5 ms·

Why do people keep pretending like Silicon Valley engineers aren’t one of the single highest paid demographics in the entire country?

glitchc 6y ago
Initially this was true, certainly SV would use higher salaries to draw developers and engineers to the valley. But cost of living has exploded since then. A modern developer living in SV does not command a higher standard of living as food and housing costs are significantly higher than most of the rest of the country. A similar trend plays out on the east coast so it’s not just SV. It’s balanced by the CoL adjustment. In short, SV engineers are not better off, and haven’t been for the past decade. This is apparent by the observed exodus in the light of Covid forcing a shift to primarily remote work. Engineers are trying to reclaim their wage advantage by moving to cheaper locations, and companies are fighting back by reducing compensation accordingly.
- markalexander 6y ago
  Sort of. Often a big chunk of your CoL is going into a massively appreciating asset. People always seem to ignore this when talking about the top n most expensive cities in the world. You can literally sell your apartment and go live in a mansion most other places on the planet when you feel like it.
  - codesnik 6y ago
    hm. do many people in silicon valley buy their apartment or house there these days? Is it even accessible?
    - markalexander 6y ago
      People in general or people in tech? Well what’s the typical mortgage multiple, 6 or 7 times salary? So for the latter, it seems pretty attainable to get an apartment at the lower end of the market to start out on. Correct me if I’m wrong, though.
    - sidibe 6y ago
      Well if you're just renting the CoL difference is nowhere near the salary difference you'd get in other locations/careers.
mlthoughts2018 6y ago
Pay is nowhere remotely close to being proportional to impact on revenue though. Many engineers are much more offended by unmeritocratic pay than by absolute value of pay being low - hence why you can convince amazing engineers to work for peanuts at start-ups. I want the greatest share of the returns of my own labor I can get. If that results in very high salary, great, it’s earned. If I take a risk at a place where that translates to much lower salary, that’s fine too - as long as it’s very objectively meritocratic. If I am making $200k per year as a top, top performer, while my employer is paying far more mediocre performers $175k (perhaps based of geolocation), or where both of us are bringing in ~ millions of revenue, that’s super unacceptable. As time goes on, the surplus of my labor productivity that a big corporate employer can capture beyond my total compensation should be decreasing heavily - and expert software labor is one class that has the negotiation power to actually push that issue. So I’d flip your question on its head. Why do we pretend that rent-seeking executives deserve the surplus revenue generated by rare talented engineers? Why (with complete sincerity) aren’t many, many, many more software engineers paid on the order of what Hollywood actors are making, while executive salaries simply have to come way, way down in these lines of business?
- courtf 6y ago
  Exactly. The funny thing is the same people making the counter to your argument no doubt don't bat an eye at 8 figure annual salaries for the best sports players. The argument is the same in either case.
- dilyevsky 6y ago
  Depending on your budget the min SAG rate can be anywhere from ~100-1000/day so many sw engineers in fact make much more than most actors
  - mlthoughts2018 6y ago
    I’m exclusively drawing the comparison with high demand actors / athletes. Perhaps athletes has the better clarity - many NBA players are paid more than their head coach, and even those paid less are still paid much more competitively to their revenue contribution than engineers by comparison.
walshemj 6y ago
Compared to other professions? maybe SV is just treating "Engineers" more like other older professions and has less of the class distinctions you see in the UK for example.

glitchc 6y ago

Initially this was true, certainly SV would use higher salaries to draw developers and engineers to the valley. But cost of living has exploded since then. A modern developer living in SV does not command a higher standard of living as food and housing costs are significantly higher than most of the rest of the country. A similar trend plays out on the east coast so it’s not just SV. It’s balanced by the CoL adjustment. In short, SV engineers are not better off, and haven’t been for the past decade. This is apparent by the observed exodus in the light of Covid forcing a shift to primarily remote work. Engineers are trying to reclaim their wage advantage by moving to cheaper locations, and companies are fighting back by reducing compensation accordingly.

markalexander 6y ago
Sort of. Often a big chunk of your CoL is going into a massively appreciating asset. People always seem to ignore this when talking about the top n most expensive cities in the world. You can literally sell your apartment and go live in a mansion most other places on the planet when you feel like it.
- codesnik 6y ago
  hm. do many people in silicon valley buy their apartment or house there these days? Is it even accessible?
  - markalexander 6y ago
    People in general or people in tech? Well what’s the typical mortgage multiple, 6 or 7 times salary? So for the latter, it seems pretty attainable to get an apartment at the lower end of the market to start out on. Correct me if I’m wrong, though.
  - sidibe 6y ago
    Well if you're just renting the CoL difference is nowhere near the salary difference you'd get in other locations/careers.

mlthoughts2018 6y ago

Pay is nowhere remotely close to being proportional to impact on revenue though. Many engineers are much more offended by unmeritocratic pay than by absolute value of pay being low - hence why you can convince amazing engineers to work for peanuts at start-ups. I want the greatest share of the returns of my own labor I can get. If that results in very high salary, great, it’s earned. If I take a risk at a place where that translates to much lower salary, that’s fine too - as long as it’s very objectively meritocratic. If I am making $200k per year as a top, top performer, while my employer is paying far more mediocre performers $175k (perhaps based of geolocation), or where both of us are bringing in ~ millions of revenue, that’s super unacceptable. As time goes on, the surplus of my labor productivity that a big corporate employer can capture beyond my total compensation should be decreasing heavily - and expert software labor is one class that has the negotiation power to actually push that issue. So I’d flip your question on its head. Why do we pretend that rent-seeking executives deserve the surplus revenue generated by rare talented engineers? Why (with complete sincerity) aren’t many, many, many more software engineers paid on the order of what Hollywood actors are making, while executive salaries simply have to come way, way down in these lines of business?

courtf 6y ago
Exactly. The funny thing is the same people making the counter to your argument no doubt don't bat an eye at 8 figure annual salaries for the best sports players. The argument is the same in either case.
dilyevsky 6y ago
Depending on your budget the min SAG rate can be anywhere from ~100-1000/day so many sw engineers in fact make much more than most actors
- mlthoughts2018 6y ago
  I’m exclusively drawing the comparison with high demand actors / athletes. Perhaps athletes has the better clarity - many NBA players are paid more than their head coach, and even those paid less are still paid much more competitively to their revenue contribution than engineers by comparison.

walshemj 6y ago

Compared to other professions? maybe SV is just treating "Engineers" more like other older professions and has less of the class distinctions you see in the UK for example.