6 ms·

This applies to the US as well, but probably not as severely since software engineers aren't as underpaid in the US. Finance pays a fair market wage, which see

This applies to the US as well, but probably not as severely since software engineers aren't as underpaid in the US. Finance pays a fair market wage, which seems high by comparison to all the unfair players out there, but isn't actually that unreasonable. Startups pay a theoretically fair wage (if you accept valuations at face-value and exclude liquidation preferences). It's when you see the equity/cap table (2% for useless VPs and 0.03% for engineers)-- as well as what the founders have done to ensure their careers no matter what happens to the business-- that you pick out the classism of the well-connected. If you look at salaries alone, though, you won't see it. Outsiders complain about finance "bonuses" (finance salaries are only at-market) while failing to account for the fact that that's a much fairer compensation system than whatever they get at their corporate jobs. Granted, the banking bonus system is horribly corrupt in practice; but in theory there is nothing wrong with it, and I'd rather have a corrupt profit-sharing system like that in finance than none at all.

tptacek 13y ago
This comment nicely captures a misconception about how employment markets work. If, stipulating the dollar value of the whole comp package, a comp package appears fair, it is still fair no matter what that company pays anyone else. Wages are "fair" or "unfair" based on prevailing rates and supply/demand.
- lawnchair_larry 13y ago
  How employment markets work, and fairness, are not the same thing. It's not a misconception, it's a criticism. And of course in the real world, wages are not based on supply and demand. They're based on leverage and BATNA. Simply put, given two equal employees (hypothetically, if it were possible to measure this), it's not "fair" to give one $50k and one $300k. It's not about the prevailing wage, it's about the contribution relative to what is coming back.
  - tptacek 13y ago
    No, the argument you're making is irrational. You're a $100k/yr FTE dev. A VP above you makes $200k/yr. You believe that VP should be making $50k/yr. But your position isn't improved at all if they do. You're still making $100k/yr, and someone else is taking the $150k/yr premium. So you say, "no, I should get a share of that $150k/yr premium." Well, OK, why aren't you? What you're saying is that you're worth more than $100k/yr. You already have a way of demonstrating that: demand a raise, then start interviewing. The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too. What other people in your firm make is an orthogonal concern to what you make. Clinging to the belief that pay equity is an important part of your compensation is as likely to harm you as help you; stipulating that we are all especially high-functioning professionals, the notion of pay equity is part of what puts a ceiling on what you earn now.
    - Anderkent 13y ago
      > The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too. The difference is in one scenario you're talking about a company that can pay out 300k a year, and in the other it's only 150k. Fairness is not about absolute numbers, but relative numbers in proportion to the total available.
      - tptacek 13y ago
        Are you doing work worth 250k a year? Why are you accepting 100k for it? Do you think every dollar generated by a company is allocated to salary? That's a company with a 0% (or worse) margin.
    - infinity0 13y ago
      This is the most anti-rational anti-worker worthless "explanation" I have ever heard. What other people make is definitely not an orthogonal concern, and is hugely relevant. Your justification of not caring about other people earning more is incredibly short-sighted. Yes, it does improve my position if other people earn less, because that money is then available for the company to use on other things, such as paying me. Furthermore, to suggest that this is "irrational" is offensive and irrational in itself, and would not be inconsistent with psychological propaganda.
- gaius 13y ago
  Then why all the hand-wringing about a "shortage" of engineering talent? Because the market cannot operate, it is suppressed by the class system.
  - tptacek 13y ago
    I am not smart enough to understand what this comment is trying to say.
    - gaius 13y ago
      Simply that in a free market, the market would clear and sellers (talent) would reach an equilibrium with buyers (employers). That cannot happen because the buyers - for ingrained, cultural reasons of reinforcing a class hierarchy - refuse to play. So the most senior engineer in an organization, no matter how much value he creates, can never be paid more than a middle or in some cases junior manager incase he gets "ideas above his station" and fails to doff his cap to his "betters". That is the #1 problem in the UK employment market, the dead weight of the entrenched management class. Only in the finance industry does the talent market operate as it should, because contrary to popular belief, that's actually the only industry in the UK where the old boys network doesn't have a stranglehold. If you're smart enough to be an engineer, you're smart enough to realize the only way to win is not to play. So you either go into finance, or leave the UK, or grit your teeth and accept that in order to do the work you enjoy, you're going to be poor compared to someone who couldn't do your job in a month of Sundays, but has the "right" connections.
      - tptacek 13y ago
        Oh, oh oh oh. You're talking about the UK (of course). I'm sorry, I misunderstood. Is the UK class system still that bad? (I'd heard horror stories but assumed they were at least somewhat overblown).
        gaius 13y ago
        Imagine Downton Abbey with beige carpets and fluorescent lighting and that's most British companies today. Except it's not blue-blooded aristos running the show, it's old boys, school ties, golf buddies, MBAs. Contrary to popular belief the old boys network isn't actually sexist: it discriminates equally against male non-members too. Same in out politics too actually. Might not be Lord-this or Lady-that running the show, but they all graduated in PPE from Oxford...
rmc 13y ago
This applies to the US as well, but probably not as severely since software engineers aren't as underpaid in the US. I presume the US wouldn't have as strong a class system as the UK. There's a bit in Mad Men, where the British character (Lane Pryce) complains to his wife that "I've been here over a year and no-one's asked me what university I went to!"

tptacek 13y ago

This comment nicely captures a misconception about how employment markets work. If, stipulating the dollar value of the whole comp package, a comp package appears fair, it is still fair no matter what that company pays anyone else. Wages are "fair" or "unfair" based on prevailing rates and supply/demand.

lawnchair_larry 13y ago
How employment markets work, and fairness, are not the same thing. It's not a misconception, it's a criticism. And of course in the real world, wages are not based on supply and demand. They're based on leverage and BATNA. Simply put, given two equal employees (hypothetically, if it were possible to measure this), it's not "fair" to give one $50k and one $300k. It's not about the prevailing wage, it's about the contribution relative to what is coming back.
- tptacek 13y ago
  No, the argument you're making is irrational. You're a $100k/yr FTE dev. A VP above you makes $200k/yr. You believe that VP should be making $50k/yr. But your position isn't improved at all if they do. You're still making $100k/yr, and someone else is taking the $150k/yr premium. So you say, "no, I should get a share of that $150k/yr premium." Well, OK, why aren't you? What you're saying is that you're worth more than $100k/yr. You already have a way of demonstrating that: demand a raise, then start interviewing. The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too. What other people in your firm make is an orthogonal concern to what you make. Clinging to the belief that pay equity is an important part of your compensation is as likely to harm you as help you; stipulating that we are all especially high-functioning professionals, the notion of pay equity is part of what puts a ceiling on what you earn now.
  - Anderkent 13y ago
    > The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too. The difference is in one scenario you're talking about a company that can pay out 300k a year, and in the other it's only 150k. Fairness is not about absolute numbers, but relative numbers in proportion to the total available.
    - tptacek 13y ago
      Are you doing work worth 250k a year? Why are you accepting 100k for it? Do you think every dollar generated by a company is allocated to salary? That's a company with a 0% (or worse) margin.
  - infinity0 13y ago
    This is the most anti-rational anti-worker worthless "explanation" I have ever heard. What other people make is definitely not an orthogonal concern, and is hugely relevant. Your justification of not caring about other people earning more is incredibly short-sighted. Yes, it does improve my position if other people earn less, because that money is then available for the company to use on other things, such as paying me. Furthermore, to suggest that this is "irrational" is offensive and irrational in itself, and would not be inconsistent with psychological propaganda.
gaius 13y ago
Then why all the hand-wringing about a "shortage" of engineering talent? Because the market cannot operate, it is suppressed by the class system.
- tptacek 13y ago
  I am not smart enough to understand what this comment is trying to say.
  - gaius 13y ago
    Simply that in a free market, the market would clear and sellers (talent) would reach an equilibrium with buyers (employers). That cannot happen because the buyers - for ingrained, cultural reasons of reinforcing a class hierarchy - refuse to play. So the most senior engineer in an organization, no matter how much value he creates, can never be paid more than a middle or in some cases junior manager incase he gets "ideas above his station" and fails to doff his cap to his "betters". That is the #1 problem in the UK employment market, the dead weight of the entrenched management class. Only in the finance industry does the talent market operate as it should, because contrary to popular belief, that's actually the only industry in the UK where the old boys network doesn't have a stranglehold. If you're smart enough to be an engineer, you're smart enough to realize the only way to win is not to play. So you either go into finance, or leave the UK, or grit your teeth and accept that in order to do the work you enjoy, you're going to be poor compared to someone who couldn't do your job in a month of Sundays, but has the "right" connections.
    - tptacek 13y ago
      Oh, oh oh oh. You're talking about the UK (of course). I'm sorry, I misunderstood. Is the UK class system still that bad? (I'd heard horror stories but assumed they were at least somewhat overblown).
      - gaius 13y ago
        Imagine Downton Abbey with beige carpets and fluorescent lighting and that's most British companies today. Except it's not blue-blooded aristos running the show, it's old boys, school ties, golf buddies, MBAs. Contrary to popular belief the old boys network isn't actually sexist: it discriminates equally against male non-members too. Same in out politics too actually. Might not be Lord-this or Lady-that running the show, but they all graduated in PPE from Oxford...

rmc 13y ago

This applies to the US as well, but probably not as severely since software engineers aren't as underpaid in the US. I presume the US wouldn't have as strong a class system as the UK. There's a bit in Mad Men, where the British character (Lane Pryce) complains to his wife that "I've been here over a year and no-one's asked me what university I went to!"