses resist increasing pay, because that eats into their margins.
Even in capitalist America, SWE pay stagnated until fairly recently. Employers actively fought against increasing SWE pay, even as their shortage was getting worse. They kept wages artificially low, and successfully lobbied the government to fill their openings with cheap H-1B employees - the H-1B quota back then was over twice its current level.
That was a short-term victory, and long-term loss for the industry. If more engineers made $150,000 in SV back in 2005, there wouldn't be such a shortage today.
Eventually this flimsy dam broke, and now we're seeing pay more in line with where it should be according to the supply/demand curve. Arguably it's still not quite there, even in SV, where engineers with their "outrageous" pay still can't afford a home.
So in Germany, apparently employers are still in the "resist and whine to the government" phase. I bet they're begging for the government (i.e. taxpayer) to fund skill-building programs, import more high-skilled workers from 3rd-world countries... the usual stack of solutions.
I'd also suspect higher taxes have something to do with it. Why should I stretch myself paying $120k to an engineer, if he's only going to get $65k out of it? I don't know too much about the taxes in Germany, but I've seen this problem in other foreign locations where we were recruiting: increasing pay did not result in more or better candidates, and all the best candidates were just trying to get to the US any way they can.
There will never be enough pay for swes to buy homes, because there aren't enough homes for everyone - and so if you pay them more the prices will go up, but in most of SV there isn't that much room for more houses. Don't get me wrong, I'm in favor of more money for swes (I'm a swe!) but I disagree with that point.
Sure, it was never my main point to begin with. I agree about the real solution, as I stated elsewhere in this comment thread: build more housing, especially efficient housing.
Still, I find it amusing when people complain about "filthy rich engineers" who can only afford to live in shared apartments with roommates in SF...
Build up. Thirty story apartment buildings are not cutting edge technology. Neither are eight story ones and they don’t even require steel beam construction.
I agree with you that there could be denser housing, but that zoning laws prevent people from building more dense housing. So in practice there's no more room.
Don't forget that more engineers can increase wages too. You seem to be stuck in a bit of a simplistic lump of labour idea about supply, demand and salaries.
More engineers means there are more companies that can grow, which increases opportunities for integration and building on top of. Think of engineers as more like fuel for a fire: the world isn't sufficiently automated, and the way we automate it is by applying engineers to the problem. The more we throw at it, the hotter it can burn; and the rewards depend on the value of the thing being automated, not mere supply and demand.
If we only had one engineer, they would not be worth the billions of amappgoosoft put together. It's very far from a zero sum game.
Businesses resist increasing pay, because that eats into their margins.
Even in capitalist America, SWE pay stagnated until fairly recently. Employers actively fought against increasing SWE pay, even as their shortage was getting worse. They kept wages artificially low, and successfully lobbied the government to fill their openings with cheap H-1B employees - the H-1B quota back then was over twice its current level.
That was a short-term victory, and long-term loss for the industry. If more engineers made $150,000 in SV back in 2005, there wouldn't be such a shortage today.
Eventually this flimsy dam broke, and now we're seeing pay more in line with where it should be according to the supply/demand curve. Arguably it's still not quite there, even in SV, where engineers with their "outrageous" pay still can't afford a home.
So in Germany, apparently employers are still in the "resist and whine to the government" phase. I bet they're begging for the government (i.e. taxpayer) to fund skill-building programs, import more high-skilled workers from 3rd-world countries... the usual stack of solutions.
I'd also suspect higher taxes have something to do with it. Why should I stretch myself paying $120k to an engineer, if he's only going to get $65k out of it? I don't know too much about the taxes in Germany, but I've seen this problem in other foreign locations where we were recruiting: increasing pay did not result in more or better candidates, and all the best candidates were just trying to get to the US any way they can.