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"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 Sil

"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?
  - CPlatypus 15y ago
    Thank you for (belatedly) having the balls to engage instead of just downvoting. "All over the map" doesn't count, or else half of the threads on HN would have zero comments, and "doesn't add to the discussion" is absurd. The very fact that it took you three paragraphs to explain the nature of your objection indicates otherwise. I added far more to the discussion than the downvote-cowards had up to that point (and probably ever). Your "everyone everywhere else" strawman is even more risible. Stick to claims I actually made, or be dismissed as a dishonest coward. I was certainly never confronted with the "fact" that SV engineers "certainly" do create proportional value. I was confronted with a bunch of bad math that proves nothing. Did you miss the part about the target ratio not needing to be 1:1? Or the part about developers' contribution during a year not being the only (or even main) determinant of revenue during that same year, which makes division of revenue for all by salary for some utterly ridiculous? Where are these engineers who drive the bottom line by 10x their burdened cost (not just salary BTW)? I've been one myself, I've met others, but for every such person I've also met dozens who contributed 10% or less over their cost. You need to stop assuming, and start measuring. OK, on to the point about whether SV engineers are worth more than those elsewhere. Let's forget Bengaluru for a moment. Consider Boston or Boulder. Brisbane or Birmingham. Engineers there are every bit as good as those in SV. Sure, there are costs involved in having developers who are elsewhere, but that's balanced by the extra cost of building out offices etc. in one of the most expensive markets in the world. Buy some decent teleconferencing gear, provide a generous travel budget, and you'll still come out ahead even in these relatively high-salary locations. Now consider a place like Bengaluru. I haven't worked with everyone here, nor have I worked with everyone in SV, but I've worked with enough to be skeptical of the assumption that the average SV engineer can deliver enough to be worth several times the salary. Some can, most can't. That's two strikes against you. Let's go for three. Should the free market determine wages? Absolutely. Do these no-poaching agreements subvert the free market? Again, absolutely. Does that add up to a conclusion that a bidding war would be a good thing? Absolutely not. CDNF. A temperate amount of poaching would be a good thing, but I don't think that's likely to happen. What's more likely to happen comes back to your statement about "a net loss or wash at best" because at some point that does become true. I personally think it has already become true at many companies. Those newly hired engineers are going to count against this year's budget; their contribution to revenue won't show up until next year's. The extra cost of hiring that first developer of the year has to be made up somehow. Part of it will be made up by reducing capital costs and travel budgets and such. Part of it will be made up by hiring nine new developers instead of ten (wherever they are) or by giving smaller raises to current employees (including developers). Maybe that "rock star" you just hired away from Google will pay off next year, but this year (and probably the next couple) their bidding-war premium will exert downward pressure on everyone else. A bidding war is not only bad for developers elsewhere, or for non-developers. It's bad for other developers in SV besides the few who win the lottery. The problem with the no-poaching agreements is that they've created pent-up demand. Now, like soda that has been shaken, the newly opened bottle is going to fizz all over the place. Those making the agreements should have been prosecuted years ago, because waiting has created an even bigger mess. The absolute least likely outcome is an efficient short-term reallocation of resources. More likely is that some companies without deep pockets will be starved out of the market.

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?
- CPlatypus 15y ago
  Thank you for (belatedly) having the balls to engage instead of just downvoting. "All over the map" doesn't count, or else half of the threads on HN would have zero comments, and "doesn't add to the discussion" is absurd. The very fact that it took you three paragraphs to explain the nature of your objection indicates otherwise. I added far more to the discussion than the downvote-cowards had up to that point (and probably ever). Your "everyone everywhere else" strawman is even more risible. Stick to claims I actually made, or be dismissed as a dishonest coward. I was certainly never confronted with the "fact" that SV engineers "certainly" do create proportional value. I was confronted with a bunch of bad math that proves nothing. Did you miss the part about the target ratio not needing to be 1:1? Or the part about developers' contribution during a year not being the only (or even main) determinant of revenue during that same year, which makes division of revenue for all by salary for some utterly ridiculous? Where are these engineers who drive the bottom line by 10x their burdened cost (not just salary BTW)? I've been one myself, I've met others, but for every such person I've also met dozens who contributed 10% or less over their cost. You need to stop assuming, and start measuring. OK, on to the point about whether SV engineers are worth more than those elsewhere. Let's forget Bengaluru for a moment. Consider Boston or Boulder. Brisbane or Birmingham. Engineers there are every bit as good as those in SV. Sure, there are costs involved in having developers who are elsewhere, but that's balanced by the extra cost of building out offices etc. in one of the most expensive markets in the world. Buy some decent teleconferencing gear, provide a generous travel budget, and you'll still come out ahead even in these relatively high-salary locations. Now consider a place like Bengaluru. I haven't worked with everyone here, nor have I worked with everyone in SV, but I've worked with enough to be skeptical of the assumption that the average SV engineer can deliver enough to be worth several times the salary. Some can, most can't. That's two strikes against you. Let's go for three. Should the free market determine wages? Absolutely. Do these no-poaching agreements subvert the free market? Again, absolutely. Does that add up to a conclusion that a bidding war would be a good thing? Absolutely not. CDNF. A temperate amount of poaching would be a good thing, but I don't think that's likely to happen. What's more likely to happen comes back to your statement about "a net loss or wash at best" because at some point that does become true. I personally think it has already become true at many companies. Those newly hired engineers are going to count against this year's budget; their contribution to revenue won't show up until next year's. The extra cost of hiring that first developer of the year has to be made up somehow. Part of it will be made up by reducing capital costs and travel budgets and such. Part of it will be made up by hiring nine new developers instead of ten (wherever they are) or by giving smaller raises to current employees (including developers). Maybe that "rock star" you just hired away from Google will pay off next year, but this year (and probably the next couple) their bidding-war premium will exert downward pressure on everyone else. A bidding war is not only bad for developers elsewhere, or for non-developers. It's bad for other developers in SV besides the few who win the lottery. The problem with the no-poaching agreements is that they've created pent-up demand. Now, like soda that has been shaken, the newly opened bottle is going to fizz all over the place. Those making the agreements should have been prosecuted years ago, because waiting has created an even bigger mess. The absolute least likely outcome is an efficient short-term reallocation of resources. More likely is that some companies without deep pockets will be starved out of the market.