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I think we can safely ignore entry-level roles here - for a while in the early 00s everyone with an MBA thought that entry level engineers were just like other

by munk-a 5y ago

I think we can safely ignore entry-level roles here - for a while in the early 00s everyone with an MBA thought that entry level engineers were just like other engineers but at 20% of the cost - what savings! Then the industry realized that both junior employees and off-shoring come with real costs that need to be analyzed in advance - they can be the right answer, but you need to tread very carefully. So I'd take a look at senior employees which tend to be a pretty curmudgeonly bunch that have been through wage freezes and non-monetary compensation circuses before and will jump ship if they get a wiff of it happening again. Companies won't feel any loss of revenue for a few years after work weeks are slashed - it takes a while for consumer spending to adjust to lower income - instead we'd likely eat a fair bit of inflation (which has been unhealthily stagnate for a while now) and everything would move on from there. If the companies are responding to a natural decrease in effective revenue it'll be staggered and upstream companies will be shielded from it for longer - so you'll likely see a value shift from customer facing companies to B2B companies aaaaand - any wage slashing that goes on will just reinforce that value shift as valuable employees jump ship. All these ripples that go through the economy do so slowly - and no MBA worth their salt is going to say (on the monday after switching to a reduced workweek) "Welp all our employees know this will eventually impact us so lets just slash their wages now". No, they'll wait and see if their business is able to ride out the shifting terrain without decreasing wages since that's a more stable approach and puts the company at less danger - and if that company happens to need to adjust employee costs it won't be evident until multi-year contracts are re-negotiated to lower rates and customers refuse to renew since their pocketbooks are empty. Economics moves sloooow - maybe it'd be better to imagine the invisible snail of the market!

tshaddox 5y ago
> I think we can safely ignore entry-level roles here You mean, as long as we're personally beyond entry-level? My own career and compensation isn't my only concern.
- munk-a 5y ago
  No - because I think their wages are far too volatile to easily track. When I entered into software development (like fifteen years ago - not in the 70's) I initially made 45k - while first years in SV were pulling in 120k-140k. I wanted to look at more senior positions first because I think they're more stable over time and the employees there will advocate stronger against paycuts... And if the senior employees are stubborn in their advocacy then junior employees tend to benefit from it - if senior employees consent to letting their wages slip then everyone below them in experience is expected to just go along with it.
  - tshaddox 5y ago
    My point wasn't that only entry-level positions would be affected over time, but rather that the compensation of all roles could be affected simply by starting new people out with lower compensation and increasing compensation more slowly throughout each worker's career. In other words, the average pay of a senior engineer could be lower in 20 years than it is now without any individual's pay ever decreasing.
    - munk-a 5y ago
      I think that entry-level positions (outside of SF) are usually driven mostly by whatever the local cost of living is plus a bit to keep the positions clearly above what retail positions can offer - CoL would similarly take a while to adjust to the new lower income of folks so I wouldn't expect it to respond particularly quickly. But yea, I agree that that's one way to pull down the wages. I do think they'd end up suffering from the same sort of pressure though - if you pull on an entry level person at a low rate then there will be a lot of tempting competing offers they'll be considering when they've got a year or two under their belt - and then they'll be in the same pool as the other junior devs (or maybe the intermediate ones). I hasn't really thought about the zero experience folk though - thanks for mentioning it!

by munk-a 5y ago

tshaddox 5y ago

> I think we can safely ignore entry-level roles here You mean, as long as we're personally beyond entry-level? My own career and compensation isn't my only concern.

munk-a 5y ago
No - because I think their wages are far too volatile to easily track. When I entered into software development (like fifteen years ago - not in the 70's) I initially made 45k - while first years in SV were pulling in 120k-140k. I wanted to look at more senior positions first because I think they're more stable over time and the employees there will advocate stronger against paycuts... And if the senior employees are stubborn in their advocacy then junior employees tend to benefit from it - if senior employees consent to letting their wages slip then everyone below them in experience is expected to just go along with it.
- tshaddox 5y ago
  My point wasn't that only entry-level positions would be affected over time, but rather that the compensation of all roles could be affected simply by starting new people out with lower compensation and increasing compensation more slowly throughout each worker's career. In other words, the average pay of a senior engineer could be lower in 20 years than it is now without any individual's pay ever decreasing.
  - munk-a 5y ago
    I think that entry-level positions (outside of SF) are usually driven mostly by whatever the local cost of living is plus a bit to keep the positions clearly above what retail positions can offer - CoL would similarly take a while to adjust to the new lower income of folks so I wouldn't expect it to respond particularly quickly. But yea, I agree that that's one way to pull down the wages. I do think they'd end up suffering from the same sort of pressure though - if you pull on an entry level person at a low rate then there will be a lot of tempting competing offers they'll be considering when they've got a year or two under their belt - and then they'll be in the same pool as the other junior devs (or maybe the intermediate ones). I hasn't really thought about the zero experience folk though - thanks for mentioning it!