4 ms·

This is completely unrealistic. Nowhere in the world outside SF/NYC is there so much VC money that can support paying developers those salaries. I would say o

by rapsey 6y ago

This is completely unrealistic. Nowhere in the world outside SF/NYC is there so much VC money that can support paying developers those salaries. I would say over 90% of tech companies make their money from local markets. You can pay your developers as much as you make from your local market. As for hiring. You have no idea how well someone is going to work out. Some people are really good at interviews but turn out to be terrible employees and vice versa. This is why the hiring process in tech tends to be pretty convoluted and broken in general. No one can figure this out. The laws regarding hiring are also much less liberal outside of CA. Hiring and firing is severely restricted in many places. Very few companies are in the position of being "unwilling" to pay developers more. Some with plenty of cash are even simply limited by the tax laws how much they can pay. The cost of paying someone too much over local market rate incurs obscene tax costs.

marvin 6y ago
The "able to pay" part will resolve itself if you manage to start a sufficiently successful startup. Eventually through high enough profits, since the startups that turn into global leaders in their field are more profitable per employee than anything a local non-tech company can compete with. Getting to that point is a bit of a chicken-and-egg problem, though. And firing policies is a political barrier that's hard to avoid. I suppose you could keep everyone on as contractors, paying them standard rates but going to them directly, not through an agency. That would land the salaries in the region suggested, and you'd still have the ability to fire without cause.
- rapsey 6y ago
  Lack of VC money makes starting a sufficiently successful startup a bit difficult. There is a reason there is only one silicon valley.
  - ricardobayes 6y ago
    There are more silicon valleys, like Tel-Aviv or Shenzen, but arguably the Bay Area is the only one merit-based. Good luck getting funded at the other two as a foreigner.
realityking 6y ago
> The cost of paying someone too much over local market rate incurs obscene tax costs. This is fascinating to me, do you have any examples of jurisdictions where this is the case? Here in Germany the “taxes” (they’re technically mandatory insurances) than an employer will have to pay on top of the gross salary all have a salary cap, the largest one being around €85k. After that any increase in gross pay has no additional cost. Of course my personal tax rate might take a hike but that’s not the concern of my employer.
- rapsey 6y ago
  For slovenia taxes are progressive, above 10k a month is the highest bracket and taxes are 61%. If you want your employee to make 10k a month, your company pays 24k. If you want your employee to make 5k a month, the company pays almost 12k.
  - realityking 6y ago
    I think that’s a foolish comparison. When talking about these super high SF salaries, folks are talking about _gross_ salaries. Nobody will reject a higher salary because they’ll have to pay more taxes. A lot of the conversation is about the value of the developers work being high enough to warrant higher salaries. With that argument we should look at gross salaries + taxes/fees paid by the employer on top of the gross salary. Your personal tax rate is between you and the state.
    - rapsey 6y ago
      I was not talking about a personal tax rate. My point was that employers can not pay anywhere near SF salaries because some places tax high salaries so severely. It is not a matter of employers being unwilling. A rich company can't just decide to pay people at SF levels and expect to create a local silicon valley.
      - bernawil 6y ago
        If a company knows that it'd actually cost 300k to hire the local kind of engineer that could make 150k in the Bay Area, that company is either going to move to the Bay Area or hire Bay Area-like engineers as remote contractors to get their 150k worth of engineer for 150k.

by rapsey 6y ago

marvin 6y ago

The "able to pay" part will resolve itself if you manage to start a sufficiently successful startup. Eventually through high enough profits, since the startups that turn into global leaders in their field are more profitable per employee than anything a local non-tech company can compete with. Getting to that point is a bit of a chicken-and-egg problem, though. And firing policies is a political barrier that's hard to avoid. I suppose you could keep everyone on as contractors, paying them standard rates but going to them directly, not through an agency. That would land the salaries in the region suggested, and you'd still have the ability to fire without cause.

rapsey 6y ago
Lack of VC money makes starting a sufficiently successful startup a bit difficult. There is a reason there is only one silicon valley.
- ricardobayes 6y ago
  There are more silicon valleys, like Tel-Aviv or Shenzen, but arguably the Bay Area is the only one merit-based. Good luck getting funded at the other two as a foreigner.

realityking 6y ago

> The cost of paying someone too much over local market rate incurs obscene tax costs. This is fascinating to me, do you have any examples of jurisdictions where this is the case? Here in Germany the “taxes” (they’re technically mandatory insurances) than an employer will have to pay on top of the gross salary all have a salary cap, the largest one being around €85k. After that any increase in gross pay has no additional cost. Of course my personal tax rate might take a hike but that’s not the concern of my employer.

rapsey 6y ago
For slovenia taxes are progressive, above 10k a month is the highest bracket and taxes are 61%. If you want your employee to make 10k a month, your company pays 24k. If you want your employee to make 5k a month, the company pays almost 12k.
- realityking 6y ago
  I think that’s a foolish comparison. When talking about these super high SF salaries, folks are talking about _gross_ salaries. Nobody will reject a higher salary because they’ll have to pay more taxes. A lot of the conversation is about the value of the developers work being high enough to warrant higher salaries. With that argument we should look at gross salaries + taxes/fees paid by the employer on top of the gross salary. Your personal tax rate is between you and the state.
  - rapsey 6y ago
    I was not talking about a personal tax rate. My point was that employers can not pay anywhere near SF salaries because some places tax high salaries so severely. It is not a matter of employers being unwilling. A rich company can't just decide to pay people at SF levels and expect to create a local silicon valley.
    - bernawil 6y ago
      If a company knows that it'd actually cost 300k to hire the local kind of engineer that could make 150k in the Bay Area, that company is either going to move to the Bay Area or hire Bay Area-like engineers as remote contractors to get their 150k worth of engineer for 150k.