6 ms·

What's the cartel keeping SWE salaries high?

by akavi 4y ago

hguant 4y ago
Superficially, FAANG offering massive compensation packages to anyone who fits their model of "Stanford/MIT degree, willing to suffer through LeetCode challenges", which has a massive effect on the market for SWE, as it changes the bar for what's _possible_ in the realm of compensation, and ensures that the cartel gets its pick of SWE talent, simply because it can offer substantially more than most other companies. Interestingly, those companies are also the ones that I think have put the most effort into quantifying the value of a software developer to the business as a whole. The salaries look obscene to many people, but the cartel pays them because it believes it's getting more value than it's paying for.
- williamDafoe 4y ago
  Don't forget the 50-60 hr real workweeks (more than 10% of the search team I was on was always working 11pm-12pm midnight). Turnover is actually pretty high at Google. My whole team (9 people) quit in the year that I left.
- csdvrx 4y ago
  > the cartel gets its pick of SWE talent, simply because it can offer substantially more than most other companies. Some people will refuse to work for a FAANG as a matter of principle, and they don't have a monopsony, so it's not exactly a cartel I'd say
- thirtyseven 4y ago
  That's... not a cartel though? A cartel is a group of firms conspiring to artificially control the supply of some good in order to increase its price, what you described is just several independent firms that have a high demand for workers and are bidding up salaries for them. It was more cartel-like when Apple and Google were conspiring to keep tech salaries down by setting salary caps.
- givemeethekeys 4y ago
  Do you know how much money the sales people in these organizations make on the backs of those engineers?
- 908B64B197 4y ago
  > Stanford/MIT degree, willing to suffer through LeetCode challenges Or who actually completed a data structure and algorithm course as well as a discrete math course. I mean someone could grind leetcode for hours and rote instead of putting the work to complete these classes I suppose.
drelihan 4y ago
Probably referring to recent articles / interviews that claim how large tech companies over-hired in efforts to take supply out of the market for competitors. https://fortune.com/2023/03/10/google-over-hired-talent-do-nothing-fake-work-stop-working-rivals-former-paypal-boss-keith-rabois/amp/ https://fortune.com/2023/03/10/google-over-hired-talent-do-n...
apercu 4y ago
High? Based on what data? Is inventing things all day and understanding rapidly changing complex systems easier than family law? Outside a few thousand high paying jobs concentrated in a few regions, if you objectively look at most software developers worldwide, they're barely middle class.
- jltsiren 4y ago
  I'd say most software developers are comfortably middle class. They are not upper middle class professionals in the same way as lawyers and doctors often are. Median full-time income is a good starting point for defining the middle class, at least in developed countries. People earning around the median tend to be pretty good examples of what middle-class life looks like. Most software developers earn above the median, but not so much above that their lives would be qualitatively different. In the US, the median is currently somewhere between $55k and $60k.
  - apercu 4y ago
    I guess I define middle class as somewhat comfortable.
  - jwestbury 4y ago
    This is a fundamental misunderstanding of "middle class," which has no connection to median income, but is exactly what it says on the tin -- a class between the upper classes and the lower classes. The earliest recognised middle classes were the wealthy merchant class who had similar wealth to the upper classes, but less social capital -- they were definitively above the lower class, whose labour was owned by the upper classes. These were the free men, or yeomen, of the middle ages, for instance -- people who owned their land, likely had their own businesses, and weren't beholden to the upper class. In more recent times, such as the 18th-19th century, the middle class expanded dramatically to include typical professionals, such as doctors and lawyers -- people who may rub shoulders with the elites, but whose wealth was still tied to their jobs. If their business failed, they would often no longer be middle class, whereas the upper class could likely fall back on connections and maintain good social standing. The median worker was decidedly lower class. This structure broke down somewhat in the US and, to a lesser extent, in western Europe in the post-war era, due to an abundance of demand for labour, which allowed lower class workers to enjoy traditionally middle-class luxuries, which included widespread homeownership, often multiple cars per family, etc. But don't make the mistake of thinking a well-paid factory worker was middle class -- they were working class. Most software engineers worldwide are working class. In certain pockets -- the Bay Area, Seattle, etc. -- or certain industries -- such as finance -- they are closer to middle class by earnings, but still working class by vocation, as they (we) work for a living and do not own our own businesses (as many doctors and lawyers do).
pwinnski 4y ago
You might have misunderstood. Historically cartels have worked to keep SWE salaries low, not high[0]. 0. https://qz.com/247251/silicon-valley-hasnt-got-away-with-its-no-poaching-cartel-just-yet https://qz.com/247251/silicon-valley-hasnt-got-away-with-its...
- nonethewiser 4y ago
  That doesn’t fit his analogy though. It also doesn’t make sense that the cartel would also be the primary source of income (the company, compared to diamond mine + cartel).
  - pwinnski 4y ago
    Ah, okay, I see now. Feel free to define analogy as a thing in which everything applies in exactly the same way to the level of detail that it really means you're describing the exact same thing using different words, while the rest of us go on with understanding that analogies are limited-purpose.

What's the cartel keeping SWE salaries high?

by akavi 4y ago

What's the cartel keeping SWE salaries high?

Superficially, FAANG offering massive compensation packages to anyone who fits their model of "Stanford/MIT degree, willing to suffer through LeetCode challenges", which has a massive effect on the market for SWE, as it changes the bar for what's _possible_ in the realm of compensation, and ensures that the cartel gets its pick of SWE talent, simply because it can offer substantially more than most other companies. Interestingly, those companies are also the ones that I think have put the most effort into quantifying the value of a software developer to the business as a whole. The salaries look obscene to many people, but the cartel pays them because it believes it's getting more value than it's paying for.

williamDafoe 4y ago
Don't forget the 50-60 hr real workweeks (more than 10% of the search team I was on was always working 11pm-12pm midnight). Turnover is actually pretty high at Google. My whole team (9 people) quit in the year that I left.
csdvrx 4y ago
> the cartel gets its pick of SWE talent, simply because it can offer substantially more than most other companies. Some people will refuse to work for a FAANG as a matter of principle, and they don't have a monopsony, so it's not exactly a cartel I'd say
thirtyseven 4y ago
That's... not a cartel though? A cartel is a group of firms conspiring to artificially control the supply of some good in order to increase its price, what you described is just several independent firms that have a high demand for workers and are bidding up salaries for them. It was more cartel-like when Apple and Google were conspiring to keep tech salaries down by setting salary caps.
givemeethekeys 4y ago
Do you know how much money the sales people in these organizations make on the backs of those engineers?
908B64B197 4y ago
> Stanford/MIT degree, willing to suffer through LeetCode challenges Or who actually completed a data structure and algorithm course as well as a discrete math course. I mean someone could grind leetcode for hours and rote instead of putting the work to complete these classes I suppose.

drelihan 4y ago

Probably referring to recent articles / interviews that claim how large tech companies over-hired in efforts to take supply out of the market for competitors. https://fortune.com/2023/03/10/google-over-hired-talent-do-nothing-fake-work-stop-working-rivals-former-paypal-boss-keith-rabois/amp/ https://fortune.com/2023/03/10/google-over-hired-talent-do-n...

apercu 4y ago

High? Based on what data? Is inventing things all day and understanding rapidly changing complex systems easier than family law? Outside a few thousand high paying jobs concentrated in a few regions, if you objectively look at most software developers worldwide, they're barely middle class.

jltsiren 4y ago
I'd say most software developers are comfortably middle class. They are not upper middle class professionals in the same way as lawyers and doctors often are. Median full-time income is a good starting point for defining the middle class, at least in developed countries. People earning around the median tend to be pretty good examples of what middle-class life looks like. Most software developers earn above the median, but not so much above that their lives would be qualitatively different. In the US, the median is currently somewhere between $55k and $60k.
- apercu 4y ago
  I guess I define middle class as somewhat comfortable.
- jwestbury 4y ago
  This is a fundamental misunderstanding of "middle class," which has no connection to median income, but is exactly what it says on the tin -- a class between the upper classes and the lower classes. The earliest recognised middle classes were the wealthy merchant class who had similar wealth to the upper classes, but less social capital -- they were definitively above the lower class, whose labour was owned by the upper classes. These were the free men, or yeomen, of the middle ages, for instance -- people who owned their land, likely had their own businesses, and weren't beholden to the upper class. In more recent times, such as the 18th-19th century, the middle class expanded dramatically to include typical professionals, such as doctors and lawyers -- people who may rub shoulders with the elites, but whose wealth was still tied to their jobs. If their business failed, they would often no longer be middle class, whereas the upper class could likely fall back on connections and maintain good social standing. The median worker was decidedly lower class. This structure broke down somewhat in the US and, to a lesser extent, in western Europe in the post-war era, due to an abundance of demand for labour, which allowed lower class workers to enjoy traditionally middle-class luxuries, which included widespread homeownership, often multiple cars per family, etc. But don't make the mistake of thinking a well-paid factory worker was middle class -- they were working class. Most software engineers worldwide are working class. In certain pockets -- the Bay Area, Seattle, etc. -- or certain industries -- such as finance -- they are closer to middle class by earnings, but still working class by vocation, as they (we) work for a living and do not own our own businesses (as many doctors and lawyers do).

pwinnski 4y ago

You might have misunderstood. Historically cartels have worked to keep SWE salaries low, not high[0]. 0. https://qz.com/247251/silicon-valley-hasnt-got-away-with-its-no-poaching-cartel-just-yet https://qz.com/247251/silicon-valley-hasnt-got-away-with-its...

nonethewiser 4y ago
That doesn’t fit his analogy though. It also doesn’t make sense that the cartel would also be the primary source of income (the company, compared to diamond mine + cartel).
- pwinnski 4y ago
  Ah, okay, I see now. Feel free to define analogy as a thing in which everything applies in exactly the same way to the level of detail that it really means you're describing the exact same thing using different words, while the rest of us go on with understanding that analogies are limited-purpose.