Being born in a foreign country, I have to smile when I see a blog entry like this one. I agree that the salary is relative to where people are living and I get the point of the writer. To specify an example, let's say that some Silicon Valley engineer wants to buy a $1M house. With $100K salary, it will make 10 years of salary.
Now, let's move to another country: Spain in this case. A normal salary for a junior engineer is around 15K/year (euro) up to 30K for a senior developer. A big house (for europeans, 950sq ft) in a normal neighbor in Barcelona costs around 400K (euro), which would be like... 26 years of salary?
And I have compared different houses, for what I have seen, in general the price $/sq.ft. is pretty similar between both cities.
As I said, I understand that the engineers might not get back what they produce (and I agree) but I just wanted to give another point of view.
There are a few factors to consider here. First, the Spanish housing bubble appears several times larger than in the US, and prices may still have a long way down to go:
Next, how many hours per week and weeks per year are you working? The typical american engineer is probably working 50+ hours per week, with only 2 or 3 weeks of vacation per year.
Finally, you should consider international consulting if you're being paid $30k/year while working 50 hour weeks. email me if you know ruby :)
Yes, I agree with you that the Spanish housing bubble was (and still is) insane. I don't have current numbers, but in this website you can check the number of houses started in Spain and compare them with other countries: http://www.casastristes.org/files/viviendaNuevaEuropa/vivien... (link in spanish, but numbers are universal). Since 1999 building more houses than France and Italy together; while in other countries there is a lot of investment in technology, in Spain they invest on houses.
I was not talking about myself. I worked in Barcelona for a while and moved to the US on 2009. Usually engineers don't have a 8-6 working schedule; in the company where I worked it was more normal a 8AM-9PM. 1h for lunch. And during deadlines it was "normal" to stay until 1-2AM. And back at 8, of course. All that for 15K. Sounds great, doesn't it? I left the job after 6 months because I considered that it was not a "good deal". It is true that I could be close to 30K in 1-2 years but...
I can't talk for all american engineers, but people that I know are close to the 100-120K without working 50+ hours. The difference on holidays is one of the biggest differences, that's true. And social benefits. As for your last comment, foreign engineers should definitely consider that!! Spain universities are pretty good (our engineering undergrads were 5 years until the current Bologna system) and engineering programs are considered really tough.
@tassl: Do you live in Barcelona? If so, please get in touch with me: stefan.klumpp (at Gmail) - I'm always looking for interesting people to meet in BCN.
PS: is there no direct messaging system on HN? Or am I just too stupid to discover it?
Born and raised, but currently not living in Barcelona; I moved to California for Graduate studies.
As you probably should know by now it's a really beautiful city. And probably the city with more entrepreneurs on the country, which unfortunately doesn't say much (given the country that we are talking about).
I'm not sure that I agree with the tenets of this article. Silicon Valley Engineers don't seem underpaid to me. Sure we could potentially make more in finance, but that doesn't mean we are underpaid. I feel like there are a number of things that I value (in the following order):
1) Exciting work
2) Large potential impact
3) Financial compensation
Notice that money is third, and that isn't an accident. I probably make less than many of my classmates who went into finance (although the difference is likely smaller that one might assume based on comparing "averages"). However, most of them don't really seem to like their jobs all that much. I get to work on interesting things that will hopefully have a large impact, and get paid pretty well for it (I've usually made significantly above the Silicon Valley "average").
In addition, I think that many people in finance are likely overpaid relative to the value they generate, and that there will be a correction at some point in the future.
1). Does the market clear? Can every company wanting to hire someone for $100k find someone?
2). Do different firms routinely value the sane person consistently, such that switching jobs results in no significant salary increase?
3). Do developers routinely capture gains made as a result of productivity increases? For example, has the adoption of frameworks which make web sites about 10x faster to build in ten years resulted in 10x increases in salary?
...
Well, look on the bright side: you're not Japanese engineers.
If so, then more of us should go work for ourselves. Put our money where our mouth is.
If we're truly creating so much more wealth for these companies than we take in salary, it should be easy (ish) to turn that into more money for ourselves, even if large companies don't want to do that.
And if working for ourselves doesn't instantly turn into way more cash, perhaps we're not creating as many billions in actual value as we think we are?
There's no reason to assume that a programmer on her/his own is worth the same as s/he is in the right position at the right company. A team can (and should) be worth far more than the sum of it's members.
Reading HN a lot can make us forget that being a great programmer doesn't make you great at business.
Let me make reduce the cognitive dissonance for you: being a good hacker doesn't make you lucky, and that's the difference.
Nobody admits it, but a lot of the secret of creating a sustainable business boils down to luck, not being a "great business guy". Our industry is set up to reward risk-takers disproportionately...when they succeed. It's a lottery, but we like to justify the disparity in compensation post hoc by assuming that there's corresponding disparity in skill that somehow created most of the value.
"Our industry is set up to reward risk-takers disproportionately..."
But then we're back to square one: why don't you become a risk-taker yourself? It's easy to paint oneself as an underpaid creator of millions of dollars in value, but for this to be possible someone had first to take a risk and then succeed.
And in case of failure - would you, an employee who gets such a dispropotionately small share of generated value, be so eager to increase your share in the generated loss?
I wouldn't and that's why I don't see much value in the "created value" argument.
"But then we're back to square one: why don't you become a risk-taker yourself?"
Who says I'm not? Most of the time that people take risks, they fail. That's why it's called "risk", and not "guarantee".
" would you, an employee who gets such a dispropotionately small share of generated value, be so eager to increase your share in the generated loss?"
That's a straw man. Created value isn't allocated in strict proportion to risk of loss, and you don't have to take more risks to get paid more. If that were true, the people who funded a startup would get 99% of the upside, because they had the most to lose. (Also, doctors and lawyers wouldn't get paid squat. Anybody who knows a doctor or lawyer will tell you that that they're just about the most risk-averse people on earth.)
The real answer is that compensation is about market forces. The people with the money are only willing to pay as much as the people who create value demand to be paid.
I respectfully disagree with your analysis. Let me explain why through an example.
Suppose you have two options, A and B (seen below):
A: Work for large company Z which reaches 100 million people already through a $10 product. You make an incremental improvement that improves sales 1%. You have now made $10m contribution to the company.
B: Work for yourself. You found a startup that is getting half a million unit sales a year (pretty good, right?), and you double sales somehow. You've only produced a $5m value despite doubling the output.
The answer is that often big companies are much more levered and each unit of input can create much more output (primarily because of breadth of resources and reach) than if you were to work by yourself. Your value is how much you can contribute. Your highest value is your value at the company where you can contribute the most. By a reasonable application of some auction theory, you would expect that your market pay (including costs you can't see like payroll taxes) should be approximately what your second-highest value is. (Because if it were higher, the highest-value place can lower it and you'd still be working there, and if it were lower, the highest value place may not have you)
So if my services securing your leaky billion-dollar Java app are worth hundreds of thousands of dollars (versus the money you'd lose in case of a breach), that must mean that if I create FizzBuzz and secure it, it should be worth a billion dollars to people. Is that the math you're using? Because it sounds like it, and it doesn't work. You might not be able to create wealth in a vacuum, but that doesn't mean the wealth you create in the right context isn't real.
If we (the serfs) are truly creating so much more wealth for these lords than we take in salary, it should be easy (ish) to turn that into more money for ourselves, even if the lords don't want us to do that.
The problem with this logic, of course, is that it's tough for a salary-worker to build a company that makes "way more cash" than they can get working for a salary.
In feudalism, the downside of that approach was that if you went off on your own, armies would generally come and (at best) repossess the land or (at worst) kill you.
As a programmer, you don't have quite the same issues. Where do you see the monopolized resources and/or forced prevention of exit being for us? We're not exactly medieval serfs that way, and starting a software-based company is, as pg repeatedly mentions, way cheaper than it's ever been.
Anyone who believes 100k is underpaid has serious entitlement issues they need to examine. You need to look around and see how the rest of the country/world lives. Sure google, apple, and others may generate enough revenue to pay people more than that but they would also do it without you because 100k will buy them good developers.
American programmer salaries are so far above the country average that complaining is just ridiculous.
Hi, redstripe! Is there someplace you can find lots of talented programmers with your mindset, who mainly look at "how the rest of the country/world lives" and think any salary "far above the country average" makes "complaining ridiculous"? Because any such source of programmers would be a gold mine!
In fact, you might even want to start a placement agency! On one side, you recruit young starry-eyed talent, and feed them a constant stream of images/rhetoric about how tough everyone but them has it, so their salary expectations stay low. On the other side, you hook them up with "Google, Apple, and others" who "generate enough revenue to pay people more" but are looking for bargains.
I'm having a hard time trying to interpret your sarcasm. Are you saying 100k is a paltry salary and I would have a hard time finding programmers to work for that wage?
BTW, I am an employee and not a employer. I would certainly like to make more. But at some point (certainly at 150k) you just become an out of touch complainer if you're still unhappy with your wage.
So if a person, single handedly, year after year makes a company millions, you're a whiner if you want 150-250k?
Depending on where you are, 100k barely supports paying for a house to raise a family without a 60 minute each way commute. Many of the places that have very high paying programming jobs just so happen to also have astronomical costs of living. SF? Check. NYC? Check. If you know C++ stupidly well, I know a very high paying job in a relatively low cost of living city (Atlanta) working for a bank. Can they find enough people at those astronomical payouts? Nope. They're constantly looking, less than 1/100th of the applicants can even get through the programming test.
People are simply paid what they can get demand given their skills, inclination to negotiate, and a motivated company to hire.
Additionally speaking, many of the people who demand the 150-450k salaries have run their own businesses, have skills other than programming that are very valuable to the employer (I know my fees are justified due to lots more than my not inconsiderable programming ability), and could do considerably better than 100k out running a business.
If a corporation wants to keep them, they should pay them what it takes.
Or are you saying no one should ever make more than 100k, including brain surgeons and law partners? Cause they're whiners?
I don't agree with the conclusion because I don't agree with the premise: that most programmers are irreplaceable ninja rockstars that single handedly make their employers millions a year. We're talking about average salaries not outliers that have no bearing on what most of us should consider fair pay.
I'm saying if you make 100-150k a year, sitting on your ass, doing something you enjoy then perhaps you should feel pretty fortunate. Stop thinking about the few % above you and consider the vast population below you.
I don't think you understand silicon valley: You basically are retarded to run a business there if you don't need that type of programmer which you're lampooning. Costs are stupidly high.
This isn't about average programmers. This is about this tiny pocket filled with overachievers who work stupidly long days for a jackpot and have a very high exposure to running their own businesses.
100k in silicon valley puts you in the top 47% of the people who live there, which means you're in the commute forever or live in a dinky house dialemma. (The average salary there is $96,299). It's one of the few cities in the world worse than where you live for housing, and housing there costs 2x as much for little places (rentals) and 1.4x for buying as Vancouver. How do you enjoy your 4 bedroom home? Oh wait, you can't even afford that where you live (most likely). Now imagine being able to afford 1/2 of what you DO have in housing.
So you live in vancouver, should we tell you to stop bitching at $54k?
Relative salary is important for purchasing some goods, namely housing. As a person who lives in a city almost as bad in that respect, I'm surprised you don't have a better feel for that.
That's pretty idealistic, borderline naive. There's a huge percentage of working programmers in Silicon Valley who are dead wood. Beyond that, there's loads of good ones who are working on doomed projects.
Sure there is! Didn't say everyone was making bank deservedly. I said you're stupid to run your business there if you don't need some of the very good ones who flock there, as costs are absurdly high. One great guy can pull a company along if its small enough and the deadwood does little enough harm.
(Note I keep saying "there" etc. I live in Atlanta, a much more reasonable cost city for businesses that don't need stupidly good people to really work).
I'm making the same points as others have, in a different way. The relative-wealth considerations you mention may be relevant for achieving a sense of gratitude about one's blessings... but are completely irrelevant in determining what salary someone "should" be paid, or when they should complain-to-employer/demand-more. If developers integrate your thoughts into their salary negotiations, others are enriched – not the developers, not the people scraping by on less, but others arbitraging their low demands and higher productivity.
Raising your threshold a little – to 150K! – doesn't fix the problem. If your work is worth 500K – generating more than that for someone else – and you're paid 150K, you're being cheated. You have the right to be angry, complain, point out the discrepancy to others, and vigorously pursue competitive alternatives.
Yes, this may appear ungrateful to those making do with far less. But their remote estimations aren't relevant to the intimate dyadic relationship between an employer and employed, where both fairness and efficiency require salaries to be set by negotiation over value delivered each direction. Let third-parties express their displeasure through progressive taxation schemes or the construction of alternative economic systems... not by telling developers to be happy with a lower share of their own output.
> If your work is worth 500K – generating more than that for someone else – and you're paid 150K, you're being cheated. You have the right to be angry, complain, point out the discrepancy to others, and vigorously pursue competitive alternatives.
I was with you up until this point. You and the person paying you both agreed to the compensation you get. If you don't like it then you have no right to "be angry".
You can however try to renegotiate your compensation.
I agree with your point. I'm a student and can't dream of making that much money right now. However, the "point at which you become an out of touch complainer" is different for everyone. To use a cliche example, starving African children would look at you crazy if you complained about your $7/hr burger flipping job.
No really. They told us during salary reviews that "Financial Forecasts aren't looking good!" and "There's going to be another GFC and that's why you're only getting a $1K raise". That's when I decided to quit.
Then they made a big song and dance at a company event about how we'd made 13M in profit. Yeah, VERY convincing guys.
Also: if you're being paid $100k and, in turn, generating hundreds of thousands of dollars of value for your company, you're undervalued and underpaid.
The software industry is one of the few industries where a single person can create mountains of value all by themselves. Comparing software engineer salaries to janitor salaries makes no sense as janitors aren't creating multiples of their salary in value for their employer.
The only problem with this example is not every software engineer has the ability to be an entrepreneur. Sure, they can create monumental value for their employers, but there are some people that just can't be founders or cofounders or anything more simply because of how they are. I know quite a few people like this. At the end of the day, it takes a variety of personality traits, skills, brains, and a slew of other things to create a well rounded individual who can maximize value. Outside of this, no matter how much value you're adding to your employer, how can you honestly say you're worth more.
I've been thinking about this, and trying to come up with a solution.
The best solution I can come up with is options/stock and salary... That way creating more value DOES help them get more income, subject to the vagaries of the stock market.
Unfortunately, as wonderful as it would be for everyone to receive their exact value in return as a percentage, that's HARD... It's hard to quantify and it's hard to justify.
I agree with you but I'd also agree with redstripe when it comes to the parts of the article that said you "can't live in Silicon Valley" without being part of an IPO, or that you can't pay off student loans, or save for retirement, etc. Those things are definitely well within reach, even in San Francisco, on 100K/year. If you can get 130 instead of 100 and would rather do that job then great, go for it, but don't pretend that your doing out of "necessity" or in order to get by. That's the kind of thinking that gets you into jobs you don't like while being perpetually envious of the lifestyle of your investment banker friends.
The value of a salary is measured by what you can do with that money. Making $120k in Palo Alto means renting a <1000 sq. ft. 1-2 br condo with about 35% of your monthly salary, if you want to live within a few miles of your work. Making $120k in Sacramento means owning a 3000 sq. ft. house (with a big yard) and 20% of your monthly salary going to a mortgage payment.
In Sacramento you could probably get away with being the only wage earner in your family too, because the cost of living is just cheaper. In Palo Alto there is simply no way that you could live comfortably on that money if you have a partner and child, unless your partner also works and makes a high income.
Now granted, at the end of the day you have live in Sacramento -- which is a cultural backwater, scores R+6 on the Cook PVI, and has 4 ultra-conservative talk radio stations -- to stretch your dollar like that. And it's questionable whether there are any jobs that would even pay so much for a similarly experienced engineer.
But the point is that you can't say whether $120k is too much or not enough until you consider all the costs incurred to make that salary.
I'd wager a significant portion of my (meager, startup-bootstrap level) salary that $120K in any neighborhood of the country (SF, Manhattan, wherever) is more than the national median purchasing power of an American family, which was the point he was making in the first place.
I think the point he was making is that it's well above the median purchasing power, so much so that there's no right to complain.
Moreover, so what if people in Kansas or North Dakota have less purchasing power than me? I live in a place that is cosmopolitan, diverse and has a higher average IQ -- and there's a higher cost associated with living here. This is like telling someone who drives a Mercedes that he can't complain about his engine needing service because someone, somewhere else in the world, is driving a Ford.
They're good salaries, but they're middle-of-the-road for a professional, white-collar job. As far as mid-career salaries by profession go, software engineering at ~$100k isn't even midway between history major (~$75k) and petroleum engineer (~$160k).
Plus, everyone on all sides could be accused of whining, because the entire technology industry is well off compared to most people. When a VC complains about terms on a deal, you could ask, why are they whining when they're already well off?
Poor phrasing; it was median mid-career salaries of people with history degrees (versus petroleum-engineering degrees, versus software-engineering degrees). So I guess it's a stand-in for whatever it is that the median history major does.
In my city (Vancouver) only 7% of the workforce makes over 100k a year. I don't know what the professional breakdowns are but I would consider myself pretty fortunate if I was in that 7%. Hell, I consider myself fortunate even though I am not in that category.
100k goes considerably further in Vancouver than in many parts of the Bay Area. Real Estate Rents and Sell prices are between 40-100% more expensive in that region than where you are. I'd need to make about 180% of what I do here to get what I have here in Atlanta, GA
Does it really? Vancouver is ranked something like #1 most unaffordable housing market in the world. As in, the average salary is $50K but the average home price is $500K. I guess you're right, if you actually ARE making $100K in Vancouver, it will be easier to buy the $500K house. However, the reality is that programmers there make about $60K, so you're better off being a real estate broker.
Rent Per Month
Apartment (1 bedroom) in City Centre 1,202.29 $ 2,433.33 $ +102.39 %
Apartment (1 bedroom) Outside of Centre 1,093.54 $ 1,500.00 $ +37.17 %
Apartment (3 bedrooms) in City Centre 2,660.64 $ 3,965.49 $ +49.04 %
Apartment (3 bedrooms) Outside of Centre 1,754.56 $ 2,692.00 $ +53.43 %
Buy Apartment Price
Price per Square Meter to Buy Apartment in City Centre 5,897.44 $ 8,250.00 $ +39.89 %
Price per Square Meter to Buy Apartment Outside of Centre 4,376.52 $ 6,000.00 $ +37.10 %
Depending on what SV company you work for, ~$100k isn't a mid-career salary, that's what they pay graduates fresh out of college, not including bonuses.
I don't consider that underpaid.
Sorry but I've heard similar arguments made for every salary north of 40k. There's nothing 'entitled' about expecting to be paid relative to the value you bring -- that's the American way.
Google "Bono piracy" and you will find lots of articles about a man making $100 million a year that likes to complain he is not making enough. I suppose he too is not entitled.
The free enterprise system - the American way - is also about bringing down the price of goods. If you work, you just happen to be one of those goods.
Lots of people seem to think that the specific set of skills they possess is unique, extremely under-valued and completely necessary to the survival of the human race.
I shall call this phenomenon occupational narcissism.
Name a job that is "completely necessary" to the survival of the human race. The only one I can think of being remotely close to that standard is a farmer.
And yet programmers are still paid less than lawyers, doctors, or investment bankers, while providing much more value than any of them. (Yes, even more value than doctors. An extraordinary doctor can only touch so many lives in his career; an extraordinary engineer can touch millions on a regular basis.)
I would bet that an extraordinary doctor can indeed touch millions. The best doctors reform the practices at their hospitals, improve the standard of care, and get brought in to do the same at other hospitals.
Programmers work in Medicine too. Specifically medical technology - things like Cat scans, MRIs, PET scans have probably saved many more lives than even the most extraordinary doctor.
Many of these devices were invented by doctors and implemented by programmers. The doctors, in many of these cases, were the ones who created most of the value.
When the idea behind a device is more like, "Here's how we're going to use magnets to align the polarization of water molecules in the body, measure those changes, and map those back to construct an accurate image of the inside of someone's body. Now program it for me.", the original inventor creates a whole lot more value than someone who says, "It's like Facebook for dogs. That uses PHP, right? Now program it for me."
It's not a matter of "touching" lives, is it? I mean, I think Amazon is great and all, and I'm really glad it's there, and kudos to the engineers who work on it. They've touch a million lives. But I think that Amazon's impact on my life is much less than the impact that a good doctor or surgeon would have, should I become seriously ill.
That's because doctors and lawyers impact individual lives directly, and often profoundly.
Explain how any developer has done this recently.
We're hardwired to respect individual stories, not tales of aggregate success (affecting millions of lives in a small positive way)... which is why it's only when those small effects are made tangible by specific personal stories does it sink in.
This is why politicians talk about how the impacted the life of some small child or working mother, etc etc..
Pay is a reflection of your value. Lebron James would be unhappy making 2M/year because his market value is well above 2M/year. Similarly, many Silicon Valley engineers are making, say, 100k, when their employer would happily pay, say, 150k to keep them.
I wouldn't say that asking a question of fact is necessarily indicative of an entitlement issue. On the other hand, the belief that the profits of your employer should determine your pay is just ignorant.
For the level of education and skill needed to make a good engineer, it is underpaid. It's not about entitlement -- it's the real economic forces the article mentions. The most skilled people will be attracted to other careers.
Maybe it means engineering isn't as valuable as we think. Or maybe it means engineers aren't as good at wielding their power.
I think it means more engineers do it for love of the work. And there's no gating body/cartel to protect it.
The excess value you create but do not claim is not returned to the universe for fair distribution - rather, it is captured by ruthless jackasses that didn't do the hard work work but aren't hampered by meaningless guilt over things they are not responsible for.
I make it my mission in my professional life to capture as much of that value as I can and do with it as I see fit. Which usually means spending it in productive ways with businesses that enrich the community.
I was with you until you decided to call people who pay you and organize your labor "ruthless jackasses." Just because you can't touch or appreciate their work doesn't mean that they don't add value.
I think his point, without the "jackasses" part, is this - value creation is not zero sum, but value claiming is, so if you're creating more value than you're claiming in compensation, it implies that the person on the other side of the table is claiming more compensation than they've created value. This is what you're negotiating when you negotiate salary, benefits, and working conditions, and a lot of that has to do with your BATNA - the pay you could be getting elsewhere, and the others your employer could hire.
So if you could be getting more elsewhere, then the others who are splitting up the profits are getting more compensation than they created value - others who are getting far less than their market value aren't part of the negotiation, unless your employer is thinking of hiring them.
In short: If you're thinking of working in Finance, and your employer has no intention of hiring a starving programmer from another country, then you're underpaid. If your employer is looking into outsourcing, and you're not searching for jobs, you're overpaid.
Just because you can't touch or appreciate their work
I can definitely appreciate the work, as I'm a business owner. I know this kind of objectivity is a bit strange, but I have both employees and clients, so I see both sides of the table on a regular basis. I'm just calling it like I see it.
Well, I can't speak for anyone else, but I try to be one most of the time. It doesn't always work, because I am not a sociopath and I follow the law, but I'm sure there are others out there that don't have these hangups.
A toolmaker makes his living by taking a 80 cent piece of wood and a $2 piece of metal and combining them into a hammer which he can sell for $15. A manager makes his living by taking a $80,000 employee and a $200,000 employee and combining them into a business unit which is worth $1.5M.
Neither is any more immoral than the other and neither captures more than their fair share of value.
I'm sorry, but this analogy is too loose for me; I must rebut.
Suppose the toolmaker maintains these profits by keeping his thumb on the wood-seller who can barely support his family selling 80 cent pieces of wood. If the toolmaker paid the wood-seller $1 or $1.30, this would be more in line with what the wood is worth. The fairness of these price points can be argued.
Now we're back to considering whether engineers are underpaid!
But in reality, in any organization of sufficient size, you have a lot of people who don't actually do anything creative clamoring to capture that excess value generated by the people at the bottom (and at the top!). These are the people you are trying to push out, not the productive, well compensated people.
If fair distribution is your concern then you should probably be more focused on the people at the bottom end making 20k-40k that could be making more. This article was not about those people.
Employers will only pay as much as it takes to keep you from leaving. At 150k a year the ratio of people who would be willing and capable of replacing you is pretty high.
You're saying that your salary has no affect outside of your company. That's it's all internal accounting. I don't agree with that.
Salaries will affect the price of your service. That price is paid by everyone else who doesn't work for your company and passed along. You are taking a bigger share from everyone.
Think more and you'll only get an answer of "yes".
Throughout history there has been areas that excel in certain trades. Steel Work and boat building moved from highly talented areas in the UK pre-WW2 where workers were underpaid compared to their skills. As wages rose, this era ended and the steel work and boat building jumped straight to post-WW2 Japan. Similar things transpired as wages rose and it shifted to South Korea that the government suppressed unionization and allowed its steel industry to flourish and still only appears to be in the declining phase of its ship-building.
Whilst the elite of the worlds technology reside in the valley, good developers will be underpaid. When the workers get stupid and want to be overpaid for their work (IE unionise) then there work will move to the third world overnight.
Then there's the other valuation of income. I always make less than I should, simply because if I worked for myself doing whatever job I do I will be making more. If you're an employee, you'll never make what you would as an employer or as a self-employed.
Unless you are no good at business tasks. It's an unpopular truth, but still truth: Some people could never run their own business. They don't have the skills, or the mental chemistry. Some kids could never be president, some people can never run at a competitive level, and some people can't work for themselves.
It's not fair, or glamorous, or even particularly PC. But it's true.
One big issue is that engineers haven't seen cost of living increases in the last 10 years nearly on par with lawyer/finance/professional jobs. This was justified by the "tech crash" for many years, but it went on too long (only in the last few years are salaries going up again).
The only way to afford to live well in a California tech center as an engineer has been to have a big startup exit or a very senior job.
I managed a team at Google, and had 4 direct reports ask to work from home 50% of the time, or even to work 100% remotely, mostly so they could live somewhere cheaper.
This comes out in "work/life balance" - when your commute gets too long so you can afford a big enough house in your 30s, spouse gets mad, you get overtaxed, and it's not a good scene.
But to make this post more than just noise, much of the Google culture for a long time revolved around personal relationships and being in peoples cubes to get their attention. Not something you could do from home anyway. The Anybot experiment would have been interesting to see.
I'd say the overwhelming majority of programmers everywhere are underpaid. I'm basing this on the fact that I could roughly double my current salary if I quit tomorrow and spent a year working my way up as a welder and my salary is pretty much in the median range for the area I live in.
Your argument is insufficient, and I suspect it's because you're implicitly assuming that programming is also more difficult than welding. I could say that McDonald's employees are underpaid, since they could double their salary by quitting tomorrow and working their way up as a welder. That would probably be true, but that alone doesn't mean that McDonald's employees are underpaid.
edit: prepended "sufficient" with "in," which makes a big difference
What's with the downvotes? He's providing additional context to his original statement (which was well considered and well written), this definitely adds to the conversation.
Well, for one, it's more dangerous than programming. I've heard that welders with SCUBA-diving training make a ton of money (easily $100k/year) simply because the job is quite risky.
Union FUD? Really? Spend some time working in the trades (union and non-union gigs) and then come back and make declarative statements regarding unions.
Well I work with the trades on a daily basis. I stand by what I said. The new guys get screwed, the pay scale is entirely weighted towards the guys who have the most years in the union. For the first few years you get paid like crap. And when there are layoffs they trim from the bottom up based on years of service. So it doesn't matter if the guy who is 25 is busting his ass, the guy who is 50 and slacking all day gets paid three times as much and can't be fired.
I know for a fact that the younger guys resent the older guys (and the union that protects the older guys) far more than they resent the non-union or even at times the company itself.
Now I don't know much about non-union welders other than two friends I know. One started his own business making railings and fences and things like that and makes a good amount of money working for himself. He's non-union but also a small business owner so maybe that is a bad data point.
If we eliminated the union at my company, the welders would get paid on merit. It would be a very good thing for most of the younger guys who work their butt off. It would be a bad thing for most of the guys who have been here for 30 years.
So you're saying you'd rather have a quick bump in pay than annuity, pension, access to the local's placement services and guaranteed working conditions/benefits? That's your call ultimately but you'll excuse me if I think it seems a bit short-sighted. Out of curiosity do you have your journeyman's book yet?
Edited to add: nepotism and "good ol boy" networks are pretty much how business gets done everywhere, regardless of industry. A lot of people have this knee jerk reaction against such things and don't stop to consider this is the working end of "Networking".
While I agree with you, the claim programmers are generally underpaid got me thinking. If every programmer earns less compared to the field, nobody really does. (Think of the famous quote in The Incredibles: If everybody's incredible, nobody is.)
So either we're all underpaid compared to the value we generate, or we all overvalue everything we create.
Strange that there are no reliable metrics in a field filled with zeros and ones.
My viewpoint is from sheer volume of knowledge/skillset required to perform the basic task and the amount of effort required to stay current on the craft.
I'm not particularly passionate about welding, whereas I derive real pleasure from programming. For myself this enjoyment is sufficiently valuable to more than offset the economic loss. YMMV.
Sure - the fun of programming (or the relative comfort of a desk job) is a benefit of the job. That's why you're not necessarily underpaid just because a welder can earn more.
You are also assuming that you would be a good welder. Welding is incredibly difficult to do well, and the best ones deserve the good salary that they receive.
1) No state income tax. Read that again.
2) Cost of living is at least HALF of SF/SV/NYC
3) Real estate is actually affordable, even close in.
Now, I know there is the argument for needing to be in SF/SV for startups and tech, but Austin is a hotbed of tech activity and with more and more companies allowing remote work, it's worth a shot.
As a Texan that would love to see more talented engineers and innovative companies here, I agree with you.
But we have a weird mix here. Houston and Dallas have the rich people, but Austin has all the nerds. We need more cross pollination of both to ever be as attractive as Silicon Valley. That, and a lot less hardcore conservatives.
Almost everyone ITC is focusing on the developers' attitudes and whether they are "entitled" etc., but it seems to me the article was just as much (more?) about the impact that such salaries have on the companies. The author isn't so much arguing that it's "not fair" so much as "it's short-sighted on behalf of the employers," at least how I read it.
The developers' attitudes are relevant only insofar as they influence their actions in this case. If it's making it difficult for companies to hold on to talent, that's a big deal. If it's causing developers to grumble on IRC, not so much.
Silicon Valley engineers probably feel underpaid because of the high standard of living of that area. If they made $125k in Atlanta, for instance, they would be living very comfortably.
I'm still surprised at the number of Tech startups still locating themselves in Silicon Valley. I would figure if they started up in a cheaper city like Atlanta it would be more economical for them. But I guess they want to be near the talented people.
Although I would think if you build it, the talent will follow.
I think the thing people aren't taking into account is risk. Sure, you don't get to capture all the value you create, but you also aren't (usually) liable for any value you might accidentally destroy, and you still get paid even if your project generates $0.
I don't see any reason for the market not to sort it out in this case. Thresholds for starting an IT business are low nowadays and access to the information about the market is pretty easy.
"... But these tales of high-rolling nerds mask a greater truth, one that actually threatens to hurt the tech industry over the long term: Software engineers in the Bay Area are underpaid when you consider the billions in wealth their work creates. ..."
Now, let's move to another country: Spain in this case. A normal salary for a junior engineer is around 15K/year (euro) up to 30K for a senior developer. A big house (for europeans, 950sq ft) in a normal neighbor in Barcelona costs around 400K (euro), which would be like... 26 years of salary?
And I have compared different houses, for what I have seen, in general the price $/sq.ft. is pretty similar between both cities.
As I said, I understand that the engineers might not get back what they produce (and I agree) but I just wanted to give another point of view.