Ask HN: Tech Salaries and Wealth Inequality

https://news.ycombinator.com/item?id=30849486

by mindboggled • 4 years ago

36 62 4 years ago

news.ycombinator.com

Over the past few months, I've been hearing of the larger tech companies paying non-senior engineers (e.g., E4/L4/SDE2) over $300K per year and senior engineers (e.g., E5/L5/SDE3) over $400K per year.

Meanwhile, these same companies are still paying front-line workers barely more than minimum wage.

Do you think this sort of wealth inequality is sustainable for society?

mooreds2• 4 years ago

I'd be more worried about the 0.01% and wealth accumulation.

This book influenced my thinking about that: https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...

BirdieNZ• 4 years ago

Have you seen Rognlie's addition to that book? https://www.brookings.edu/bpea-articles/deciphering-the-fall...

It pairs nicely with Henry George's understanding of land, capital, and labour.

mooreds2• 4 years ago

I have not, thanks for sharing that!

weezin• 4 years ago

The percentage of people making that amount of money is still pretty low. I'm more worried about what happens when those people making 300-400k a year automate those jobs. As far as sustainability, cost of living will be consistent with the middle class.

tannedNerd• 4 years ago

What companies are you hearing offering 300k for non senior?

grp000• 4 years ago

Maybe he means TC? I know meta does or did pay that before the stock dip at least.

pxx2• 4 years ago

https://www.levels.fyi/leaderboard/Software-Engineer/Softwar...

skybrian• 4 years ago

That link is members-only.

avgDev• 4 years ago

I'm considering the big tech companies, after working for a small non-tech. Meta mid-level can expect to make around $260k+ total compensation.

Ancalagon• 4 years ago

Depends where. My mid level friend working at FB was making 300-350k when he started in _2019_. What everyone is also missing in these levels of pay are typically only obtainable at those top tier companies, and often with very specific geographic constraints centered around: Seattle, NYC, or the Bay Area.

car_analogy• 4 years ago

Do you think if the engineers took lower salaries, that money would go to front-line workers instead?

avidiax• 4 years ago

You are worried about income inequality, which is hardly the same thing. Tech workers generally don't have discrete business or political goals that they use their money to influence to their advantage, even if they do have some low millions to low 10's of millions of nominal wealth.

What is more unsustainable, IMO, is the concentration of work. 3 out of 10 men and 4 out of 10 women over 20 year's age in the US are not working. Working far in excess of 40 hours per week is common. US vacation is still generally a paltry 2 weeks, non-mandatory.

And all this, despite continual improvements in productivity over the past century.

Couldn't we collectively reduce our working hours, have more vacation time, and employ more people? That would more fairly disperse the productivity gains of technology and improve many people's lives.

https://www.bls.gov/news.release/empsit.t01.htm

throwaway27727• 4 years ago

Is the reason for high unemployment due to people who want jobs but can't get them?

_carbyau_• 4 years ago

I think a two pronged approach:

1. 4 day work week to address your concerns.

But a 4 day work week will mean some business will go to a 4 day shift and a 3 day shift. And of course, some people will do two jobs so they can out compete their neighbouring Jones... so a 4 day week with some kind of enforcement?!? Not sure how that'd work.

2. Employee equity in the business. If an investor gets a dividend, so do the employees. This helps balance everyone vs the 1%'ers. Of course, there's a lot of details in that too like everything in life.

BeFlatXIII• 4 years ago

Couldn't we collectively reduce our working hours, have more vacation time, and employ more people?

Step 1 for that to ever be realistic is to sever the connection between your employer and your health insurer.

An additional complication is that employing two part-time employees means you needed to train and hope the knowledge actually transferred twice, but that is trivial in comparison to paying the benefits for two employees (IIRC, benefits are more of a fixed per-employee cost rather than something that pretends to be related to hours worked, like salary).

hackerfromthefu• 4 years ago

I agree in an egalitarian sense.

The thing is mostly those people not working are not productive people generally.

Whether it's through lack of relevant skills, or lack of volition and opportunity, or drugs, or inter-generational welfare, or whatever.

The reality is some people take and take and don't create. It's cheaper to pay someone capable and motivated a programming salary than try to get those people to be productive, otherwise human resource markets would have used those people already.

nknealk• 4 years ago

While you’re focused on labor, equity is a stronger driver of wealth inequality than labor wages. Yes, there are engineers clearing half a million dollars a year. That’s nothing compared to how the movement in equity prices affect wealth. For example, Microsoft’s CEO was given 2.5M in base salary vs 33M in stock [1]. A 10% movement in the price of Microsoft stock dwarfs his base salary. In the past 5 years, Microsoft is up over 300%. It’s owner’s equity, not salary, that drives inequality. Many front line workers don’t even quality for equity grants.

[1] https://www.geekwire.com/2021/report-card-microsofts-board-b...

bspear• 4 years ago

Agreed! Greatest driver of inequality is not salary but equity. If more employees (including frontline) got some equity, even if it was a tiny %, could make a huge difference to their lives.

Particularly true at early-stage startups: https://topstartups.io/startup-salary-equity-database/

Elyra• 4 years ago

Yep, and also just want to add that the engineers making ~400k are paying around ~150k in taxes, probably have a PhD so they didn't even earn much of anything and lived off of instant ramen packs until they were 30, with over 100k in debt. This is the boat I'm in, and unless I get lucky and get one of these jobs when I graduate, I probably won't be able to afford having kids until I'm 40, while my buddies who started working right away already have a house and a kid or two. We're all part of the same working class, and the ones with equity love to see us squabble over what is pennies to them. You also don't pay as much tax on capital gains as salary.

bradlys5• 4 years ago

Not to rain on your parade here but I’d say while your story is common enough - it’s not most people’s situation.

I graduated with a BS at 23 and was making that ~400k/yr by 30. (Even 1,000,000+/yr before that actually - equity grants are beautiful until they crash…) Now because I’m a dipshit who held onto all the stocks rather than sold - I actually have only ever really lived off of a much more meager salary and most of my equity has vaporized…

But if I had sold… If I had… :’(

Again - I’m an unexceptional case. Like super boring. First generation college student. Grew up poor-ish. Rural American. Yadda yadda but made it quite well if you ignore my equity constantly getting destroyed by interest rate hikes and what not.

crate_barre• 4 years ago

Taxes are kind of understated. Even if you take an average tech salary in a major city, taxes and rent just eat a large portion of it. Then it takes a deliberate attempt to not spend what’s left to make any forward progress towards a mortgage for example.

If you spend casually on what’s left, you are essentially working to live.

Rastonbury• 4 years ago

"Don't look at me, look at the CEOs!"

all_factz4• 4 years ago

“Gosh just be nicer to the CEOs!”

f0e4c2f7• 4 years ago

Wealth inequality is indeed unsustainable. You can see some of the output of that manifesting today.

In the short term basic income and better social safety nets are a stop gap.

In the medium term we can invest so much more in humans on planet earth. Just about anyone can learn to code. People still gatekeep it and say it's only for a special few. People used to say that about reading too. What coding even means gets simpler and simpler all the time. Some people argue excel is coding.

So we teach people to make anything and encourage way more startups, research, art, and culture (each wealth in their own way).

suyash• 4 years ago

Lol if you're worried about that, now compare the C-Suite Exec salary to the average worker salary at large tech companies.

refurb6• 4 years ago

Pretty entertaining to read all the handwaving why "we're not the rich ones, it's those other guys" all the while making top 1 percentile incomes.

Like the old saying goes "An alcoholic is someone who has one more drink than I do".

3a2d292• 4 years ago

This idea that engineers all make 300k is laughable. Maybe some people on here make that much, but I certainly don't.

Not to mention 40k a year puts you in the top 1 percent of salaries worldwide...so unless you make less than that, you are also a top 1 percentile income maker.

bradlys5• 4 years ago

Yet most workers I know advocate for better quality of life for everyone. I don’t see capitalists doing that.

End of the day - these “highly” paid workers are… workers. They’re not capitalists like their CEOs are.

dasil003• 4 years ago

It's interesting to frame this in isolation as one group of workers against another versus looking at the larger market power and wealth accumulation dynamics that have driven us in this direction. I agree with the sentiment about sustainability, but don't think the framing points us in the right direction.

To make this concrete, I am less concerned about how much AWS pays its SWEs than I am about their market dominance making it so a huge number of workers who could have worked in a more humane business have no other choice because the competition has been crushed. Cutting SWE pay and redistributing to warehouse workers would result in 1) SWEs leaving and going to one of the many companies that continue to pay more for their rare skills and 2) a relatively small raise when distributed across warehouse workers, which would be eroded away by the bean counters over time since there is no employer competition left.

user_named• 4 years ago

Blaming the well-paid employees for what the others are getting paid isn't the way to go.

Kye• 4 years ago

Did we read different OPs? I see comparison, not blame.

crmrc114• 4 years ago

It takes me more than 120days to staff a mid level software engineering position in my field. When I worked in manufacturing I could hire a darn good welder with NDT experience in 30days. I could staff with a temp who could read and follow weld and grind details on a print in less than 72 hours.

Market scarcity increases the value of a commodity.

21723• 4 years ago

First off, you're talking about income, not wealth.

Secondly, what the kids are calling "TeeCee" is an optimistic projection. A lot of people get randomly PIP-raped in the first year and aren't going to see that bonus or the equity. All it takes is for some scumbag in your management chain to knife you, and you're gonna miss out on a serious chunk of that TC.

Thirdly, private-sector SWE is a 10-year career at most. The insane time tracking, atrocious management, and abysmal code quality tend to drive people out, and even if they don't, the ageism is severe. You'll either pushed into political malevolency (that is, management, the job of enforcing the will of a bourgeoisie that should have been forcibly overthrown a generation or two ago) or unceremoniously kicked out.

Fourth, the numbers you're talking about aren't even that high. You can't even buy a house in the Bay Area on that kind of salary. Most of the truly high-paying jobs go to political manipulators and backstabbing social climbers, just as been the case for centuries before. The future never came--human society is the same shitpile it has always been, due to the world being run by a class of uncultured thugs.

All that said, you shouldn't feel guilty if you're in the position to get one of the few middle-class jobs that still exists. Make sure though that it's a real tech job (an R&D job where you're trusted to pick and choose projects, and can publish papers if that's what you're into) and not some Jira jockey nonsense that will cause your career to stagnate.

logicalmonster• 4 years ago

My 2 cents.

The main issue to be concerned about, that’s repeatedly and deliberately ignored IMO, is the workers’ actual buying power. Wage disparity doesn’t really matter: Kevin Durant or Elon Musk will always make probably 10,000 times in a year than I do, yet I live great. Our wage disparity isn’t a concern to me: they currently provide more value to the world than I do, and their paychecks reflect that.

The real issue is buying power. It doesn’t matter if the minimum wage is increased to 15 or 25 or even 100 an hour if that buys increasingly less. There’s little way to save and hide your money if inflation continuously robs you and harms the poor more than the rich, who have the ability to hedge against inflation.

Inflation is a stealth tax on the poor. People who live on the margins are screwed by their purchasing power being drained. We live in a time of very high inflation and the same old solutions demanded of “better pay” or more taxes on the rich are not a systemic solve.

The real transfer of wealth, and the real class-disparity has always been things related to inflation. Go back and look at old prices of houses, milk, candy, burgers, etc. Yes, people made less salary of course, but could easily afford a good life. Wages never keep pace with inflation.

A real systemic solve is addressing the things surrounding money that nobody talks about or dismisses IMO.

PS: that wasn’t my 2 cents. That was my 9 cents. In the time it took you to read this inflation increased the price. Maybe if you think about how that works in relation to purchasing power you’ll start to see the bigger issue.

sumedh• 4 years ago

they currently provide more value to the world than I do

but they still need tax payer money to fund their business, atleast for Elon, no idea who Kevin is.

expoorimmigrant2• 4 years ago

What prevents the front-line workers to get a software engineering jobs? I know that not everyone should code, but for those who have the opportunity and intelligence for it and liking it, should.

SWE jobs are now favored among immigrants (poor and wealthy), because this is their only chance to make a dent in US living expenses. I am one of the poor immigrant (yes I know how it feels working $7.5/hr scrubbing a restaurant that just closed by the health department using bleach while kneeling all day), now having $300k TC, and my entire family are either divorced or single, and all female. I could send money to them in my home country and still have more than enough for me here. I definitely won't want to get paid lower.

weq• 4 years ago

Ive often attempted to convince said frontline workers who i am friends with/know to pursue IT jobs because (if u understand IT) they are low effort, high reward.

expoorimmigrant2• 4 years ago

Yeah definitely, who knows, it might change their life.

lhorie• 4 years ago

Why wouldn't it be sustainable? Well-paid professions/roles have existed since forever. Income and wealth inequality have both existed since forever. We're talking all the way back to antiquity. Within what sort of timeframe would you consider something to be unsustainable?

giantg2• 4 years ago

FYI, median software dev pay is $110k. Those high levels of compensation are uncommon. Most of the wealth inequality that is talked about deals with the 1% who will make more in capital gains or interest each year than those $400k devs.

That's not to say that support/facilities roles should be paid as low as they are. But the high pay is not as common as is represented. For example, I have 10 years experience, a MS, but make under $100k.

3a2d292• 4 years ago

This is a big one.

SWE salaries are good, but people throw around 300k like some average 24 year old is making that easily.

I'm 26 and have set to meet that median salary. These hyped salaries are more like a gold rush like NFTs where everyone acts like its just all free money.

MauroIksem• 4 years ago

I'm in the same boat. I have yet to meet one of these developers who make 400k.

enigmatic02• 4 years ago

No company is incentivized to do what's sustainable for society

softwarebeware3• 4 years ago

This is a little more nuanced. A lot of that pay is in risky stock that may or may not turn out to be worthless when it vests. It’s also a very limited number of engineers in the grand scheme.

refurb6• 4 years ago

Selection bias. Making millions in a start-up looks unfair if you ignore all the failures where people walk away with nothing.

kar5pt• 4 years ago

I dont think FAANG stock is that risky. And the fact that it's just a limited number of people making these wages emphasizes that it's a wealth inequality problem. I'm not sure how that would be a counteargument.

softwarebeware3• 4 years ago

I dont think FAANG stock is that risky.

Look at Facebook's stock (FB symbol) the past year. Between February 2nd and 3rd of this year it fell from $323 to $237.76.

And the fact that it's just a limited number of people making these wages emphasizes that it's a wealth inequality problem. I'm not sure how that would be a counteargument.

I think it _is_ a counterargument because a comparison between average software engineer pay and average frontline worker pay probably looks like you'd expect as far as market forces are concerned.

It's only when you move on from averages and start to focus on outliers where it looks like "problem." I would definitely consider FAANG engineers who make $300,000+ per year outliers.

lazyeye• 4 years ago

I think this is the primary reason why big tech likes to grandstand on woke issues. They get to be the "good guys" at virtually no cost and it's proven to be an incredibly effective distraction/misdirection from the real injustices/inequality of the sort described here.

bradlys5• 4 years ago

High income != wealth inequality.

Wish you understood that. Wish everyone understood that.

eurasiantiger• 4 years ago

Excessive income vs. inadequate income == wealth inequality.

goldname• 4 years ago

Yes. The more you close the gap, the less I will work.

Ask HN: Tech Salaries and Wealth Inequality

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