3 ms·

Companies are being cheap. Software engineers are only providing 200k dollars worth of value? I find that hard to believe.

by tayo42 3y ago

Aurornis 3y ago
Compensation isn't proportional to the value you produce. It never was. The hiring market is a market. Prices in a market are set by supply and demand. The value you produce only sets an upper limit on your compensation because companies don't want to lose money by employing people.
- tayo42 3y ago
  yeah sure its a market, the money is there though to get. that doesn't change companies are being cheap. nothing wrong trying to extract as much as you can. companies that pay low are signaling they don't value their workers.
- mempko 3y ago
  It's a market but not that great of a market. No transparent price discovery. Huge market manipulation by the big guys making deals with each other to suppress wages (https://www.washingtonpost.com/news/the-switch/wp/2014/04/23/what-the-apple-wage-collusion-case-says-about-silicon-valleys-labor-economy/ https://www.washingtonpost.com/news/the-switch/wp/2014/04/23...) Yes, wages are high relative to other industries but the large tech companies are immensely profitable. Wages can be even higher without market manipulation. So yes, it's a market but a really really bad one in ways we value markets to be good.
- nonethewiser 3y ago
  > The hiring market is a market. Prices in a market are set by supply and demand. Demand for software engineers is partially explained by the value software engineers generate. The value a job creates is obviously a factor. Imagine a job that creates absolutely no value but has a limited supply of qualified people. It wont even exist let alone pay anything.
- dv_dt 3y ago
  > Compensation isn't proportional to the value you produce. Contrast that with product/service pricing where the business advice is to capture as big a slice of the end value produced as possible. Compensation is proportional to the value produced, and is also constrained by factors like, how close the position is to the income stream, if the dept you're working for is considered a cost or profit center. But basically different companies, industries, and situations have different typical proportional factors.
- the_only_law 3y ago
  What kills me is seeing ads for boot camps talking about “tech jobs are booming in [your area]”. Yet I’ve had the fewest number of recruiter contact in my career ever, including when I was trying to break into the industry. Not that I don’t expect the industry to be full of liars at this point, but it still losses me off when I see them.
- cudgy 3y ago
  So, if a company has no profit, they would pay nothing for software engineers or ask them to pay to work there?
HDThoreaun 3y ago
Salary has never been about the value you provide. It's about the cost to replace you. Companies will never pay you more than you cost to replace.
- nonethewiser 3y ago
  > Salary has never been about the value you provide. It's about the cost to replace you. Companies will never pay you more than you cost to replace. Those things aren’t mutually exclusive. To some extent, the value you bring is whats behind the cost to replace you. And I dont mean in some proportional relationship to revenue or profit or something. I just mean software engineers create more value than someone who can juggle chairs, who is incredibly hard to replace. Of course if there were 4 billion software engineers tomorrow, wages would go down. We agree on that. But business value is a factor.
- 1270018080 3y ago
  Which is why we need a union, despite what libertarians think they are above.
  - w4termelon 3y ago
    > Which is why we need a union Development is global as opposed to, say, cab driving. So, tech companies from other parts of the world will applaud your decision. Keep pushing new regulations, we'll reap the benefits.
    - mostlysimilar 3y ago
      Cool, so you can be worked into the ground by abusive landlords who add no value. We'll pool our skills and create organizations of engineers who want better for themselves and the world.
  - dang 3y ago
    > Which is why we need a union, despite what libertarian fetishist tech bros think they are above Please make your substantive points without snark or name-calling. This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html. Edit: it's not good to stealth-edit your comments after the fact, especially when doing so deprives replies of their original meaning. If you're going to make an edit that affects conversation in this way, please do it append-only (as I've done here) with an "Edit:" prefix or similar.
glimshe 3y ago
~200K, inflation adjusted, is historically the salary of a competent senior software developer in the US. Give or take depending on location, so you can expect around this for remote (which doesn't suffer the same labor shortage pressure of some regions). A friend of mine told me he joined Microsoft right out of college in 1998 for 35K/year + 10% bonus. This is around 70K-80K today. As a Senior II Software Engineer at Microsoft in 2014, I made around 180K total comp, which is around 230K today. In the past 3-5 years we've seen incredibly distorted job markets. 500K is a salary you often see for CEOs and Directors of "normal companies". It's an incredible salary that puts you in the top 1% income in many states. I'm not saying software engineers don't deserve a lot of money, and by all means, let's try to get as much as we can, but I'm just saying that the past few years have been abnormal and we're seeing the correction now.
- tayo42 3y ago
  i mean the low paying jobs he refers to only pay like 100k, if your paying sr engineers and leads 100-150k you are being cheap when you consider how much value we provide. if you think engineers only provide maybe 200k dollars of value then sure pay 100k but i find that hard to believe
  - glimshe 3y ago
    Also have in mind that there are "Seniors" and "Seniors". 200K is a normal salary for a true Senior in a company that is either tech-focused or very reliant on tech. Companies outside the tech hubs, or companies where custom tech only provides incremental value to their business, will certainly pay less, and salaries closer to 100K are actually not that uncommon. They often don't even have the ability to accurately evaluate the skill set of a Senior Software Engineer. So what you call Senior and what they call Senior isn't the same thing. I'm not saying that you should accept 100K, simply that the market is very diverse and we are past the excesses of the past.

Companies are being cheap. Software engineers are only providing 200k dollars worth of value? I find that hard to believe.

by tayo42 3y ago

Companies are being cheap. Software engineers are only providing 200k dollars worth of value? I find that hard to believe.

Aurornis 3y ago

Compensation isn't proportional to the value you produce. It never was. The hiring market is a market. Prices in a market are set by supply and demand. The value you produce only sets an upper limit on your compensation because companies don't want to lose money by employing people.

tayo42 3y ago
yeah sure its a market, the money is there though to get. that doesn't change companies are being cheap. nothing wrong trying to extract as much as you can. companies that pay low are signaling they don't value their workers.
mempko 3y ago
It's a market but not that great of a market. No transparent price discovery. Huge market manipulation by the big guys making deals with each other to suppress wages (https://www.washingtonpost.com/news/the-switch/wp/2014/04/23/what-the-apple-wage-collusion-case-says-about-silicon-valleys-labor-economy/ https://www.washingtonpost.com/news/the-switch/wp/2014/04/23...) Yes, wages are high relative to other industries but the large tech companies are immensely profitable. Wages can be even higher without market manipulation. So yes, it's a market but a really really bad one in ways we value markets to be good.
nonethewiser 3y ago
> The hiring market is a market. Prices in a market are set by supply and demand. Demand for software engineers is partially explained by the value software engineers generate. The value a job creates is obviously a factor. Imagine a job that creates absolutely no value but has a limited supply of qualified people. It wont even exist let alone pay anything.
dv_dt 3y ago
> Compensation isn't proportional to the value you produce. Contrast that with product/service pricing where the business advice is to capture as big a slice of the end value produced as possible. Compensation is proportional to the value produced, and is also constrained by factors like, how close the position is to the income stream, if the dept you're working for is considered a cost or profit center. But basically different companies, industries, and situations have different typical proportional factors.
the_only_law 3y ago
What kills me is seeing ads for boot camps talking about “tech jobs are booming in [your area]”. Yet I’ve had the fewest number of recruiter contact in my career ever, including when I was trying to break into the industry. Not that I don’t expect the industry to be full of liars at this point, but it still losses me off when I see them.
cudgy 3y ago
So, if a company has no profit, they would pay nothing for software engineers or ask them to pay to work there?

HDThoreaun 3y ago

Salary has never been about the value you provide. It's about the cost to replace you. Companies will never pay you more than you cost to replace.

nonethewiser 3y ago
> Salary has never been about the value you provide. It's about the cost to replace you. Companies will never pay you more than you cost to replace. Those things aren’t mutually exclusive. To some extent, the value you bring is whats behind the cost to replace you. And I dont mean in some proportional relationship to revenue or profit or something. I just mean software engineers create more value than someone who can juggle chairs, who is incredibly hard to replace. Of course if there were 4 billion software engineers tomorrow, wages would go down. We agree on that. But business value is a factor.
1270018080 3y ago
Which is why we need a union, despite what libertarians think they are above.
- w4termelon 3y ago
  > Which is why we need a union Development is global as opposed to, say, cab driving. So, tech companies from other parts of the world will applaud your decision. Keep pushing new regulations, we'll reap the benefits.
  - mostlysimilar 3y ago
    Cool, so you can be worked into the ground by abusive landlords who add no value. We'll pool our skills and create organizations of engineers who want better for themselves and the world.
- dang 3y ago
  > Which is why we need a union, despite what libertarian fetishist tech bros think they are above Please make your substantive points without snark or name-calling. This is in the site guidelines: https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html. Edit: it's not good to stealth-edit your comments after the fact, especially when doing so deprives replies of their original meaning. If you're going to make an edit that affects conversation in this way, please do it append-only (as I've done here) with an "Edit:" prefix or similar.

glimshe 3y ago

~200K, inflation adjusted, is historically the salary of a competent senior software developer in the US. Give or take depending on location, so you can expect around this for remote (which doesn't suffer the same labor shortage pressure of some regions). A friend of mine told me he joined Microsoft right out of college in 1998 for 35K/year + 10% bonus. This is around 70K-80K today. As a Senior II Software Engineer at Microsoft in 2014, I made around 180K total comp, which is around 230K today. In the past 3-5 years we've seen incredibly distorted job markets. 500K is a salary you often see for CEOs and Directors of "normal companies". It's an incredible salary that puts you in the top 1% income in many states. I'm not saying software engineers don't deserve a lot of money, and by all means, let's try to get as much as we can, but I'm just saying that the past few years have been abnormal and we're seeing the correction now.

tayo42 3y ago
i mean the low paying jobs he refers to only pay like 100k, if your paying sr engineers and leads 100-150k you are being cheap when you consider how much value we provide. if you think engineers only provide maybe 200k dollars of value then sure pay 100k but i find that hard to believe
- glimshe 3y ago
  Also have in mind that there are "Seniors" and "Seniors". 200K is a normal salary for a true Senior in a company that is either tech-focused or very reliant on tech. Companies outside the tech hubs, or companies where custom tech only provides incremental value to their business, will certainly pay less, and salaries closer to 100K are actually not that uncommon. They often don't even have the ability to accurately evaluate the skill set of a Senior Software Engineer. So what you call Senior and what they call Senior isn't the same thing. I'm not saying that you should accept 100K, simply that the market is very diverse and we are past the excesses of the past.