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Biggest factor is where you live... because we all know that people are paid according to the value they create, and bits forged in places with high rent are in

Biggest factor is where you live... because we all know that people are paid according to the value they create, and bits forged in places with high rent are inherently more valuable.

ng12 9y ago
It's the market at work, and roughly the way it's always been. It's easier to pay a developer more to live in NYC than move your finance shop elsewhere.
pascalxus 9y ago
Apparently, it's more profitable to pay developers nearly twice as much, than it is for a VC or CEO to take a airplane flight a few times a year.
- TheHegemon 9y ago
  It seems like even though being able to work remotely has improved. That improvement does not beat the cost/value of working in-person.
- olympus 9y ago
  Or it's theoretically worth twice as much to locate your company near the big tech companies. Can you really not entice people to move out to another city? Say Kansas City, which is quite pleasant. If they moved to K.C., a company could afford to pay devs the same salary as in San Fran, pay for devs to fly to a couple conferences each year, and give a bigger holiday bonus-- and they'd still come out ahead with the tax burden, office rent, support staff, etc. So is a hotshot dev from San Fran really refusing to move to K.C. for the same salary? They must know that their disposable income would double if they moved. I've been to both cities, and San Fran isn't that much better.
  - gleenn 9y ago
    I think the problem is that most people don't get offered the same in cheaper areas, that money gets absorbed by the company. Even if you argue that the actual take-home is cheaper, people aren't as good at evaluating those things, and SF etc sound like more fun. I say this as a dev in SF. I frequently skim different locations in the US and abroad and SF usually is highest paying.
tiggybear 9y ago
Actually we have known for a long time that most people's salaries are completely decoupled from the value they create. I've never seen anyone claim the opposite except for business owners and middle management. Everyone wages are more so tied to how much leverage they have. Increasing one's output has never been a great recipe for increasing compensation, however, increasing your leverage (get a new offer, get a government certified monopoloy, lower the supply of people with your skills, etc) will do wonders for your wage! Seriously, though.
- _Tev 9y ago
  When you say it like that you can naturally follow with "creating bigger value for the company increases your leverage", which seems to be trivially true. You might question rate of leverage increase between your value / other factors, but ranting about "decoupling" seems simply wrong.
  - tiggybear 9y ago
    Besides my own personal observations, I have heard and read so many anecdotes of people who can't get a decent raise to save their life until they have a competing offer. All of a sudden the company is happy to give them an extra 20% despite the employee not increasing their output. I see your point and while I think their is some merit to it, I think it boils down to, "If you were a boss, how would you calculate how much someone's salary should be?" I think the answer will reveal that you look at the market for a general range and use information asymmetry to push an employee's salary down as far as you can get it. Except the work they will be doing is often not a 1:1 at any other company, a good number of people can output 5-10x as much work as the worst employee but salaries never range that much except for in sales, etc. etc. etc. There's no reasonably efficient way to calculate someone's true value to the company (at least without a team of people dedicated to studying the inner workings of the company and the economy at large), so we rely on proxy measurements like leverage.
dogruck 9y ago
If a software developer job is done locally -- in an expensive city like SF -- then the employer must pay at least a living wage for the region. If the job can be performed remotely, then suddenly workers must compete with the global stock of candidates. And there are many locations around the globe that are much cheaper than low-cost areas in the US.

Biggest factor is where you live... because we all know that people are paid according to the value they create, and bits forged in places with high rent are inherently more valuable.

ng12 9y ago

It's the market at work, and roughly the way it's always been. It's easier to pay a developer more to live in NYC than move your finance shop elsewhere.

pascalxus 9y ago

Apparently, it's more profitable to pay developers nearly twice as much, than it is for a VC or CEO to take a airplane flight a few times a year.

TheHegemon 9y ago
It seems like even though being able to work remotely has improved. That improvement does not beat the cost/value of working in-person.
olympus 9y ago
Or it's theoretically worth twice as much to locate your company near the big tech companies. Can you really not entice people to move out to another city? Say Kansas City, which is quite pleasant. If they moved to K.C., a company could afford to pay devs the same salary as in San Fran, pay for devs to fly to a couple conferences each year, and give a bigger holiday bonus-- and they'd still come out ahead with the tax burden, office rent, support staff, etc. So is a hotshot dev from San Fran really refusing to move to K.C. for the same salary? They must know that their disposable income would double if they moved. I've been to both cities, and San Fran isn't that much better.
- gleenn 9y ago
  I think the problem is that most people don't get offered the same in cheaper areas, that money gets absorbed by the company. Even if you argue that the actual take-home is cheaper, people aren't as good at evaluating those things, and SF etc sound like more fun. I say this as a dev in SF. I frequently skim different locations in the US and abroad and SF usually is highest paying.

tiggybear 9y ago

Actually we have known for a long time that most people's salaries are completely decoupled from the value they create. I've never seen anyone claim the opposite except for business owners and middle management. Everyone wages are more so tied to how much leverage they have. Increasing one's output has never been a great recipe for increasing compensation, however, increasing your leverage (get a new offer, get a government certified monopoloy, lower the supply of people with your skills, etc) will do wonders for your wage! Seriously, though.

_Tev 9y ago
When you say it like that you can naturally follow with "creating bigger value for the company increases your leverage", which seems to be trivially true. You might question rate of leverage increase between your value / other factors, but ranting about "decoupling" seems simply wrong.
- tiggybear 9y ago
  Besides my own personal observations, I have heard and read so many anecdotes of people who can't get a decent raise to save their life until they have a competing offer. All of a sudden the company is happy to give them an extra 20% despite the employee not increasing their output. I see your point and while I think their is some merit to it, I think it boils down to, "If you were a boss, how would you calculate how much someone's salary should be?" I think the answer will reveal that you look at the market for a general range and use information asymmetry to push an employee's salary down as far as you can get it. Except the work they will be doing is often not a 1:1 at any other company, a good number of people can output 5-10x as much work as the worst employee but salaries never range that much except for in sales, etc. etc. etc. There's no reasonably efficient way to calculate someone's true value to the company (at least without a team of people dedicated to studying the inner workings of the company and the economy at large), so we rely on proxy measurements like leverage.

dogruck 9y ago

If a software developer job is done locally -- in an expensive city like SF -- then the employer must pay at least a living wage for the region. If the job can be performed remotely, then suddenly workers must compete with the global stock of candidates. And there are many locations around the globe that are much cheaper than low-cost areas in the US.