5 ms·

Engineers are seriously underpaid in todays economy. From a business perspective, quality engineers are dirt cheap (relative to the value they create) so there'

Engineers are seriously underpaid in todays economy. From a business perspective, quality engineers are dirt cheap (relative to the value they create) so there's no reason not to hire as many as you can as long as you have can keep the project pipeline full. A few months ago I read that the average google engineer creates something like $50k/month in value for the company. He might get paid $150k/year if he's lucky, that's insane.

natrius 13y ago
A Google engineer might generate $50k/month in value, but she is unlikely to generate as much value as a non-Google engineer. Competitive labor markets generally don't see such ~75% profit margins across the board. Either anti-competitive practices are pervasive, or Google is uniquely profitable. Most of the evidence points to the latter explanation. If engineers are underpaid, start a company, pay engineers more to lure them away from Google, and enjoy your "paltry" ~50% profit margins.
- Aloisius 13y ago
  Google's profit margin is actually around 21-24% (depending on who calculates it)
  - natrius 13y ago
    I merely calculated the margin on $50k/month at $150k/year for the sake of argument. If Google engineers are underpaid, someone should be able to pay them more in exchange for a slightly lower profit margin. I don't think this is the case.
- CleanedStar 13y ago
  Engineers are underpaid. It is obvious to all of us in this respect. I'm not going to get paid $120k a year, unless my being there is generating $130k, or $140k, or more for the company. They're not hiring me to lose money. This is obvious. As to your theoretical example of starting a company, here is where that falls apart logically. Several hundred families own trillions in capital. They make 20% a year profit on each engineer they employ. Say I own $50 million. I am a nice guy, so I only make 15% a year profit off each engineer, and give the engineers the other 5%. Several things arise from this. For one, the dozens of people I employ are only a drop in the bucket to everyone else. So the dent in the whole economy is negligible. More importantly, my already relatively small pile of money is growing slower than everyone else's. Compound returns and all that. Now they get even more economies of scale. I can't even maintain my small niche, my small piece of the economy becomes ever smaller over time. I don't want to go into every detail of your messages...anti-competitive? Look into the documents on the anti-poaching case which has hit Apple, Google, Intel etc. Also, there's a well known way for companies to make excessive profits - monopoly. Something the government is currently investigating in the case of Google.
Aloisius 13y ago
Revenue per employee is a measure used to compare the labor efficiency of two companies in the same industry not as a way to judge how much revenue hiring a new employee will add to your bottom line. Most engineers at Google almost certainly do not drive $50K/month in revenue for the company given that Google properties generate a hugely non-uniform distribution of revenue. While the guys working on say Android or Gmail for instance might be helping Google's brand, they are a very small part of their bottom line (at least now).

natrius 13y ago

A Google engineer might generate $50k/month in value, but she is unlikely to generate as much value as a non-Google engineer. Competitive labor markets generally don't see such ~75% profit margins across the board. Either anti-competitive practices are pervasive, or Google is uniquely profitable. Most of the evidence points to the latter explanation. If engineers are underpaid, start a company, pay engineers more to lure them away from Google, and enjoy your "paltry" ~50% profit margins.

Aloisius 13y ago
Google's profit margin is actually around 21-24% (depending on who calculates it)
- natrius 13y ago
  I merely calculated the margin on $50k/month at $150k/year for the sake of argument. If Google engineers are underpaid, someone should be able to pay them more in exchange for a slightly lower profit margin. I don't think this is the case.
CleanedStar 13y ago
Engineers are underpaid. It is obvious to all of us in this respect. I'm not going to get paid $120k a year, unless my being there is generating $130k, or $140k, or more for the company. They're not hiring me to lose money. This is obvious. As to your theoretical example of starting a company, here is where that falls apart logically. Several hundred families own trillions in capital. They make 20% a year profit on each engineer they employ. Say I own $50 million. I am a nice guy, so I only make 15% a year profit off each engineer, and give the engineers the other 5%. Several things arise from this. For one, the dozens of people I employ are only a drop in the bucket to everyone else. So the dent in the whole economy is negligible. More importantly, my already relatively small pile of money is growing slower than everyone else's. Compound returns and all that. Now they get even more economies of scale. I can't even maintain my small niche, my small piece of the economy becomes ever smaller over time. I don't want to go into every detail of your messages...anti-competitive? Look into the documents on the anti-poaching case which has hit Apple, Google, Intel etc. Also, there's a well known way for companies to make excessive profits - monopoly. Something the government is currently investigating in the case of Google.

Aloisius 13y ago

Revenue per employee is a measure used to compare the labor efficiency of two companies in the same industry not as a way to judge how much revenue hiring a new employee will add to your bottom line. Most engineers at Google almost certainly do not drive $50K/month in revenue for the company given that Google properties generate a hugely non-uniform distribution of revenue. While the guys working on say Android or Gmail for instance might be helping Google's brand, they are a very small part of their bottom line (at least now).