3 ms·

"We don't understand it"? Source? Seems pretty well understood to me: we generate a lot of value through the work we do.

awinter-py 7y ago
value isn't the whole story -- there's a large supply of programmers who are much cheaper than what a stanford grad makes (hacker schools and eastern europe / india are examples) there are good arguments for why american companies can't outsource effectively for all roles, or the higher quality of a stanford grad, but they aren't simple arguments and they depend as much on low-quality managers as high-quality talent even in a high-price city with a reasonable tech ecosystem like london, programmers aren't paid as much as SF or even NY. comp is complicated
twblalock 7y ago
So do doctors, as per the example in the article, yet the barrier to entry is much higher for them. This is not about value created -- it's about the dynamics of the labor market. If there were a bunch of people who could create as much value as you, but demand a lower salary, companies would hire them instead and pay them less.
- aerovistae 7y ago
  ... But there aren't.
  - twblalock 7y ago
    The article raises the question of why we can't explain the absence of such people, given how much easier it is to at least get your foot in the door in tech compared to other professions like medicine and law.
    - tick_tock_tick 7y ago
      Maybe their assumptions are flawed?
- millstone 7y ago
  It is about value created. A programmer who can find a way to extract $1 per year, from a million users, is worth $1m. But doctors are constrained by their personal 1-1 relationships: no doctor can handle a million patients.
  - twblalock 7y ago
    It is about supply and demand in the labor market, full stop. People aren't paid based on the value they create. They are paid based on how hard it is to find other people who can do the same thing.
    - jfim 7y ago
      People are paid based on both the value they create, and how hard it is to hire them. If someone being hired will provide $10 of value for the company, then that is the ceiling for their wages. On the other side, the floor for their wages is the lowest price sometime will accept to provide that value to the company.
Agathos 7y ago
It's worth pointing out that generating a lot of value (productivity) is not a guarantee that your wages will grow in proportion to that value. In fact, for the last 50 years, in most careers, wages have not tracked productivity. This is the "Productivity-Pay Gap." (https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/ ) While that gap has opened for most Americans, it looks like the average progammers' wages are right in line with productivity growth (maybe not Silicon Valley wages, but I think those are pretty disconnected from the rest of the country anyway). So the question is not, "why are programmers' wages so inflated?" but instead, "what depressed everyone else's wages and will programmers remain immune?" The "what" has been a noisy political argument in the last several years especially. Suspects include foreign competition, automation, changes in corporate management, lax antitrust enforcement, and the decline of unions. Foreign competition is an obvious and much-discussed threat. My Job Went to India (And All I Got Was This Lousy Book) was the title of a real book in the wake of the dot-com crash. More recently that threat seems to have receded, if temporarily. Companies still employ offshore programmers where they can, but the consensus has emerged for now that some combination of language differences, cultural differences, quality of training, and the difficulty of coordinating across time zones holds them back from taking over the most complex tasks. I see this as a temporary reprieve. Foreign programmers' quality will improve, both sides will learn to cope with language and cultural differences, tools for remote work are rapidly improving, and perhaps most importantly, competitive companies are being founded outside the US. For those companies, there are no language, cultural, or timezone differences in hiring local talent. I don't see automation as a threat. Or rather, programmers' jobs have been "automated away" on a regular basis, but you still need programmers to operate the automation! Assemblers replace machine code, compiled languages replace assembly, higher-level languages replace lower-level languages, off-the-shelf frameworks and middleware replace starting from scratch... After each change, programmers are more productive and more valuable, not less. This is unlike manufacturing, where the worker who is replaced by a robot may never learn to program that robot. I don't see the last three (corporate management, antitrust, unions) as especially important changes but others may disagree. I certainly don't see any reason programmers should be immune, except that the above two factors give them a lot of leverage. Lax antitrust enforcement was obviously a factor when some of the big companies conspired to hold down wages, but again, it doesn't seem to be enough by itself to hold wages down. Programmers seem to have done okay without unions, but I do wonder what it would be like if programmers had a guild system the way physicians and lawyers do.

awinter-py 7y ago

value isn't the whole story -- there's a large supply of programmers who are much cheaper than what a stanford grad makes (hacker schools and eastern europe / india are examples) there are good arguments for why american companies can't outsource effectively for all roles, or the higher quality of a stanford grad, but they aren't simple arguments and they depend as much on low-quality managers as high-quality talent even in a high-price city with a reasonable tech ecosystem like london, programmers aren't paid as much as SF or even NY. comp is complicated

twblalock 7y ago

So do doctors, as per the example in the article, yet the barrier to entry is much higher for them. This is not about value created -- it's about the dynamics of the labor market. If there were a bunch of people who could create as much value as you, but demand a lower salary, companies would hire them instead and pay them less.

aerovistae 7y ago
... But there aren't.
- twblalock 7y ago
  The article raises the question of why we can't explain the absence of such people, given how much easier it is to at least get your foot in the door in tech compared to other professions like medicine and law.
  - tick_tock_tick 7y ago
    Maybe their assumptions are flawed?
millstone 7y ago
It is about value created. A programmer who can find a way to extract $1 per year, from a million users, is worth $1m. But doctors are constrained by their personal 1-1 relationships: no doctor can handle a million patients.
- twblalock 7y ago
  It is about supply and demand in the labor market, full stop. People aren't paid based on the value they create. They are paid based on how hard it is to find other people who can do the same thing.
  - jfim 7y ago
    People are paid based on both the value they create, and how hard it is to hire them. If someone being hired will provide $10 of value for the company, then that is the ceiling for their wages. On the other side, the floor for their wages is the lowest price sometime will accept to provide that value to the company.

Agathos 7y ago

It's worth pointing out that generating a lot of value (productivity) is not a guarantee that your wages will grow in proportion to that value. In fact, for the last 50 years, in most careers, wages have not tracked productivity. This is the "Productivity-Pay Gap." (https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/ ) While that gap has opened for most Americans, it looks like the average progammers' wages are right in line with productivity growth (maybe not Silicon Valley wages, but I think those are pretty disconnected from the rest of the country anyway). So the question is not, "why are programmers' wages so inflated?" but instead, "what depressed everyone else's wages and will programmers remain immune?" The "what" has been a noisy political argument in the last several years especially. Suspects include foreign competition, automation, changes in corporate management, lax antitrust enforcement, and the decline of unions. Foreign competition is an obvious and much-discussed threat. My Job Went to India (And All I Got Was This Lousy Book) was the title of a real book in the wake of the dot-com crash. More recently that threat seems to have receded, if temporarily. Companies still employ offshore programmers where they can, but the consensus has emerged for now that some combination of language differences, cultural differences, quality of training, and the difficulty of coordinating across time zones holds them back from taking over the most complex tasks. I see this as a temporary reprieve. Foreign programmers' quality will improve, both sides will learn to cope with language and cultural differences, tools for remote work are rapidly improving, and perhaps most importantly, competitive companies are being founded outside the US. For those companies, there are no language, cultural, or timezone differences in hiring local talent. I don't see automation as a threat. Or rather, programmers' jobs have been "automated away" on a regular basis, but you still need programmers to operate the automation! Assemblers replace machine code, compiled languages replace assembly, higher-level languages replace lower-level languages, off-the-shelf frameworks and middleware replace starting from scratch... After each change, programmers are more productive and more valuable, not less. This is unlike manufacturing, where the worker who is replaced by a robot may never learn to program that robot. I don't see the last three (corporate management, antitrust, unions) as especially important changes but others may disagree. I certainly don't see any reason programmers should be immune, except that the above two factors give them a lot of leverage. Lax antitrust enforcement was obviously a factor when some of the big companies conspired to hold down wages, but again, it doesn't seem to be enough by itself to hold wages down. Programmers seem to have done okay without unions, but I do wonder what it would be like if programmers had a guild system the way physicians and lawyers do.