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As I see it, it's not so much the fault of research institutions and hardware companies that salaries are not competitive with software. It's that the software

• imtringued 3y ago
  >. The economies of scale of the software industry allows excess central bank printed money to flow predominantly towards software companies and VC backed mega startups. I don't know why people keep saying this. The central bank doesn't do this. It doesn't hand over money to investors. I don't like saying it but this sounds too much like a conspiracy theory to me. I mean, the pathway for why exactly this is supposed to happen is not explained at all. In reality commercial banks create the money and they don't give a damn about small or medium sized companies. The central bank is just there to make sure the money system doesn't collapse in either direction. This means they do tend to support commercial banks with excess reserves but those banks make the decisions based on the expectation of getting that money back, which is in stark contrast to the free money rethoric. If someone is doing something it's not the central banks. Have you tried working with hardware by the way? Anything related to hardware has a huge capital intensitivity and this means more of the money is going into paying interest or capital returns to investors instead of employees. If the earning potential of a software and hardware developer are the same but each hardware job requires $400k in capital then just the usual 8% return expectation would cut the hardware developer's salary by $32k. Meanwhile the software guy needs a laptop and monitors on a desk in an office. None of this has anything to do with central banks. If anything cheap central bank money would disproportionately benefit the hardware guy.
  • hnfong 3y ago
    > I don't know why people keep saying this. Does it occur to you that maybe people keep saying this because that's the truth? I think it suffices to say that at least for the COVID round in the US, the "money printing" was in the form of the Fed buying US treasuries and the US government paying out trillions of dollars to normal people in the form of COVID stimulus checks. Yes, a significant part of it directly went to normal people, and it wasn't in the form of commercial banks lending money out. You're advised to look at the Fed balance sheet, covid stimulus checks, the market cap of big tech, and the flow of speculative money (VC capital [or startup valuations], BTC, GME, etc.), especially with respect to the dates and timings. If you think you learned everything you need to know about economics from some 10+ year old textbook, let me give you an update: in the US there's no "fractional reserve banking" system any more, unless the "fraction" is zero. Basically it's QE all the way now. ( https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm )
    • whatisthiseven 3y ago
      Software salaries have been higher than hardware salaries since well before covid. So that part of your theory is bunk. Had it occurred to you some people repeat stuff because they just want other people to believe the things they think? That's kind of how discussion works. It isn't a measure of truth to see the same line repeated at all. That's a fallacy.
      • hnfong 3y ago
        The COVID part I was replying to GGP's claim that the central bank doesn't print money. Generally QE has started since 2008. > Had it occurred to you some people repeat stuff because they just want other people to believe the things they think? Yes, that's a possibility, not a definite. Why did you think that hasn't occurred to me? I'm not the one saying "I don't know why people keep saying this." I specifically offered an explanation that involves the GGP possibly being wrong: "Does it occur to you that maybe people keep saying this because that's the truth?" Note the "maybe". It's not rhetoric. I meant what I wrote. Of course there are other explanations but I'm pretty sure their view on what central banks are wrong or at least out of date. And I explained and gave pointers. I still wrote the "maybe". Anyway, given your definite claim that people just repeat stuff because they just want other people to think the same, I guess discussion with you becomes meaningless at this point. Finally I'll just note that quoting my counter example to explain what central banks do as evidence that I got my original claims wrong isn't really a argument either way. Have a nice day.
• alephnerd 3y ago
  > The economies of scale of the software industry allows excess central bank printed money to flow predominantly towards software companies and VC backed mega startups This is not why. It's because of profit margins. The Income per Employee at Applied Materials is ~$190-200k in FY24, but was traditionally around $60-100k in the 2010s [0] The Income per Employee at Google is ~$390-428K in FY24. In the 2010s it was around $200-350k. [1] Both AMAT and GOOG are blue chips in their categories, yet a software driven company like GOOG has more money to spread to employees simply because the margins are much higher than in Hardware companies. A company like AMAT needs to invest massively in lab space, commodities, manufacturing space, real estate, and machinery, which takes a massive dent out of your margins. Most spending in tech on the other hand can go directly to employees and marketing, as the only major cost outlay is compute, which itself is increasingly being offloaded to cloud providers at companies this size because F1000s can get sweetheart deals with competitive pricing (cheaper than DCs) because they are strategic enough accounts. The only Hardware companies that can succeed in this kind of market tend to be Taiwanese, Korean, and Japanese because the conversion rates are EXTREMELY competitive. A company like TSMC, TEL, Canon, etc can earn in dollars but pay Asian market rate salaries in Yen/NTD/Won. With salaries at those companies being around $40-70k in Taiwan/SK/Japan, this means you are able to almost double your net income simply by having lower employee salaries. On top of that, all those Japanese, Korean, and Taiwanese companies got govt support and backing, which wasn't vogue in the US until recently. Btw, the low salaries in TW/SK/JP were a major reason engineers from there defected to PRC companies, who gladly payed US market rate salaries with 0% income tax, given mansions, companies cars, etc. Also, VC doesn't invest in public markets - that's an Investment Banking function. VC only prioritizes Software and Pharmaceticals because of the profit margins issue above. Now that the CHIPS act was passed, over the next few years we'll see better health for the Hardware industry within the US because now they have support that is comparable to what the Pharma industry (a similarly expensive industry from a cost outlay perspective) gets. [0] - https://csimarket.com/stocks/AMAT-Income-per-Employee.html https://csimarket.com/stocks/AMAT-Income-per-Employee.html [1] - https://csimarket.com/stocks/GOOG-Income-per-Employee.html https://csimarket.com/stocks/GOOG-Income-per-Employee.html
  • deleted 3y ago
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