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I would argue there is no such thing as overpriced labor when its the market that sets the price. You will never get a Mercedes for the price of a Honda. So be

I would argue there is no such thing as overpriced labor when its the market that sets the price. You will never get a Mercedes for the price of a Honda. So be skeptical when a politician or mega corp manager utters the words "labor shortage" - there is no such thing.

softwaredoug 6y ago
Sure, though it takes a bit of time for the actors to become conscious they'll get the same value at a lower price.
- game_the0ry 6y ago
  They've had plenty of time and they were plenty conscious. And here I am getting paid well for writing code without a comp sci degree.
  - softwaredoug 6y ago
    Things have changed a lot though. Covid is pushing us to a remote-heavy world and that's changing how people understand the value of labor. I can imagine, for example, good skill in peripheral areas will get paid more, poor skill in less peripheral areas will be seen as overpriced.
blocked_again 6y ago
There is definitely a shortage of good quality Engineers in SF. That's the key reason why the engineering salary is so high. Also the weird housing laws. The same engineer who is making 30k in India makes 5 or 6 times the salary when moved to the SF office. Similarly the Engineer who makes 200k+ in SF gets 4 or 5 times less when moved back to India. Comparing Mercedes to Honda is not the right comparison. There are good and bad engineers in both the US and India. So why pay 150k+ for a Honda in US when you can get the same Honda in India for 30k.
- 0max 6y ago
  Sounds like African automobile tariffs when you put it that way
  - blocked_again 6y ago
    Let me put it this way. Is the reason why a 1 bed room house price in SF is 5 times or more higher than that of a similar house in Kiev or Bangalore because it's 5x+ the quality? No. It's mainly because the supply of housing cant keep up with the demand. As you can see, the housing price started to drop as more and more companies are going remote.
- gruez 6y ago
  >There is definitely a shortage of good quality Engineers in SF. That's the key reason why the engineering salary is so high. Do we say there's a caviar shortage because it's expensive? Or say there's a CEO shortage because CEO compensation is high?
  - blocked_again 6y ago
    Good CEOs in good companies makes much more than the average CEOs in average companies. Every company in the USA wants a good CEO. But there are only very limited number of CEOs in the USA that has a good track record of running a successful company. So companies are willing to pay more and more for the top CEOs. It's the same reason why drivers are paid very low. If there were only 100 drivers in SF who were capable of taking you from point A to point B with a reasonable amount of certainty they would be also be paid in millions. Everything is supply and demand. In case of SanFrancisco, the supply of good engineers that are available to be hired used to be limited compared to the demand. Once you remove the restriction of being able to be physically present in SF, the supply increases much more than the demand. Which results in the reduction of salaries.
    - ryandrake 6y ago
      > In case of SanFrancisco, the supply of good engineers that are available to be hired used to be limited compared to the demand. If this were the case, salaries would rise until the supply equaled demand. People have been calling this "shortage of engineers" for decades. A shortage means that demand exceeds supply at a given price (salary). If the market were free to adjust there can't be a long-term shortage. Salaries would quickly rise to the point where supply and demand were equal. If there is really a persistent shortage, why hasn't this happened? When you talk about goods, long-term shortages can happen when either the supply is artificially constrained or there are some kind of price controls in effect. Which one is causing this shortage? There is no labor cartel in software. Nothing like the AMA keeping the supply of doctors limited. Anyone can learn from online sources and become proficient, and universities graduate truckloads of developers. So there's no artificial labor constraint. There is also no externally-mandated maximum salary for developers. So how can there be a long-term shortage?
vnnkov 6y ago
You literally could buy mercedes for price which could have 2 times difference based on location.
jbay808 6y ago
So what concept is the word "shortage" supposed to communicate?
- ballenf 6y ago
  "The best people applying for our open positions keep rejecting our salary offers and turnover is high despite regular 2% pay rises."
  - jbay808 6y ago
    No, I mean, non-sarcastically, what concept is it intended to communicate? Is it not possible for a market economy to have a food shortage? Just a price of food at which some people happen to starve to death? No programmer shortage, but just a price of programmers at which some business opportunities fail to be profitable?

softwaredoug 6y ago

Sure, though it takes a bit of time for the actors to become conscious they'll get the same value at a lower price.

game_the0ry 6y ago
They've had plenty of time and they were plenty conscious. And here I am getting paid well for writing code without a comp sci degree.
- softwaredoug 6y ago
  Things have changed a lot though. Covid is pushing us to a remote-heavy world and that's changing how people understand the value of labor. I can imagine, for example, good skill in peripheral areas will get paid more, poor skill in less peripheral areas will be seen as overpriced.

blocked_again 6y ago

There is definitely a shortage of good quality Engineers in SF. That's the key reason why the engineering salary is so high. Also the weird housing laws. The same engineer who is making 30k in India makes 5 or 6 times the salary when moved to the SF office. Similarly the Engineer who makes 200k+ in SF gets 4 or 5 times less when moved back to India. Comparing Mercedes to Honda is not the right comparison. There are good and bad engineers in both the US and India. So why pay 150k+ for a Honda in US when you can get the same Honda in India for 30k.

0max 6y ago
Sounds like African automobile tariffs when you put it that way
- blocked_again 6y ago
  Let me put it this way. Is the reason why a 1 bed room house price in SF is 5 times or more higher than that of a similar house in Kiev or Bangalore because it's 5x+ the quality? No. It's mainly because the supply of housing cant keep up with the demand. As you can see, the housing price started to drop as more and more companies are going remote.
gruez 6y ago
>There is definitely a shortage of good quality Engineers in SF. That's the key reason why the engineering salary is so high. Do we say there's a caviar shortage because it's expensive? Or say there's a CEO shortage because CEO compensation is high?
- blocked_again 6y ago
  Good CEOs in good companies makes much more than the average CEOs in average companies. Every company in the USA wants a good CEO. But there are only very limited number of CEOs in the USA that has a good track record of running a successful company. So companies are willing to pay more and more for the top CEOs. It's the same reason why drivers are paid very low. If there were only 100 drivers in SF who were capable of taking you from point A to point B with a reasonable amount of certainty they would be also be paid in millions. Everything is supply and demand. In case of SanFrancisco, the supply of good engineers that are available to be hired used to be limited compared to the demand. Once you remove the restriction of being able to be physically present in SF, the supply increases much more than the demand. Which results in the reduction of salaries.
  - ryandrake 6y ago
    > In case of SanFrancisco, the supply of good engineers that are available to be hired used to be limited compared to the demand. If this were the case, salaries would rise until the supply equaled demand. People have been calling this "shortage of engineers" for decades. A shortage means that demand exceeds supply at a given price (salary). If the market were free to adjust there can't be a long-term shortage. Salaries would quickly rise to the point where supply and demand were equal. If there is really a persistent shortage, why hasn't this happened? When you talk about goods, long-term shortages can happen when either the supply is artificially constrained or there are some kind of price controls in effect. Which one is causing this shortage? There is no labor cartel in software. Nothing like the AMA keeping the supply of doctors limited. Anyone can learn from online sources and become proficient, and universities graduate truckloads of developers. So there's no artificial labor constraint. There is also no externally-mandated maximum salary for developers. So how can there be a long-term shortage?

vnnkov 6y ago

You literally could buy mercedes for price which could have 2 times difference based on location.

jbay808 6y ago

So what concept is the word "shortage" supposed to communicate?

ballenf 6y ago
"The best people applying for our open positions keep rejecting our salary offers and turnover is high despite regular 2% pay rises."
- jbay808 6y ago
  No, I mean, non-sarcastically, what concept is it intended to communicate? Is it not possible for a market economy to have a food shortage? Just a price of food at which some people happen to starve to death? No programmer shortage, but just a price of programmers at which some business opportunities fail to be profitable?