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If developer salaries grow out of proportion to the value they create (which IMO has already happened), that creates downward pressure for everyone else in the

If developer salaries grow out of proportion to the value they create (which IMO has already happened), that creates downward pressure for everyone else in the value chain - non-technical employees, suppliers, etc. Also, when the bubble inevitably bursts it will affect lots of people who never benefited from the inflation in the first place. Bidding wars and speculation are not always good in the long term. [edit] Allow me to expand on that in a very specific way. I'm currently sitting in Bengaluru, surrounded by some excellent developers. What effect does wage inflation in Silicon Valley have on people here? Every time a Silicon Valley engineer's salary gets inflated by US$20K, how many people here are affected by reduced job prospects or raises? From that perspective, what's hard to see is how a bidding war among SV employers could possibly be a good thing.

salem 15y ago
When Cisco was booming, they made a big deal about the metric of revenue per employee, which hit $1m. Apple and Google both exceeded this number in 2008, and with decent margins. I think you'll have a tough time convincing their engineers that their salary is out of proportion to the value they created. http://royal.pingdom.com/2009/05/14/congratulations-google-staff-210k-in-profit-per-head-in-2008/ http://royal.pingdom.com/2009/05/14/congratulations-google-s...
- CPlatypus 15y ago
  "In proportion" merely means an optimal or expected ratio, which might be considerably greater than 1:1. Therefore, even if the value:salary ratio for that Silicon Valley engineer is 10:1, if a 20:1 ratio is possible somewhere else then that Silicon Valley engineer's salary is still out of proportion. Also, dividing revenue per employee by salary for a subset of employees doesn't really give you the right ratio. A lot of corporate revenue is not directly tied to developer contributions, and it's a rare employee who actually moves the bottom line by 10x their salary. At best you could divide the revenue attributable to that year's development by the salary paid during that time, but even that's a weak approximation.
  - CPlatypus 15y ago
    I'd appreciate it if the downvote-abusing coward(s) would explain their objection to that comment. It's quite factual, and relevant, and IMO importantf for people to consider. Do you seriously believe that revenue for all employees divided by salary for some tells you anything meaningful? Do you believe that availability of a better ratio by hiring someone else doesn't mean you're overpaid? Come on, let's have some actual debate instead of bullying.
    - aptwebapps 15y ago
      Stop telling people they aren't worth a million bucks and they'll stop voting you down. Wouldn't it be a neat if user profiles here displayed a downvote/reply metric? Not replies in general, but replies to comments which the user had downvoted.
    - bluedanieru 15y ago
      You're getting downvoted because your position is all over the map, and doesn't add to the discussion: You start out claiming that developer salaries in SV are out of proportion because SV developers do not create enough value. You also state that if developers are paid too much then there won't be enough left over for other workers, non-technical and such. Of course, for that to be true we'd have to assume that hiring an engineer in Silicon Valley is a net loss or a wash at best, because otherwise hiring one actually means more resources for further hiring and salary increases. Then, when confronted with the fact that they most certainly do create proportional value and at a rather healthy ratio no less, you instead make the claim that they are overpaid because cheaper work can be had elsewhere (in Bengaluru). You make the implicit assumption that, for a firm based in Silicon Valley, an engineer in Silicon Valley is equivalent to an engineer in Bengaluru, India (or anywhere), provided they are equally talented. Not many of your readers will grant you that point. At any rate you seem to claim the market should determine what the fair salary is, when the very issue at hand is collusion by several large employers in Silicon Valley to distort the job market there. Is there any force acting in the opposite direction that you think is raising salaries there? Did all the engineers there unionize when nobody was looking? Because otherwise developer salaries are determined by market forces. Everywhere. (Again, with the issue at hand being an exception, but an exception not in favor of your argument.) Your principal beef seems to be that developers in India don't make enough money compared to their peers in the States and specifically in the Valley. You make the claim that rising salaries in Silicon Valley mean lower salaries and reduced job prospects in Bengaluru. You do not justify this claim nor do you give anyone any reason to give a shit in the first place. Let me make an equivalent claim: rising salaries in the Valley mean lower salaries for everyone everywhere else. See now why it's bullshit?
michaelochurch 15y ago
If developer salaries grow out of proportion to the value they create (which IMO has already happened) WAT? Top software developers are very well-paid. No complaints on that one. That said, the value-add of a good software engineer (not a "rock star", just 95th-percentile, which is average in some communities, e.g. functional programming) is easily half a million a year.

salem 15y ago

When Cisco was booming, they made a big deal about the metric of revenue per employee, which hit $1m. Apple and Google both exceeded this number in 2008, and with decent margins. I think you'll have a tough time convincing their engineers that their salary is out of proportion to the value they created. http://royal.pingdom.com/2009/05/14/congratulations-google-staff-210k-in-profit-per-head-in-2008/ http://royal.pingdom.com/2009/05/14/congratulations-google-s...

CPlatypus 15y ago
"In proportion" merely means an optimal or expected ratio, which might be considerably greater than 1:1. Therefore, even if the value:salary ratio for that Silicon Valley engineer is 10:1, if a 20:1 ratio is possible somewhere else then that Silicon Valley engineer's salary is still out of proportion. Also, dividing revenue per employee by salary for a subset of employees doesn't really give you the right ratio. A lot of corporate revenue is not directly tied to developer contributions, and it's a rare employee who actually moves the bottom line by 10x their salary. At best you could divide the revenue attributable to that year's development by the salary paid during that time, but even that's a weak approximation.
- CPlatypus 15y ago
  I'd appreciate it if the downvote-abusing coward(s) would explain their objection to that comment. It's quite factual, and relevant, and IMO importantf for people to consider. Do you seriously believe that revenue for all employees divided by salary for some tells you anything meaningful? Do you believe that availability of a better ratio by hiring someone else doesn't mean you're overpaid? Come on, let's have some actual debate instead of bullying.
  - aptwebapps 15y ago
    Stop telling people they aren't worth a million bucks and they'll stop voting you down. Wouldn't it be a neat if user profiles here displayed a downvote/reply metric? Not replies in general, but replies to comments which the user had downvoted.
  - bluedanieru 15y ago
    You're getting downvoted because your position is all over the map, and doesn't add to the discussion: You start out claiming that developer salaries in SV are out of proportion because SV developers do not create enough value. You also state that if developers are paid too much then there won't be enough left over for other workers, non-technical and such. Of course, for that to be true we'd have to assume that hiring an engineer in Silicon Valley is a net loss or a wash at best, because otherwise hiring one actually means more resources for further hiring and salary increases. Then, when confronted with the fact that they most certainly do create proportional value and at a rather healthy ratio no less, you instead make the claim that they are overpaid because cheaper work can be had elsewhere (in Bengaluru). You make the implicit assumption that, for a firm based in Silicon Valley, an engineer in Silicon Valley is equivalent to an engineer in Bengaluru, India (or anywhere), provided they are equally talented. Not many of your readers will grant you that point. At any rate you seem to claim the market should determine what the fair salary is, when the very issue at hand is collusion by several large employers in Silicon Valley to distort the job market there. Is there any force acting in the opposite direction that you think is raising salaries there? Did all the engineers there unionize when nobody was looking? Because otherwise developer salaries are determined by market forces. Everywhere. (Again, with the issue at hand being an exception, but an exception not in favor of your argument.) Your principal beef seems to be that developers in India don't make enough money compared to their peers in the States and specifically in the Valley. You make the claim that rising salaries in Silicon Valley mean lower salaries and reduced job prospects in Bengaluru. You do not justify this claim nor do you give anyone any reason to give a shit in the first place. Let me make an equivalent claim: rising salaries in the Valley mean lower salaries for everyone everywhere else. See now why it's bullshit?

michaelochurch 15y ago

If developer salaries grow out of proportion to the value they create (which IMO has already happened) WAT? Top software developers are very well-paid. No complaints on that one. That said, the value-add of a good software engineer (not a "rock star", just 95th-percentile, which is average in some communities, e.g. functional programming) is easily half a million a year.