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Will the current high tech salaries last?
24 points by joconde on Feb 2, 2022 | hide | past | favorite | 42 comments
I've been reading a lot here about how high salaries currently are, due to a shortage of engineers/the Big Quit/startups being showered with funding/whatever other reasons. I see figures like 200k-300k in the Bay Area, and maybe similar for remote positions.

I'm getting FOMO as a young engineer in deep learning/computer vision at a small European company. My plan was to stay at my interesting job with average pay until I stop growing, then hopefully jump to a company that pays better when I feel like it. But what if the market shifts and salaries go down?

Is there any indication of what the job market will become for tech employees in the next few years?




Salaries yes, stock compensation not necessarily. It's very rare to cut salaries because you end up demoralizing employees, who then aren't productive, so why bother to pay them anything? That's why companies do layoffs, where they just eliminate jobs rather than pay less.

Keep in mind that when everybody gets paid a lot, everything is expensive. That's the real way that high salaries return to the norm: everything else catches up. Bay Area is already the most expensive part of the U.S; you might get paid $200-300K, but taxes eat half that, rents are $2.5-3K/month, mortgage payments are $10K+, daycare is about $2-3K, restaurant meals are $30, etc.

Not sure how that compares to your country - if you're coming from Eastern Europe you're going to get sticker shock, but a lot of central/western European regions (eg. Zurich, Paris, Scandinavia) are already there. It's a different type of expensive though: in general consumer goods, food, housing, and gas cost more in Europe, but healthcare, education, and childcare cost more in the U.S.


Sometimes it sounds like bay area programmers think how expensive their area is, is how it is for programmers elsewhere. I also get paid around the same range in NYC, but my mortgage is nowhere near 10k, my taxes eat maybe 40%, and I can definitely find restaurant meals for less than $30.

The high expenses of the bay area are a policy choice by the local and state government to disallow investment. As such everyone is competing for the same old housing stock and office space that cost a 1/3rd of what it does now years ago. In effect, house owners and landlords are appropriating tech profits to themselves.

I hope the banning of single home zoning in California helps to alleviate this issue.


OP explicitly mentioned Bay Area in his post. I'd agree that housing policy is brain-dead in the Bay Area and that causes a lot of the high CoL; the other major factor is that these tech salaries are a significant fraction of total earners, which gives people selling to them enough of a market to raise prices. If 1% of the population makes $300K/year, they get to live like a 1%er. If 10% of the population makes $300K/year, they live like a 10%er.


Taxes won't take half your pay, more like a third, maybe a bit more if you're towards the topend. Marginal tax rate != Effective tax rate. That said, I agree as for the rest.


Nothing helps fine-tune math skills like seeing 6 figures go to taxes


With FAANG salaries I've seen paystubs showing 47% total tax on the paystub, not including property and sales tax.


Did you take into account the tax return?


This doesn’t need to be a debate.

Simply calculate it and look at the effective tax rate.

Here https://smartasset.com/taxes/california-paycheck-calculator

And use the Total Compensation data from https://levels.fyi

You are taxed on RSUs the same as salary.


This calc doesn't include payroll tax


> But what if the market shifts and salaries go down?

If youre making decent pay & enjoy your job that sounds like a dream.

Enjoy your life, work isn't everything. Bay Area isn't that nice. You are likely able to live somewhere better (or can move somewhere nicer). I regret moving away from family & friends (albeit I do like the area I'm in now). Spend time with them.

You won't be worrying about your paycheck on your deathbed, but rather whether you lived a fulfilling life. I am certain more pay for less interesting work doesn't match that description ;)


I agree, but I also expect money to matter to these goals in the long run. For example, if I have kids someday, I'd be much happier if I have financial resources to live in a nice place, take more time off, and pay for travel.

Money for the sake of it isn't the goal, it's more about being able to finance projects I find fulfilling.


You don't need a absurdly high salary to raise a comfortable family or live a comfortable life.

Be careful with following that thinking trap. If you already think you're not making enough now, you'll fall down the rabbit hole of lifestyle creep where many high paying engineers struggle to get out of.


> You don't need a absurdly high salary to raise a comfortable family or live a comfortable life.

I could do with absurdly high savings though. For everything from future projects to safe vacations and financial emergencies.

The lifestyle creep only happens if I actually spend that money instead of investing it.


There is no shortage of engineers to begin with. I have interviewed enough in my life to be certain about it. Curiously, it's not even about the alleged higher compensation required by senior engineers. I never asked for too much and was either rejected or given more than I had expected. The world is crazy and leetcoding is the only game in town. Just live with it.

America is _very_ different from the EU. Ideally you want to be here until you get about 35 yo. And move back after that age. Compensation packages in CA are certifiably insane. Many of them don't require anything special in actual day-by-day work. Passing the interviews is the hardest part by far.

But when you get older and decide to start a family your compensation won't buy you much, from houses to decent schools. And those 44% stolen by the government become 33% with a wife and a child. And provide you with some really nice things not easily bought for money in the US.

I have heard people saying that programmers won't be necessary in such numbers for 20 years. I have personally thought that Bay Area compensation is unreal for a decade. With your DL/CV expertise you are perfectly positioned for the next 20.

In summary, treat CA as a gold rush. You come here to strike rich or die trying. There's no middle ground here.


Labor shortages and inflation will keep the salaries high for years to come, especially, in high skill jobs. The real danger is that universities will start to crank out a large number of engineering graduates. But that's unlikely, since it takes a select few to enjoy engineering as a career. Everyone likes the pay but it's a hard career to enjoy long term. You should keep an eye on salaries outside your company to make sure you don't get too behind in pay relative to other companies. Don't count on your current employer to keep their wages competitive.


Yes they will last. Labor shortages drive wages up. This next part may not be what people want to hear but here goes. The reason for labor shortages of software people is because companies are automating work which makes things cheaper and sometimes has the outcome of whatever person doing the automated job being let go. There for sure are tech jobs which aren’t involved directly with automating but indirectly contribute.

I’m not saying it’s good or bad, it just is what happens. Larger corporations sometimes will seek out cheaper software people in other parts of the world as those areas produce more software people.


They also create jobs like personal grocery shopper/uber driver.


FB stock fell today because of tiktok competition. FB is part of FAANG which sets compensation standard in bay area. I think Bay area salaries will stay high for foreseeable future,


Immigrate to the United States, specifically to the Bay Area. The best companies are built in the Bay Area, because there is a huge amount of talent, and the living standards are very high because of moderate climate, excellent food and produce, multiculturalism, decent infrastructure and excellent connections to the rest of the world. The access to opportunities to work at excellent technology companies at any stage (a twinkle in someone's eye to mature, established market maker) is simply not matched by any other place, period. This is despite horrific public transportation, ridiculous housing costs, sky-high taxation, general intolerance to non-left-leaning political viewpoints, NIMBYism and rampant environmental degradation (Silicon Vally is blanketed with EPA superfund sites). In fact, the Bay Area attracts orders of magnitude more venture capital that's invested in its main metropolitan areas than any other place in the world.

As far as the job market is concerned, I wouldn't worry at all.

A few caveats:

1. Give up any expectation of owing a home (to be precise, a single-family home with a yard) in Silicon Valley proper.

2. If you want to follow the conventional path of marrying and raising children, then marry a someone who can pull the same compensation as you (software developer, doctor, lawyer at white-shoe firm). You can't raise kids on one income here (you can't send them to private school, for instance) unless you are absolutely certain that the public school system will work out for your child.

3. Be prepared to be very lonely if you do not have a friends' circle already established here. It is difficult to make friends and connections and keep up because of the all-consuming nature of work and distances involved (e.g., Palo Alto to San Francisco takes 1 hour minimum, so expect to spend 2 hours simply on driving to and from your friends in the City or down in the Peninsula or South Bay).

4. If you are old (i.e., 35+), then you will have more difficulty getting into good jobs. Ageism is rampant and job interview processes are geared towards young or unattached people who can spend a great deal of time on tech interview prep on an ongoing basis. As changing jobs regularly (2 years is now considered the norm) is the only good way of keeping your comp at market level, expect to be in interview mode for at least half your tenure at every job (assuming your tenure is 2 years).


> Be prepared to be very lonely if you do not have a friends' circle already established here.

That's an absolutely prohibitive cost, and not how I want to spend my 20s and 30s. Thank you for mentioning it.

I'm not sure the high salaries are worth everything you mentioned. My current area is a bit like that, but at least the big cities are closer. Do you work there? How do people deal with the isolation?


While the problems I have mentioned are big ones, the day to day is generally quite pleasant. Also, if hybrid work takes hold, then owning housing may be less of a pipe dream provided you are okay with long commutes.

People deal with the isolation by taking up hobbies and joining affinity groups that are associated with them. For this there is a lot of opportunity.

I should also point out that high salaries will be eaten up completely by the sky high costs of everything in the Bay Area. It’s only equity windfalls, if properly invested, that will truly get you into a good place financially. A lot of people decide that a few years of this will net them enough money to attain their goals someplace cheaper (the Sun Belt, for instance), so they jump into the rat race with the understanding that it is finite and transient.


> I should also point out that high salaries will be eaten up completely by the sky high costs of everything in the Bay Area.

Interesting. Can you define "eaten up"? With my west-European salary, I can save around 1k/month. Since junior SWEs in California can apparently make 100 to 150k, I imagine that an "eaten-up" 300k would still let me save much, much more than in Europe. Is that unrealistic?


300k will last if you are a dual income couple with no kids and you don’t live extravagantly. Here’s a breakdown

105000 in taxes. 36000 towards maxing out your retirement accounts. 9000 in other investments and savings per year. 55000 - 60000 per year for renting a house with a yard in a good location. 5000 - one small vacation per year. 12000 - grocery and food expenses. 2500 - Insurance for two high end cars. 4000 - Gas for two cars plus maintenance expenses. 1800 - Internet and cellphone per year. 600 - Streaming for a couple of services per year. 3000 - Health Insurance out of pocket expenses per year. 5000 - other entertainment expenses such as gifts for friends, fine dining, concerts etc. 4000 - Home goods, utilities per year.

You have spent 243000 roughly so far.

If you have children 25000 per year per child for childcare for young children or 12-13000 per year per child for after school care and summer camps per kid If you send children to private school, 20000 per year per child. Miscellaneous expenses for children: 2000 per year per child.

If you have one child and don’t send him to public school, you are out an additional 35000 for 278000. If you send him to public school you are out 258000.

If you have two children and don’t send them to public school you are now out an additional 70000 for 313000. If you send both to public school you are out 273000.


Very informative, thank you.


They better, everything is expensive and only getting worse. Taxes and rent is absurd. I'm getting robbed every month.


If you're young and free (no kids no mortgage), switch now. That is advice I wish I followed :)


I like the spirit and want to :), but my life has been stressful in the last few years, so I'd like to delay the jump. I value stability and staying close to my current friends in the short-term.

Unless there are significant opportunities I'd be missing out on by not leaving right now. That's why I asked.


The stress only increases in the next stages of life (spouse, mortgage, kids).


Spouses work these days and more and more people choose not to have kids, optimizing for _their_ life quality rather than someone elses. So I wouldn't say that stress only increases. Stress only increases if you want the stress, otherwise I'd say stress decreases and a person has more and more savings, can afford better life quality, etc.


It's been decreasing so far, with financial safety, a saner schedule (no more absurd school deadlines for subjects I don't even care about), and more freedom of movement (one gets pretty isolated with no car in my area).

I expect it to keep getting better.


Switch to what? Any suggestions?


Making more money now is a much better option than making more money in the future (since you can invest your excess and have it grow independently of your salary).

Why not try applying for some full remote positions at FAANGs or whatever big tech employers you have in your area?


> Why not try applying for some full remote positions at FAANGs or whatever big tech employers you have in your area?

Machine learning-focused jobs at FAANG seem harder to get than regular "software engineer" ones, especially in computer vision. I don't want to stop learning by switching early to a remote coding job.

I'd be looking more at startups and corporate labs that do interesting work and don't require a PhD, but that requires skills I'm learning in my current job.


Let's say that people answer with a definitive yes or a definitive no - what would you do differently given that information?


If salaries are likely to go down significantly and for a long time soon, I'd double my job-searching efforts, to have to option of leaving within a year or two.

If the current situation seems stable, I'd take it easy and enjoy the next couple years without the stress of having to move soon. I'm not that keen on turning my life upside down right now unless there's a significant gain to make. (The last few years were stressful so I'd like to take it easy for a while.)

I'm not sure why you asked this, but I can assure you I'm not trying to waste anyone's time, and I have a rational reason for asking.


I didn't mean to come across confrontational, I really don't think that you can do much either way. For example:

> I'd double my job-searching efforts, to have to option of leaving within a year or two.

Job searching doesn't work that way - if it goes well you'll end up with a bunch of offers that you'll need to accept or reject within some time frame; you don't get to bank all the offers you get and use them in two years.

It's always good to be employable, have relevant skills, be able to interview well etc. - this applies to good and bad markets.


> I didn't mean to come across confrontational

Me neither :)

> Job searching doesn't work that way - if it goes well you'll end up with a bunch of offers that you'll need to accept or reject them within some time frame

In that situation, I would be ready to accept leaving in a few months. I would prefer to wait, but not if it brings salaries down significantly.

> It's always good to be employable, have relevant skills, be able to interview well etc. - this applies to good and bad markets.

That's good advice. I'll keep looking, but there's a difference between keeping an eye on the market and preparing to leave quickly.


I personally value an interesting daily work life over money. Unless you are woefully under paid, my advice is do what interests you.


Yes. The skill and value of top tier engineers has been increasing exponentially for years now.


Tech will continue grow.

Real issue is brain drain from other industries.


Wouldn't brain drain strengthen engineers' position by causing even more labor shortage?


I think Sevii means brain drain from other industries in to tech.

E.g. potential doctors and lawyers deciding that being a programmer has way better ROI than all the years and debt involved with medical school or law school




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