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We're not in a salary bubble. If anything, it's the opposite. I've analyzed the hell out of this "salary bubble" issue (or non-issue, because there is no such

We're not in a salary bubble. If anything, it's the opposite. I've analyzed the hell out of this "salary bubble" issue (or non-issue, because there is no such thing) at length. http://michaelochurch.wordpress.com/2014/05/24/whats-a-mid-career-software-engineer-actually-worth-try-779000-per-year-as-a-lower-bound/ http://michaelochurch.wordpress.com/2014/05/24/whats-a-mid-c... http://michaelochurch.wordpress.com/2013/11/03/software-engineer-salaries-arent-inflated-at-least-not-for-the-99/ http://michaelochurch.wordpress.com/2013/11/03/software-engi...

FD3SA 12y ago
This man speaks the truth. Michael has elucidated the the nature of employee/employer relations in tech with surgical precision. Highly recommended. Particularly, this article [1] about the perceived status of engineers vs. managers solidified my suspicions about the status hierarchies inherent to the industry. 1. http://michaelochurch.wordpress.com/2014/07/13/how-the-other-half-works-an-adventure-in-the-low-status-of-software-engineers/ http://michaelochurch.wordpress.com/2014/07/13/how-the-other...
nostrademons 12y ago
Your first article is based on faulty economics. When productivity increases are shared across an industry, nobody in the industry benefits. Instead, the benefits accrue to the customers and complements of the industry. There's a long historical precedent for that - productivity improvements in textile manufacturing destroyed the textile industry, productivity improvements in farming destroyed the small farmer, productivity improvements in fishing destroyed the individual fisherman. Applied to software, the reason engineers aren't capturing most of that value is because all engineers are getting more productive. The benefit is accruing instead to those who employ engineers and those who use & purchase software. The exceptions are those fields where there are still significant barriers to entry and effective techniques are not widespread - isn't this why you want to become a data scientist? I might buy that we're not in a salary bubble, but not for the reasons you propose. Rather, I'd say that the existence of a thriving market for startup founders is a market inefficiency. When engineers top out at $200K at a corporate job (and they don't always...I know some engineers with multi-million-$ stock grants) but can quit their job and instantly get millions in seed funding, that indicates that salaries should rise and seed funding availability should fall to bring those options back to equilibrium.
- michaelochurch 12y ago
  Your first article is based on faulty economics. No. I'm not saying that software engineers should earn $700,000+ or that any reasonable economic model would have them at that level-- because never in the history of economics has one's labor being worth something to the employer been, alone, enough to justify floating it to that rate. I'm only saying that their value to the businesses that employ them is at least that high. Applied to software, the reason engineers aren't capturing most of that value is because all engineers are getting more productive. The benefit is accruing instead to those who employ engineers and those who use & purchase software. Then it seems like software engineers should unionize or professionalize. If there's no other way for them to get even a small fraction of their value to the business, then collective action is the best approach.
  - nostrademons 12y ago
    I doubt a union would get much traction as long as the software industry is in as much flux as it is in, and boundaries between engineers, entrepreneurs, and financiers are as porous as they are. It's not uncommon for someone to be an engineer for a few years, a technical cofounder for a few more years, and then a venture capitalist later on. Many, many people in tech (Andreesen, PG, John Doerr, Eugene Kleiner, Bill Joy) have sat in all 3 seats.
    - sawthat 12y ago
      Actually it's incredibly uncommon. There are hundreds of thousands of engineers, far fewer "technical cofounders" and even fewer venture capitalists.
- sheepmullet 12y ago
  "productivity improvements in farming destroyed the small farmer" Because the productivity improvements required large amounts of capital in the form of land and equipment. In most of the software world capital is not anywhere near as important as it is in other industries. The main input is labor. I wonder what would have happened in the farming industry if land and equipment was free. I suspect the split of profits between employees and employers would be a lot more even.

FD3SA 12y ago

This man speaks the truth. Michael has elucidated the the nature of employee/employer relations in tech with surgical precision. Highly recommended. Particularly, this article [1] about the perceived status of engineers vs. managers solidified my suspicions about the status hierarchies inherent to the industry. 1. http://michaelochurch.wordpress.com/2014/07/13/how-the-other-half-works-an-adventure-in-the-low-status-of-software-engineers/ http://michaelochurch.wordpress.com/2014/07/13/how-the-other...

nostrademons 12y ago

Your first article is based on faulty economics. When productivity increases are shared across an industry, nobody in the industry benefits. Instead, the benefits accrue to the customers and complements of the industry. There's a long historical precedent for that - productivity improvements in textile manufacturing destroyed the textile industry, productivity improvements in farming destroyed the small farmer, productivity improvements in fishing destroyed the individual fisherman. Applied to software, the reason engineers aren't capturing most of that value is because all engineers are getting more productive. The benefit is accruing instead to those who employ engineers and those who use & purchase software. The exceptions are those fields where there are still significant barriers to entry and effective techniques are not widespread - isn't this why you want to become a data scientist? I might buy that we're not in a salary bubble, but not for the reasons you propose. Rather, I'd say that the existence of a thriving market for startup founders is a market inefficiency. When engineers top out at $200K at a corporate job (and they don't always...I know some engineers with multi-million-$ stock grants) but can quit their job and instantly get millions in seed funding, that indicates that salaries should rise and seed funding availability should fall to bring those options back to equilibrium.

michaelochurch 12y ago
Your first article is based on faulty economics. No. I'm not saying that software engineers should earn $700,000+ or that any reasonable economic model would have them at that level-- because never in the history of economics has one's labor being worth something to the employer been, alone, enough to justify floating it to that rate. I'm only saying that their value to the businesses that employ them is at least that high. Applied to software, the reason engineers aren't capturing most of that value is because all engineers are getting more productive. The benefit is accruing instead to those who employ engineers and those who use & purchase software. Then it seems like software engineers should unionize or professionalize. If there's no other way for them to get even a small fraction of their value to the business, then collective action is the best approach.
- nostrademons 12y ago
  I doubt a union would get much traction as long as the software industry is in as much flux as it is in, and boundaries between engineers, entrepreneurs, and financiers are as porous as they are. It's not uncommon for someone to be an engineer for a few years, a technical cofounder for a few more years, and then a venture capitalist later on. Many, many people in tech (Andreesen, PG, John Doerr, Eugene Kleiner, Bill Joy) have sat in all 3 seats.
  - sawthat 12y ago
    Actually it's incredibly uncommon. There are hundreds of thousands of engineers, far fewer "technical cofounders" and even fewer venture capitalists.
sheepmullet 12y ago
"productivity improvements in farming destroyed the small farmer" Because the productivity improvements required large amounts of capital in the form of land and equipment. In most of the software world capital is not anywhere near as important as it is in other industries. The main input is labor. I wonder what would have happened in the farming industry if land and equipment was free. I suspect the split of profits between employees and employers would be a lot more even.