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I think the explanation for bimodal dev salaries is pretty clear, and is similar to the explanation for the bi-modality in Lawyer salaries. Google, Facebook, A

I think the explanation for bimodal dev salaries is pretty clear, and is similar to the explanation for the bi-modality in Lawyer salaries. Google, Facebook, Amazon, and whatever other big name you want to throw in the pot, are competing for developers. However, they are not competing for the same developers as Epic Systems, for example. FAANG (or whatever) are competing for a highly skilled subset of devs that can meet their demanding hiring criteria. Similarly, top law firms are only competing for a subset of all law grads -- those that meet their demanding hiring criteria. The difference here is that, in law, that criteria is focused around a prestigious degree. Presumably, this is because it is hard to thoroughly test a lawyer's competency as a lawyer in an interview setting. However, in programming, many top companies, apparently, find that a series of intense whiteboard interviews are sufficient to determine whether or not a dev meets their high standard. However, we also have a shortage of devs across the board, for all companies. If CS enrollment increased by 100%, then presumably the "lower" distribution of salaries would stabilize at a lower number -- probably close to what traditional engineers make nowadays. However, the salaries of the GooBooks of the world will only be affected if a sufficiently high proportion of those grads can meet a very difficult hiring criteria. Similarly, law schools have seen a dramatic increase in enrollment over the past few decades. Lower salaries have stabilized, since the market is now saturated. However, the salaries for top law firms remain high, because a similarly low number of candidates meet their difficult hiring criteria: Harvard, Yale, and etc. are producing more or less the same number of law grads as before, with respect to demand. This is why Google can open an office across the street from Epic and yet still pay devs twice as much. This is also why I don't think immigration is a huge factor. Sure, if companies were able to immigrate significantly more workers, then salaries at top companies might drop to a degree. But the real drop would be seen in the salaries of devs at typical companies. EDIT: grammar

dhd415 9y ago
I think skill differentials in programming is a contributing factor to the bimodal distribution. I think there's also another factor which is the degree to which one is an active "curator" of one's own career. I've known some devs who were quite talented but were perfectly content to stay at low-paying jobs where the value they generated for their companies for developing CRUD or other low-multiplier apps was moderate. Others who were much more deliberate about developing skills in areas of software where much higher multiples were possible and choosing jobs strategically to build their careers made MUCH more money than the former despite not necessarily being more technically skilled. These latter developers are much more likely to be the ones working at FAANGs (or whatever) for $200k+.
- salmonfamine 9y ago
  Sure, and top companies are not necessarily discriminating amongst dev candidates based solely on technical merit. In fact, there are plenty of recent articles that claim that Google is looking for more and more "soft" skills in addition to high technical merit. Point being, there are probably lots of factors that combine to make a candidate skilled enough to get hired at Facemazon. It's just that having that combination of skills is rare, so the salary gap persists.
JamesBarney 9y ago
Lawyer salaries are bimodal for a very specific reason. No law firms really believe that a graduate in the top 9% is worth 160k/year, but a graduate in the 11th percentile is only worth 60k. But they all have to pay the same because it's a signal to their clients that they are the best. If they paid less than their clients would consider their firm second tier not top tier. And Google is hiring the same devs as everyone else. Having worked in a large company and seeing several people move to Google. They got some smart devs who stood out on their team, but they also got mediocre devs. The average dev they poached was definitely better than the average dev who worked there but it was a moderate difference in degree not kind.
- salmonfamine 9y ago
  Maybe, but top firms are still only hiring lawyers from top schools. And as far as salaries go, that bottleneck is the only differentiating factor. You could also argue that maybe Facebook doesn't need devs to be able to independently produce Tarjan's algorithm while standing on their heads, blindfolded. But for some reason, these companies believe that it is essential. Maybe that's well-founded -- maybe not. But it remains the case.
- bpicolo 9y ago
  Whatever Cravath pays, the rest of the Big-law-NYC industry follows.
epmatsw 9y ago
Interesting to choose Epic as an example. In my exit interview there (leaving for SV), the whole interview was about how they could be more competitive when hiring against Google etc (obvious answers were vacation policies and equity, where Epic was woefully behind). So Epic is (or was, ~3 years ago) definitely competing for the same developers as those big companies.
- salmonfamine 9y ago
  I just chose Epic because the author did. I honestly don't know anything about it. However, I do have to point out that it seems that Epic is trying to become more competitive with regard to that same subset of engineers that Google hires. Presumably, if they're trying to become more competitive, then they're not yet competitive. Either Epic will have to pay some engineers the same as what Google pays (including equity etc.) or they won't remain competitive for that small pool of devs. Also, worth noting that I'm saying that as someone that was once rejected by Google on a first-round phone screen.
  - logfromblammo 9y ago
    When I left Epic, they had just reneged on an equity compensation promise by issuing me some form of "shadow" stock tokens, because they didn't want to bring their number of real owners up past a point that would trigger automatic financial disclosures. I read the accompanying paperwork, and decided that I needed to kick my job search into an even higher gear, immediately. Just one of the many reasons I had for moving on. (2007) At that time, they were not offering salaries that were even competitive with other companies in Madison. Never mind about Seattle or SV. I had four managers in 2.25 years, because three of them left for higher pay elsewhere almost as soon as they got promoted. I left the fourth for ~20% higher pay. I would guess that any major tech employer could stroll into town and hire the best 50% from under Epic's feet in less than two weeks, while still saving money on salaries compared to SV. Queen Judy is not taking that company public, and would rather divert her profits to charity than to employees. There won't be options or RSUs. The only reason people might stick around is the cult-like atmosphere.
bdcs 9y ago
>Sure, if companies were able to immigrate significantly more workers, then salaries at top companies might drop to a degree Is this not the lump of labor fallacy?
- salmonfamine 9y ago
  Might be. I am not an economist. However, I think the rest of my point still stands without that concession.

dhd415 9y ago

I think skill differentials in programming is a contributing factor to the bimodal distribution. I think there's also another factor which is the degree to which one is an active "curator" of one's own career. I've known some devs who were quite talented but were perfectly content to stay at low-paying jobs where the value they generated for their companies for developing CRUD or other low-multiplier apps was moderate. Others who were much more deliberate about developing skills in areas of software where much higher multiples were possible and choosing jobs strategically to build their careers made MUCH more money than the former despite not necessarily being more technically skilled. These latter developers are much more likely to be the ones working at FAANGs (or whatever) for $200k+.

salmonfamine 9y ago
Sure, and top companies are not necessarily discriminating amongst dev candidates based solely on technical merit. In fact, there are plenty of recent articles that claim that Google is looking for more and more "soft" skills in addition to high technical merit. Point being, there are probably lots of factors that combine to make a candidate skilled enough to get hired at Facemazon. It's just that having that combination of skills is rare, so the salary gap persists.

JamesBarney 9y ago

Lawyer salaries are bimodal for a very specific reason. No law firms really believe that a graduate in the top 9% is worth 160k/year, but a graduate in the 11th percentile is only worth 60k. But they all have to pay the same because it's a signal to their clients that they are the best. If they paid less than their clients would consider their firm second tier not top tier. And Google is hiring the same devs as everyone else. Having worked in a large company and seeing several people move to Google. They got some smart devs who stood out on their team, but they also got mediocre devs. The average dev they poached was definitely better than the average dev who worked there but it was a moderate difference in degree not kind.

salmonfamine 9y ago
Maybe, but top firms are still only hiring lawyers from top schools. And as far as salaries go, that bottleneck is the only differentiating factor. You could also argue that maybe Facebook doesn't need devs to be able to independently produce Tarjan's algorithm while standing on their heads, blindfolded. But for some reason, these companies believe that it is essential. Maybe that's well-founded -- maybe not. But it remains the case.
bpicolo 9y ago
Whatever Cravath pays, the rest of the Big-law-NYC industry follows.

epmatsw 9y ago

Interesting to choose Epic as an example. In my exit interview there (leaving for SV), the whole interview was about how they could be more competitive when hiring against Google etc (obvious answers were vacation policies and equity, where Epic was woefully behind). So Epic is (or was, ~3 years ago) definitely competing for the same developers as those big companies.

salmonfamine 9y ago
I just chose Epic because the author did. I honestly don't know anything about it. However, I do have to point out that it seems that Epic is trying to become more competitive with regard to that same subset of engineers that Google hires. Presumably, if they're trying to become more competitive, then they're not yet competitive. Either Epic will have to pay some engineers the same as what Google pays (including equity etc.) or they won't remain competitive for that small pool of devs. Also, worth noting that I'm saying that as someone that was once rejected by Google on a first-round phone screen.
- logfromblammo 9y ago
  When I left Epic, they had just reneged on an equity compensation promise by issuing me some form of "shadow" stock tokens, because they didn't want to bring their number of real owners up past a point that would trigger automatic financial disclosures. I read the accompanying paperwork, and decided that I needed to kick my job search into an even higher gear, immediately. Just one of the many reasons I had for moving on. (2007) At that time, they were not offering salaries that were even competitive with other companies in Madison. Never mind about Seattle or SV. I had four managers in 2.25 years, because three of them left for higher pay elsewhere almost as soon as they got promoted. I left the fourth for ~20% higher pay. I would guess that any major tech employer could stroll into town and hire the best 50% from under Epic's feet in less than two weeks, while still saving money on salaries compared to SV. Queen Judy is not taking that company public, and would rather divert her profits to charity than to employees. There won't be options or RSUs. The only reason people might stick around is the cult-like atmosphere.

bdcs 9y ago

>Sure, if companies were able to immigrate significantly more workers, then salaries at top companies might drop to a degree Is this not the lump of labor fallacy?

salmonfamine 9y ago
Might be. I am not an economist. However, I think the rest of my point still stands without that concession.