4 ms·
Have tech salaries kept up with 10-20% inflation?
I'm asking because colleagues I've spoken to have seen only marginal increases in pay during the pandemic for the same title.
During this period, inflation has probably been close to 10-20%, especially for items that consume most of our salary (housing, education, insurance...) [1]
With profits at FAAN companies expanding, why haven't salaries increased or at least stayed the same in real terms?
[1] https://www.nytimes.com/2020/09/02/business/inflation-worse-pandemic-coronavirus.html
[1] https://www.npr.org/sections/money/2021/10/26/1048892388/meet-skimpflation-a-reason-inflation-is-worse-than-the-government-says-it-is
[1] https://www.npr.org/sections/money/2021/07/06/1012409112/beware-of-shrinkflation-inflations-devious-cousin
- nostrademons 5y agoCounting stock, easily. Most FAANG stocks are up 2x or more over the last 2 years; someone who got paid 50% in stock has seen their total comp increase by 50%. I don't think salaries are up very much, but the implication of 10-20% inflation is that you want to hold and receive as little cash as possible, so if you're getting paid on salary you're already losing.
- flerovium 5y agoI don't think this is true: you can immediately convert your salary to non-cash. My understanding is that stock comp is usually thought of in dollar terms, so if a FAANG companies doubles its stock, that doesn't mean the compensation package increases for new employees by 2x.
- nostrademons 5y agoNot for new employees, but for existing employees. If you negotiated $200K in salary and $300K in stock and your company stock was $300/share when you joined, then upon the first board meeting after hire, you'd be granted 1000 shares/year (subject to vesting). If the stock then goes up to $1000/share, that compensation is worth $1M/year at the time it vests. You've basically gotten a raise because the stock price went up. I've heard some tech companies have very recently (2021) changed this so that you get a certain dollar amount each month and it converts to shares based on the price that month, probably to avoid unpredictable stock compensation expenses as the stock goes up. Anyone who got their grant before this enjoys the full benefit of stock price appreciation until their existing grant runs out. This is generally the point of giving stock compensation - it's supposed to incentivize workers to care about how well the company stock does, which in rough terms is a proxy for how well the business does.
- muzani 5y agoI'd say tech salaries have been waaaay ahead of inflation in the last 10 years. When I was a junior, even a third of my current salary would be life-changing. Now the life changing bar is probably around half my current salary. Except back then you could only make the current salary as a manager, now it's just a mid range IC. Some other fields like accounting jobs hasn't caught up, so we're in a really good spot. Corona and remote working also torpedoed real estate prices, so now the primary cost of living (homes) have become much more affordable. So inflation is not the only thing to look at.
- flerovium 5y agoWhat about during the last couple years of the pandemic?
- muzani 5y agoThere was a surge in salaries in my area (Malaysia), but I don't think it applies globally. Part of the reason was that the tech shortage + forced remote work meant employees from Australia etc were looking into other countries.