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> but I think software engineers are overpaid. I'm curious why you would think this. In some ways software is a trade, but what makes it unique to nearly any o

> but I think software engineers are overpaid. I'm curious why you would think this. In some ways software is a trade, but what makes it unique to nearly any other profession is its multiplicative effect. One software engineer can write a program that improves the productivity of thousands or more people. What would you pay the person who invented the lever? Now, what you would the pay the person who invents the lever every couple weeks? If anything, many software engineers are still underpaid.

nsonha 5y ago
I'm sorry a typical software developer doesn't do anything innovative. At the current stage, the majority of the industry does works like porting things from lang X to lang Y or mapping between convoluted systems that they themselves created (for "DX"), making skins around databases, again and again. Another hughe chunk of developers works in the attention economy: ads, game, streaming, whatever, the things that I doubt have a net positive contribution to society. They give people nonsense to do and watch and take away their time, sounds like mutiplier of negative productivity if anything. There are indeed developers working on useful things to society, but they usually work on top of amazing intercom and hardware infrastructures that drive more innovation and deserve more credit than their crappy software. Speaking as a web developer.
ridaj 5y ago
I think the issue there, to continue your analogy, is that some carpenters are busy creating new levers, while others are busy repeating the same carpentry over and over again. Same trade, different aims. The "multiplicative effect" is easy to translate to economic factors: it's what allows software-based companies to have very high marginal profit. The average net profit margin of a small business in the US is less than 10%, but in scaled, software-centered businesses it's not unusual to be above 30% or 50% due to the zero marginal cost of production. But for every company like Facebook, Amazon, Oracle, Google etc which understand this and plays to it to shoot for sky-high unit margins, there are N companies like Tata Consultancy, Accenture, Capgemini (or in-house IT departments) which effectively employ software engineers to do non-reusable "glue" tasks where the margin expectation is topping out somewhere between around 10%. These folks cannot pay as much for talent, in part because their stock isn't valued nearly as much, whereas it is a relatively cheap source of compensation for tech companies. A key to understanding the difference between US and other markets is the 1:N ratio. Software engineers in the Bay Area are gifted with very low ratios, and places where the ratio is higher in my experience have much more depressed software engineering compensation because there are not enough high margin software businesses to drive them.

nsonha 5y ago

I'm sorry a typical software developer doesn't do anything innovative. At the current stage, the majority of the industry does works like porting things from lang X to lang Y or mapping between convoluted systems that they themselves created (for "DX"), making skins around databases, again and again. Another hughe chunk of developers works in the attention economy: ads, game, streaming, whatever, the things that I doubt have a net positive contribution to society. They give people nonsense to do and watch and take away their time, sounds like mutiplier of negative productivity if anything. There are indeed developers working on useful things to society, but they usually work on top of amazing intercom and hardware infrastructures that drive more innovation and deserve more credit than their crappy software. Speaking as a web developer.

ridaj 5y ago

I think the issue there, to continue your analogy, is that some carpenters are busy creating new levers, while others are busy repeating the same carpentry over and over again. Same trade, different aims. The "multiplicative effect" is easy to translate to economic factors: it's what allows software-based companies to have very high marginal profit. The average net profit margin of a small business in the US is less than 10%, but in scaled, software-centered businesses it's not unusual to be above 30% or 50% due to the zero marginal cost of production. But for every company like Facebook, Amazon, Oracle, Google etc which understand this and plays to it to shoot for sky-high unit margins, there are N companies like Tata Consultancy, Accenture, Capgemini (or in-house IT departments) which effectively employ software engineers to do non-reusable "glue" tasks where the margin expectation is topping out somewhere between around 10%. These folks cannot pay as much for talent, in part because their stock isn't valued nearly as much, whereas it is a relatively cheap source of compensation for tech companies. A key to understanding the difference between US and other markets is the 1:N ratio. Software engineers in the Bay Area are gifted with very low ratios, and places where the ratio is higher in my experience have much more depressed software engineering compensation because there are not enough high margin software businesses to drive them.