9 ms·

Is 400k/yr overpaid for a SWE?

• mytailorisrich 4y ago
  What does 'overpaid' mean? Businesses don't pay more than they have to. If a company offers 400k for a job it means they think the person is worth it. If not, the person will likely be fired at some point... That's all there is to it in a free market, really. Edit: The conclusion is that either: 1. They know what they are doing, which means you will generate more value than they pay you whatever they offer (as mentioned I PaulHoule's reply below). 2. They don't. If you think the pay is massively inflated then enjoy it whilst it lasts, because it won't.
  • PaulHoule 4y ago
    I had a friend who was trying to explain Marxism to me (e.g. capitalists rip you off by paying less value than you make) and I told him that (1) I knew Marxism pretty well and (2) I had just worked at a place that was not able to use me effectively thus I was not earning my keep. I told him that I very much wanted to be "underpaid" in the Marxist sense because I'd have a chance of keeping my job and having a sane work situation.
    • xmonkee 4y ago
• jstx1 4y ago
  The author isn't saying that $400k is overpaid, they're saying that not every company can afford to pay $400k. Which sounds very reasonable to me. If your company can afford to pay $400k and the market is competitive - great, hope they pay you even more in the future. From a personal point of view, you're never overpaid - the more, the better. But what makes sense for the company is a different question, and only some companies will be able to afford those salaries.
• EddieDante 4y ago
  I wouldn't begrudge a SWE who makes $400K, especially if they live in California with their outrageous cost of living. Most workers in the US are woefully underpaid. Wage growth has been mostly stagnant since 1975 while productivity and profits trend ever upward. https://www.epi.org/publication/charting-wage-stagnation/ https://www.epi.org/publication/charting-wage-stagnation/
  • theandrewbailey 4y ago
    400K total compensation doesn't sound out of line for a particularly niche senior dev/software architect in California.
    • filoleg 4y ago
      Or just a random senior dev at a FAANG. Can't speak for all of them, but that's definitely not uncommon at Meta/Google. And you are certainly gonna shoot above that number at L6.
      • saagarjha 4y ago
        If you’re at Google you should be approaching that number at L5, really.
        • filoleg 4y ago
          Yep, agreed, that's definitely very doable at L5. I just decided to be a bit conservative with my estimate by looking at levels.fyi first, because I expected someone in replies to bring it up as a counterargument.
  • adventured 4y ago
    That document, as with every other claim about stagnant wages in the US since the 1970s, entirely (probably intentionally) fails to account for the massive demographic shift that has occurred since 1975. The US middle class is not the same, 1975 vs 2022. Show me the demographics of 1975 for the US middle class and lower middle class. Then show me the same demo for 2022. Next show me the wealth and income figures for each demographic, 1975 vs 2022. Hint: the US middle class is no longer entirely white; and the white people that used to dominate the US middle class have moved up. Meanwhile first and second generation Hispanic Americans have moved into the US middle class, coming from largely impoverished backgrounds and third world countries. Does that document account for any of that? Of course not. You can trivially see this in the Fed's demographic data for wealth and income (white household income and wealth figures are well above the median figure for example; which was not true in 1975, back then they were close to one and the same), and by comparing present demographics vs past demographics. Hispanics were 4-5% of the population in 1975. If the white demographic moves up, and formerly poor Hispanics move into and take over the US middle class (which is exactly what's occurring), the document you linked to pretends nothing changed, there was no improvement. There was in fact vast improvement for the actual people in question.
• throwawayacc2 4y ago
  There is no such thing as overpaid, by definition. You are paid as much as you are paid. The only time you are “overpaid” is when the payments department makes and error and wires more money to your account than your contract entails you too. Baring that corner case you are paid whatever amount you negotiated. If the employer feels like they’re not getting a good deal, they’re welcome to seek recourse within in confines of the law.
  • projektfu 4y ago
    You're overpaid as well when you are asked to take a pay-cut, quit instead, and cannot find employment again at the previous rate.
• flappyeagle 4y ago
  No. Ryan is not saying anyone is overpaid. He's saying that many business models are impossible. The market is saying that those business models shouldn't exist. This is true no matter what the number is. Slave labor enabled the American South to deploy business models that are impossible today. Doesn't mean it was good.
  • fartsucker69 4y ago
    He would be wrong with those claims, too. Even those """"overpaid"""" developers make only a small part of whatever the overall company makes. Perhaps this is counterintuitive but I would not be surprised at all if that percentage is smaller than with regular companies and lower paid workers. It's simply that tech was and still is an exploding sector and a ton of resources are poured into it. People who are experienced programmers now are just lucky enough to ride the wave. It won't last forever. But it's certainly real for now.
    • xenadu02 4y ago
      > He would be wrong with those claims, too. No he isn't. His point is that some potential business models need $X amount of software engineering work to have a viable product, has a potential customer base of $Y, and the market will bear a price of $P for the software. Gross income is $Y * $P. All else being equal as SWEs get more expensive the amount of $X you can get drops. If that puts you below the threshold for a viable product and your business doesn't have the power to raise $P then you don't have a viable business. This is obviously a simplistic example but the principle still holds.
    • devonbleak 4y ago
      Wrong that some business models are impossible/shouldn't exist with cost of talent at X? Then you're arguing that every business model is possible/valid/should exist regardless of cost of talent? I'm not sure where you're trying to go with that.
      • deleted 4y ago
        [deleted]
• fartsucker69 4y ago
  I find his response about $400k paid people and marx a bit odd. More money going to the people actually doing the work vs. the top would certainly be right up Marx ally. I assume that guy is among those who views everyone earning above average at any time as part of the problem.
  • closeparen 4y ago
    It's funny. Although the modern inequality discourse takes some spiritual influence from Marx's concern about capital's profits, its actual focus seems to be much more on wage disparities between different kinds of workers. And yes, some workers earning significantly above average are literally, mechanically, the problem of income inequality. Return on capital is mostly not income; taxing unrealized gains is a fringe idea. In the current moment, worker vs. worker inequality (including worker vs. manager) is much more salient than worker vs. owner. Even if you think of yourself as aligned with Marx.
• IceMetalPunk 4y ago
  Depends entirely on the specifics of the job and the location of dev. Salaries are often determined partially by the cost of living for the employee, which varies from one place to another. I know, for instance, that people on my team at work make more than me for the same job simply because they live in NYC, which has a higher cost of living than I do here in suburban south Florida. My personal philosophy about money is often ridiculed, but the way I see it, if you have enough money to live happily and healthily (and support your family, if you have one), then you're being paid enough, and anything above that is just a bonus cherry on top. I know my salary is lower than some devs would ever accept, but I'm a single guy, so it's more than enough for me to pay my bills, have a house and food, and even some luxuries, and still save for emergencies and the future. Everything on top of that I donate to charity because others need that money far more than I do. But as I said, it's a personal thing, and many people would call me crazy for it, so... it's up to you to decide what you think a fair payment is and then find an employer who's willing to negotiate a comparable salary with you.
  • noname120 4y ago
    Have you heard about the Earn To Give movement? Plenty of people live under their means and dedicate their extra money to effective causes.
    • IceMetalPunk 4y ago
      I hadn't heard of it, but skimming some quick reading about it, yeah, I definitely agree with it. It also led me to the term "effective altruism", which is something I've been advocating for pretty much my whole life, never knowing there was a phrase defined by it. So that's neat. I'm curious to know how what proportion of people around the world follow these principles; I can't find any definitive or combined data on it, and I'm cynical enough to think it's not very high, just from my own experiences with other people in our hypercapitalistic, hyperindividualistic US society. Funny enough, the Wikipedia article about Earn To Give mentions something that reminds me of my father. It says that David Brooks and John Humphrys have criticized the movement by claiming that once people start earning wealth, they will inevitably become less altruistic over time. My father always used to say, "When you're young, you're a liberal, because you have a heart; but when you're older, you're a conservative, because you have a brain". (That is, of course, not something he made up, but a parroted quote that's been said for many years.) And it always struck me as not only odd, but cruel, to draw a dichotomy between empathy and rationality, as though it's literally stupid to care about other people. Anyway, thank you for letting me know about something new! :)
• newaccount2021 4y ago
  consider three things: 1. market consolidation. A lot of cashflow-negative tech companies are going away. 2. automation. This is still out there, but eventually industry will find a way out of the software swamp. 3. competition. At some point, the US and China are going to square off. Instead of WW3, an agreement will be hammered out that likely results in Chinese tech companies getting back their access to US markets. And, the world is very busy graduation devs. add these up and its buh-bye to the golden age of dev comp, its more amazing that it has lasted so long devs in the future will make less than tree trimmers
• xenadu02 4y ago
  I don't think his tweet is saying SWEs don't deserve 400k. He's saying some business models are not viable at that price. So in relation to his tweet that's not wrong. If your medical business needs to hire doctors for 20k/yr to be viable then you don't have a business. At the end of the day that's no different than a child saying they're going to start a money tree business so they can just pick money off the trees and be rich. If you can drive the cost of doing business and your inputs toward zero almost any business idea could theoretically make a profit... but real markets are not so accommodating. In relation to your question: no, 400k/yr is not overpaid. Software is an extremely scalable business where the marginal cost of every copy beyond the first is nearly zero. Lots of companies selling software (or relying on custom software as their competitive advantage) make far in excess of 400k off each engineer's labor. Plenty make millions per engineer, even after subtracting all other costs and non-engineer compensation. Companies don't pay 400k, 800k, or more to engineers out of charity. They do it because it is profitable.
  • ellen364 4y ago
    > Software is an extremely scalable business where the marginal cost of every copy beyond the first is nearly zero. and > If you can drive the cost of doing business and your inputs toward zero almost any business idea could theoretically make a profit... but real markets are not so accommodating. I agree with many of your points, but these vary by product. For example, FAANGs sometimes have applications where some inputs don’t scale well, e.g. the local knowledge that goes into mapping apps. But the company often provides the service for free and benefits from volunteers (free labour) adding valuable information like “this road is closed”. That product feeds into the ads part of the business, which does scale really well. I’ve also noticed that FAANGs sometimes outsource work that doesn’t scale as easily. The contracting companies are either in cheaper countries or they’ll accept a smaller profit margin. Or both. The devs and analysts at those companies indirectly contribute to the FAANG’s product, but don’t get the bumper salaries. Put another way, I think big tech companies do often try to “drive their inputs toward zero” (to paraphrase a little) but US-based devs don’t often experience it.
    • 908B64B197 4y ago
• humanwhosits 4y ago
  People need to afford a house. If they can't do that they'll go do something else, pushing the price back up
  • iso1631 4y ago
    Or rather people get higher wages, meaning they can afford a more expensive house, pushing up the prices of houses (as there's a fixed number {in a given location})
  • newaccount2021 4y ago
• deleted 4y ago
  [deleted]
• devonbleak 4y ago
  At some point we'll find a new equilibrium. Everybody is currently so desperate for this talent, there's been a big shift toward remote work meaning competition that used to be highly localized is now everywhere, and giant companies are on hiring tears so it's driving up the market rate for the talent and companies that can't afford that are having a huge problem hiring. We're already seeing the knock on effects of this as contracts with IT vendors come up for renewal and we're being charged XX% more this year for no marginal benefit from what we had last year. At some point the customers of those companies can no longer afford their products at the rates they have to charge to pay engineers that much and hiring freezes, layoffs and pay cuts will start happening. Until then everybody's trying to suck as much money out of the system as they can - that's just capitalism.
• adultSwim 4y ago
  The first job I had out of school billed me out for $325/hr. That's a high rate for a high level lawyer. Unlike lawyers, they were able to bill me out for almost every hour I was at work, which comes out to about $650k/yr. I made a small fraction of that. Were we better organized, we engineers would take a much greater portion of the profits we generate. After unionizing, professional athletes are paid about half of what they directly generate. Before unionizing they got peanuts.
  • projektfu 4y ago
    And if the industry were better organized overall, the other workers in it would be taking home more, too. Support, customer service, technical writing, etc. It seems that programmers are pretty hostile to organizing as a group. Many here even defended the anti-poaching agreements that FAANG got in trouble for. A lot of our innovation these days is coming up with new ways of extracting rent. The programmers don't directly do that but they make it possible at scale. Google, VISA, Yelp, etc.
• RcouF1uZ4gsC 4y ago
  CEO thinks workers performing essential function are overpaid, and worry that their business can't work as well if they have to pay so much. News at 11.
  • fayalargeau 4y ago
    crazy that some people have no clue they contribute 0 value in what they say, am i right?
• cmrdporcupine 4y ago
  Consider: Upward pressure on our salaries is in large part driven by the compensation packages given at Google and Facebook, etc. Those compensation packages can be that high because they've tapped into (and in large part monopolized) absolute firehoses of revenue in the form of online advertising. Those companies do "other" things than advertising, but advertising makes up the vast majority of their revenue. Without it, they could not compensate so highly. The problem comes from the fact that these companies eagerly hoover up all the engineers they can get. And rarely to actually work on the core advertising and ad-tech portions of their business, but literally almost anything. There's very little that Google doesn't do. And they're always starting to do new things. So upward pressure is applied on compensation across the whole job market. And Google at least seems to always be hiring. Also, Google will happily pay $400k for a SWE if it means that SWE is not creating new revenue sources for potential / future competitors. The cost to them is minimal compared to the revenue they make. I leave it as an exercise for the reader what this does to the health of the industry as a whole.
  • betaby 4y ago
    Unlikely it´s FAANG related. Upward pressure is indeed supply/demand right now, even in countries where FAANG has no offices at all.
    • cmrdporcupine 4y ago
      Doesn't matter, it affects the whole supply-demand curve. But also people can and do relocate to take FAANG jobs.
• adultSwim 4y ago
  When big tech companies were caught illegally colluding to suppress wages, it taught me a lot about the value of my work.
• tgsovlerkhgsel 4y ago
  Your cost to provide the service (i.e. your minimal cost to exist) is probably somewhere around $30k. The value you deliver depends strongly on the company but can easily be orders of magnitude above $400k. Everything in between is a matter of negotiation, supply and demand. If there are enough companies that can make their business model work at $400k to hire all the capable engineers at $400k, then the business models that can only pay less won't work, just like many other unprofitable business ideas don't. That is not a sign of a problem. Quite the opposite, actually. If that is the limiting factor, it means that the demand is very elastic, i.e. if there is an increase in supply, prices (salaries) will not drop too much.
• jelliclesfarm 4y ago
  What does the tweet say? I am blocked by @typesfast. Can’t find the tweet on the browser page before the login prompt appears.
  • fayalargeau 4y ago
    "It might be that many software business models don't work when engineers cost $400k/year." followed by "TIL some software engineers making $400k view themselves as Marx's proletariat." I'm getting the feeling that most devs here agree that SWEs don't need to make that much.
    • jelliclesfarm 4y ago
      thanks. it is certainly a layered tweet.
• radarsat1 4y ago
  I'm frankly super confused about salaries right now. Currently job hunting in Europe and the other day when a recruiter asked how much I was looking for I gave my current salary as a minimum of 65 euros/h and the recruiter kind of chuckled and told me that if I'm a good match I could ask for like 90. Okay, sounds great. So a few days later I was having an initial interview for a senior ML position and when asked how much I expect (recall this is Europe so let's generously divide the US salary by 4) I said 100k. From my point of view I'm still low balling it because I wanted the job, but apparently this was far too much because the interviewer was incredulous and basically ended the interview on the spot. Told me that was more than they pay any of their senior positions. Doing the rough math, 60 euros/h, 8 hrs per day at 48 weeks > 100k. So yeah. I just don't know what to say any more when this question comes up. It seems to be random to me what is going to be an acceptable answer. Usually I want to continue the conversation and discuss it, but instead it just seems to cut things off immediately. I find it really frustrating that they make you guess what they are thinking and then either laugh or act like you're some kind of high roller. I mean, I need a job, so like, if you're going to choose me based on my ability to pick a random number you are thinking in your head, how about we do that at the beginning of the interview instead of talking for an hour first and giving me the impression that things are going well? In any case, just ranting. What's a good rate for a senior SWE or ML engineer in Europe these days? What can I get away with asking for without getting this reaction? Also, what's up with people asking this question in the first conversation? I feel like in the past you would go through a couple of rounds and then get to discussing what they could offer you but now it seems to be the other way around, and they are not willing to counteroffer if you guess wrong. Maybe just my perception, but I find it weird and difficult. I'm always fine and more or less comfortable in interviews until this question comes up.
  • LegitShady 4y ago
    > So a few days later I was having an initial interview for a senior ML position and when asked how much I expect Sometimes companies are looking to hire super cheap only and you gave your expectations as higher than they budgeted, so no point interviewing you, but also from your perspective, probably no point in being underpaid. I'm sure we've all seen job ads where they talk about the mountains of experience and skills you need and then list near poverty wages as restitution, if they list salary range at all.
• dakial1 4y ago
  Nobody is overpaid. Salaries, live everything else, follow a trend of Supply and Demand. Currently SWEs are on high demand pretty much everywhere in the world and salaries reflect that. What should we do? Educate/Train more SWEs!
  • passivate 4y ago
    Except CEOs, apparently they're always overpaid. ;)
    • namaria 4y ago
      If a existing and expanding systems doesn't seem to make sense, your understanding is more likely to be wrong then reality.
• prh8 4y ago
  At first it seems like he's making a logical point. After reading HIS replies in threads, seems he's more interested in being obnoxious
• sorenjan 4y ago
  I think it's pretty funny when libertarians or conservatives all of a sudden start sounding like Marxists and claiming that of course workers (engineers) should be entitled to part of the value they produce, when it's their own salary they're talking about. $400k is also way way more than any engineer will earn in most countries except USA, and maybe it's exceptional in most US states too? For context, it's about twice what the Swedish prime minister makes, and $70k per year is considered a high salary for senior developers in Stockholm. https://www.unionen.se/rad-och-stod/om-lon/marknadsloner/systemutvecklare?active-tab=0 https://www.unionen.se/rad-och-stod/om-lon/marknadsloner/sys...
  • cableshaft 4y ago
    I live in the US and I'm not making anywhere near $400k. What I'm making is above average for my region, also. I haven't gotten a recruiter from this area (that shared their range) get anywhere close with the top end of their range when they've pinged me since I've gotten this job.
• MangoCoffee 4y ago
  all the tweets reply to Ryan is hilarious. i don't believe Ryan is saying SWE shouldn't get 400k. some business model just can't afford it and i agree. i work for a "traditional" mid size company. a small/mid size company will have a hard time offering 400k for a SWE
• poulsbohemian 4y ago
  Once upon a time when I was a young pup, I was the sole engineer dedicated to a product with top line revenues of $60MM+/year. There were probably a dozen other engineers working on supporting and critical infrastructure that was used for that product. I made $75,000 / year, in a major US tech hub. So my point is - get it man. Enjoy the remote work and the big salaries and RSUs and all of it, because the generations that came before you worked darn hard to push so that you'd get all of this.
• swatcoder 4y ago
  No, in the pure market sense that enough businesses have decided to target the same pool of workers and can afford to pay them that much. Yes, in the sense that most businesses can't justify that cost and that lots of SWE's make more than enough for their desired lifestyles at much lower TC. But it's nothing new. 20-30 years ago, there was a comparable spread between SWE's who took jobs in finance companies vs the rest of us. A new top-school grad could get a job at Goldman Sachs out of college for 2-4x what someone working in most other software fields would earn because technical innovation in that space was intensely competitive and they desperately needed more hands on deck. Eventually, that divide largely evened out and the ostensibly "overpaid" sector moved to new technical frontiers.
• unicornporn 4y ago
  The prime minister in my country (SWE, also known as Sweden) makes 170k/yr per year. So what do you think? :-D
  • betaby 4y ago
    That´s a very easy job in my books. Also PM most likely has free housing, cars,maids and so on.
    • boeingUH60 4y ago
      And free travel, free security, aides to delegate many tasks to, etc. I abhor politics, but I wouldn’t mind being a PM for maybe a week, just to have the feeling of everything around you well taken care of, thereby giving you the freedom to focus solely on your job.
  • fayalargeau 4y ago
    haha nice
• MangoCoffee 4y ago
  is 400k driven by the tech bubble? is 400k still viable? when companies like coinbase, shopee, tesla...etc. is laying off people or hire freeze. the current events is giving me the dotcom bubble vibe.
• Jugurtha 4y ago
  Probing questions, by me, here: https://twitter.com/jugurthahadjar/status/1537135901024845824 https://twitter.com/jugurthahadjar/status/153713590102484582... The person claims to have neither salary[0] nor equity[1]. - [0]: https://twitter.com/typesfast/status/1536703876505735168 https://twitter.com/typesfast/status/1536703876505735168, "I don't take a salary". - [1]: https://twitter.com/typesfast/status/1536735397644050432 https://twitter.com/typesfast/status/1536735397644050432, "I also dont earn any equity for working here."
  • missingcolours 4y ago
    He says he doesn't earn equity, not that he doesn't have any. He's the founder of his company, he probably has quite a bit of equity.
    • Jugurtha 4y ago
      Hence my subsequent tweets taking that into consideration. I was arguing to the strongest position of their tweet with regards to the no-equity/no-salary thing. People often use "not earn equity" where the key word is "earn" and the short-cut is "additional" equity for demagogical, bull-shit, or con-manny reasons when they already had played the "no-salary" card. Don't ask me how I know.
• mkl95 4y ago
  If I feed my talented monkey 1/100 of the bananas he grabs for me, some hungrier monkeys will argue I'm overfeeding him. I may be greedy and replace him, or keep him because I'm rich enough that it makes a negligible difference.
• heynowheynow 4y ago
  It depends. Goog and Meta pay good engineers (SWE/SREs) twice that and more. For engineering managers, 3-5x that and more. Edit: People gotta hate on those who bring home the bacon. America is one of the least fair countries in the world because it's excessively unconstrained in some areas and missing fundamental services other countries provide.
• codegeek 4y ago
  My honest opinion. If you are profitable and not burning free VC cash, pay whatever you want by all means including $1m/Year if you want/can. But if you are using Free/VC money and you are deeply underwater, throwing 400k or whatever is not something you should do just to compete. I think it is unfair to legit businesses that have to work with what they got vs the cool startups. Yea I am a bit salty but being honest.
• tompark 4y ago
  He clarified later: https://twitter.com/typesfast/status/1537151707141918720 https://twitter.com/typesfast/status/1537151707141918720 My point was not that engineers are overpaid. That's not for me to judge. Only that many business models won't support those rates. That's the CEO's fault not the engineers. See for example: https://twitter.com/typesfast/status/1537151707141918720/photo/1 His original statement ("It might be that many software business models don't work when engineers cost $400k/year.") is pretty obvious. Suppose you have a website that caters to competitive Mahjong players, and earn revenue based on a combination of pro subscriptions, micropayments, adverts, and sponsorships. If your Trailing Twelve Month revenue is $120K, you couldn't afford an engineer who costs $100k/yr, much less $400k.
  • fayalargeau 4y ago
    completely missed that. thanks for sharing.
• aristofun 4y ago
  If you bring less than 400k to the table — you’re overpaid. Else — otherwise. This is why same skill level people get different salaries in different companies. Yes, some companies overpay hoping for rapid growth. Others - underpay, accounting for risks or just because they can (like in Europe). It’s obvious. As obvious as overfunded startups with worthless business models out there. But without an army of unknown musicians there would never be Mozart.
  • davidguetta 4y ago
    You are actually overpaid also if you bring exactly 400k