5 ms·

Even within tech companies, the wage gap is the biggest I've ever seen. I've never worked anywhere that entry level employees (or contractors/vendors) could be

Even within tech companies, the wage gap is the biggest I've ever seen. I've never worked anywhere that entry level employees (or contractors/vendors) could be making 50-75k/yr, entry level FTEs could be making 90-150k, and more senior staff could easily be making 500K up to several million per year. That's just ridiculous.

whimsicalism 2y ago
plenty of legacy companies are similar with slightly lower entry level bands
throwaway9980 2y ago
This sounds in line with big law and big finance. Those are exactly the type of people who have flooded into tech over the last decade. It shouldn’t be surprising that compensation structures mirror those industries.
- beaeglebeachedd 2y ago
  After decades in industry it becomes obvious some people really generate 5x+ of a new hire. Not sure why they shouldn't be able to capture that wealth when the market bears it. I don't make nearly 500k but I'm happy for most anyone that does.
  - conductr 2y ago
    Is it not more about specialization and deep domain experience than raw output? If I just need raw output, the army of juniors is a viable solution. You might even find it’s preferable if you have many separate functions or projects or think you may flex down/up the labor expense later on.
    - simonw 2y ago
      In software development it's not uncommon to have a staff engineer who outproduces juniors in terms of raw output by a 5x factor.
      - conductr 2y ago
        With similar work that should be expected. It would be the same with cabinet making as well. But in cabinet making, they’d hire 5 juniors if it was less than a single experienced person. The experienced guy has a job because sometimes a project requires complex and fast solutions, even if pace is reduced by the complexity.
  - dventimi 2y ago
    As someone who isn't in law, medicine, or finance but must from time to time pay for legal services, medical care, and financial advice, I'm not happy there are lawyers, finance people, and doctors who make $500k. I'm doubly not happy when I have to compete with those people for housing and other goods and services.
    - srhtftw 2y ago
      Indeed. The bay area was a better place before google compensation priced everyone else out of it.
      - dventimi 2y ago
        Testify
  - throwaway14356 2y ago
    Of course, even 10x is possible. We all wish that was always the case. I had this hilarious though I feel I should write down here but doubt it at the same time. .. The best way to have a wage gap is lack of access to education or even books. Second would be to have access but not make an effort. It makes me wonder is there is data on physical punishment. people say it is a terrible thing but I would love to put them in some loud factory conveyor belt job for a decade or so with just a few more bills than salary. To call me a sadist is to agree :p
supplied_demand 2y ago
I think a lot of this is explained by the crazy gross margins we see from tech companies. Typically, the more software-focused the company the higher the gross margins. The higher the margins, the more you can pay workers. Apple's gross margin is 46% (lots of hardware), Google's is 58%, and Meta's is 83%. Meanwhile, Ford's gross margin is 8.4% and Walmart's is 25%.
- dventimi 2y ago
  I don't know about that. If a tech company categorizes its software engineers as R&D, my understanding (which could be flawed) is that typically would be CapEx but not COGS. In that case, high engineering salaries wouldn't be reflected there. That would help resolve the puzzle when tech companies have a high gross margin but a low or negative net margin, as many Bay Area unicorns did, for example.
  - xtiansimon 2y ago
    I work in small businesses accounting (not an accountant), so take my view with a grain of salt. But labor is its own category, separate from COGS. Contractors show up as indirect expense. I’ve never heard of any kind of worker or contractor in Capital Expenses/Balance Sheet. That’s wild. Generally Accepted Accounting Principles don’t let you put t labor wherever you choose to ‘categorize’ them. But you can pay consultants and buy services from “third-parties”, which moves the expense, as I described, from payroll to indirect expenses. This falls into that funny gray area for contractors—looks like a duck…
    - dventimi 2y ago
      As I said, I could be mistaken and I'm willing to defer to your expertise. What I'm trying to understand is this. Is it possible for a company--say a tech unicorn--to have a high gross margin and a low COGS, and yet pay some of its employees--maybe engineers in R&D--astronomical compensation that somehow isn't reflected in the gross margin and/or COGS? While we're at it, is it further possible for such a company to have a high gross profit margin and yet fail to make a profit? I ask because I'm trying to square the claim about the high gross margins and I guess efficiency of San Francisco tech companies, with reports in the popular press about tech unicorns like Twitter and Pinterest losing money quarter after quarter.
m463 2y ago
could this just be stock? people get a salary + a percentage of their salary in stock If the stock is going up non-linearly, wouldn't earnings be skewed. Especially new people compared to people vesting stuff from a couple years back. or are people getting salaries of 500k irrespective of stock? are they matching salaries to stock of other companies?
banish-m4 2y ago
De rigueur at Meta and Google. Salary negotiation consultants are a thing.
tmpz22 2y ago
> senior staff could easily be making 500K Can we please stop connecting the words easy and $500k without also discussing the difficulties and lifestyle trade-offs obtaining L6 and equivalent positions at Google and other companies? Jesus Christ its like an entire generation of basic education went out the window when Blind was launched.

whimsicalism 2y ago

plenty of legacy companies are similar with slightly lower entry level bands

throwaway9980 2y ago

This sounds in line with big law and big finance. Those are exactly the type of people who have flooded into tech over the last decade. It shouldn’t be surprising that compensation structures mirror those industries.

beaeglebeachedd 2y ago
After decades in industry it becomes obvious some people really generate 5x+ of a new hire. Not sure why they shouldn't be able to capture that wealth when the market bears it. I don't make nearly 500k but I'm happy for most anyone that does.
- conductr 2y ago
  Is it not more about specialization and deep domain experience than raw output? If I just need raw output, the army of juniors is a viable solution. You might even find it’s preferable if you have many separate functions or projects or think you may flex down/up the labor expense later on.
  - simonw 2y ago
    In software development it's not uncommon to have a staff engineer who outproduces juniors in terms of raw output by a 5x factor.
    - conductr 2y ago
      With similar work that should be expected. It would be the same with cabinet making as well. But in cabinet making, they’d hire 5 juniors if it was less than a single experienced person. The experienced guy has a job because sometimes a project requires complex and fast solutions, even if pace is reduced by the complexity.
- dventimi 2y ago
  As someone who isn't in law, medicine, or finance but must from time to time pay for legal services, medical care, and financial advice, I'm not happy there are lawyers, finance people, and doctors who make $500k. I'm doubly not happy when I have to compete with those people for housing and other goods and services.
  - srhtftw 2y ago
    Indeed. The bay area was a better place before google compensation priced everyone else out of it.
    - dventimi 2y ago
      Testify
- throwaway14356 2y ago
  Of course, even 10x is possible. We all wish that was always the case. I had this hilarious though I feel I should write down here but doubt it at the same time. .. The best way to have a wage gap is lack of access to education or even books. Second would be to have access but not make an effort. It makes me wonder is there is data on physical punishment. people say it is a terrible thing but I would love to put them in some loud factory conveyor belt job for a decade or so with just a few more bills than salary. To call me a sadist is to agree :p

supplied_demand 2y ago

I think a lot of this is explained by the crazy gross margins we see from tech companies. Typically, the more software-focused the company the higher the gross margins. The higher the margins, the more you can pay workers. Apple's gross margin is 46% (lots of hardware), Google's is 58%, and Meta's is 83%. Meanwhile, Ford's gross margin is 8.4% and Walmart's is 25%.

dventimi 2y ago
I don't know about that. If a tech company categorizes its software engineers as R&D, my understanding (which could be flawed) is that typically would be CapEx but not COGS. In that case, high engineering salaries wouldn't be reflected there. That would help resolve the puzzle when tech companies have a high gross margin but a low or negative net margin, as many Bay Area unicorns did, for example.
- xtiansimon 2y ago
  I work in small businesses accounting (not an accountant), so take my view with a grain of salt. But labor is its own category, separate from COGS. Contractors show up as indirect expense. I’ve never heard of any kind of worker or contractor in Capital Expenses/Balance Sheet. That’s wild. Generally Accepted Accounting Principles don’t let you put t labor wherever you choose to ‘categorize’ them. But you can pay consultants and buy services from “third-parties”, which moves the expense, as I described, from payroll to indirect expenses. This falls into that funny gray area for contractors—looks like a duck…
  - dventimi 2y ago
    As I said, I could be mistaken and I'm willing to defer to your expertise. What I'm trying to understand is this. Is it possible for a company--say a tech unicorn--to have a high gross margin and a low COGS, and yet pay some of its employees--maybe engineers in R&D--astronomical compensation that somehow isn't reflected in the gross margin and/or COGS? While we're at it, is it further possible for such a company to have a high gross profit margin and yet fail to make a profit? I ask because I'm trying to square the claim about the high gross margins and I guess efficiency of San Francisco tech companies, with reports in the popular press about tech unicorns like Twitter and Pinterest losing money quarter after quarter.

m463 2y ago

could this just be stock? people get a salary + a percentage of their salary in stock If the stock is going up non-linearly, wouldn't earnings be skewed. Especially new people compared to people vesting stuff from a couple years back. or are people getting salaries of 500k irrespective of stock? are they matching salaries to stock of other companies?

banish-m4 2y ago

De rigueur at Meta and Google. Salary negotiation consultants are a thing.

tmpz22 2y ago

> senior staff could easily be making 500K Can we please stop connecting the words easy and $500k without also discussing the difficulties and lifestyle trade-offs obtaining L6 and equivalent positions at Google and other companies? Jesus Christ its like an entire generation of basic education went out the window when Blind was launched.