Are STEM Workers Overpaid?

http://spectrum.ieee.org/riskfactor/computing/it/are-stem-workers-overpaid

by 31reasons • 13 years ago

52 81 13 years ago

spectrum.ieee.org

A withering brilliance shows through this casually abusive headline.

I feel like this is a few steps away from some sort of revolutionary political speech. Did Greenspan really say that shit while representing the country I'm supposed to love?

kbenson2• 13 years ago

Significantly opening up immigration to skilled workers solves two problems. The companies could hire the educated workers they need. And those workers would compete with high-income people, driving more income equality.

TL;DR Income equality is being redefined as cost cutting through wage suppression. W. T. F.

If you want to define income inequality as the "problem" of different skills demanding different wage premiums based on demand, then sure... If you want to define it, as it has been in almost every report I've seen on the matter, as the widening gap between the rich and everyone else, then that doesn't help at all, it just exacerbates the problem.

STEM work is still a quick, mostly egalitarian way to allow movement from the lower to middle classes. Defining middle to upper-middle class as high-income earners might technically be accurate, especially with a shrinking middle class, but then making decisions based on them being "high-income" when it's so relatively different than it was in the past seems the exact wrong way to go about things.

sliverstorm2• 13 years ago

It's like that short story, Harrison Bergeron, where everyone has the mental inhibitors. It's much easier to drag everyone down to the same level, than lift them up to the same level.

jmspring5• 13 years ago

We need downward pressure on wages so that the executives can make more money and the corporations can profit. Clearly borders should be open to throw away any avenues to prosperity that still exist in this country still. A mix of corporate and union greed f'd up previous iterations of the middle class, clearly we should follow the same path in all cases to the benefit of the 1%. Yeah, that works.

I believe in the global economy, but I also believe that local markets have their demands and wages should be commensurate. If I were to live in San Francisco working as a full stack developer, I should expect one wage. If I was in Berlin, Stockholm, Singapore, etc. I would expect something commensurate that maintained the similar lifestyle in the community I work.

There are cultural/societal tradeoffs, but personally, I am pretty tired of the "US IT wages are too high, let's open the borders" argument. The opposite side of that argument -- corporate america promised X, but failed to deliver for aged populations, oh well...just moves along doing it's thing.

Between my age and that of my parents, there was a shift of "spend your life working for a company, you would get training to your potential, and your efforts would be reciprocated"; to today it is "fend for yourself, the contract you enter in is at will on both sides with no guarantees" with the caveat of "hopefully we are both striving for the same thing for an acceptable duration".

wildgift2• 13 years ago

How can you compare corporate greed to union greed? The best paid union workers were autoworkers and longshore workers, and the companies they worked for were still huge and profitable. So as "greedy" as these well paid workers were (and I mean "were," because autoworkers make a lot less today) they weren't greedy enough to destroy the company.

If it weren't for this so-called "greed" there wouldn't have been a middle class at all. And now that unions are shrinking to almost irrelevance, the middle class is vanishing.

The old attitude of companies holding onto workers was created by unions making demands. Now that unions are few, and in many sectors, were never present, the "fend for yourself" at-will contract is the standard.

The unions made those "good old days". The labor strife of the 20s and 30s set the conditions for the middle class of the 50s and 60s.

waps4• 13 years ago

I love how you think that the lifestyle a developer salary buys in San Francisco is available to developers in Berlin. I may not have not worked in Berlin, but I did work in Frankfurt.

On a developer salary, you cannot get a decent apartment in the middle of the popular neighborhoods in Frankfurt. Berlin is no different, nor is any other place in Europe I know of. In Frankfurt, it is true that a developer salary is comparable to what a factory worker makes. It is higher, but we're talking 20-30% higher, maybe 50% at the end of your career, no more. Something that irritated me to no end in Europe is that decision power and salary are determined mainly by seniority, number of years worked at the company, not ability and certainly not knowledge.

bayesianhorse• 13 years ago

No.

carsongross• 13 years ago

Comrades:

Either get lean, or seize the means of production.

Which, mirabile dictu, is yourself.

frozenport• 13 years ago

Gut Reaction: Do non-STEM workers do anything useful?

potatolicious• 13 years ago

You have got to be joking.

opendais2• 13 years ago

I hope that was sarcasm. ;)

'cause they do.

CmonDev2• 13 years ago

That morning coffee ain't gonna make itself.

nickthemagicman• 13 years ago

Hahaha keep telling yourself that.

WesternStar2• 13 years ago

A better question might be.Can we automate away the jobs of sales people, middle management and strategic directors? Yes, I believe we can.

kbenson2• 13 years ago

The real question; Can we automate the job of corporate officer? The cost savings would be enormous...

ethnomusicolog• 13 years ago

A lot of management time is actually spent "conspiring". But software make a lot of this trivial. (Networking, synchronising, monitoring). software indeed threaten the power foundation of current elites. Just look at the banking industry where gradually, traders, then quants , then programmer (think hft) started taking a greater share of the revenue pie away from traditionnal bankers.

opendais2• 13 years ago

They really should have picked a different title and hinted at the conclusion which was STEM workers are suffering the same wage stagnation as everyone else and the only companies with hiring problems want STEM workers on the cheap. :/

bdcravens• 13 years ago

Alan Greenspan made approximately $180,000/year as Chairman of the Fed. Perhaps Presidential-appointee salaries could be made equal to non-Presidential-appointees by opening up those positions to foreigners.

dvanduzer4• 13 years ago

I would gladly take a pay cut if we also raised the minimum wage to $30 an hour, got rid of most welfare programs and replaced them with a $10k/year minimum income, and simplified to a flat tax rate (I think Dick Armey liked 17%).

pixie_2• 13 years ago

I would take a pay cut to work only 35 hours a week.

khyryk• 13 years ago

How much do you currently work?

jcnnghm4• 13 years ago

Given that the mean wage was only $43,460 in 2009, in order to raise minimum wage to $60,000 per year, your pay cut would be to minimum wage. The government would have to confiscate all income, supplement it with printed money, then redistribute it evenly across the population. In that kind of scenario, why would anybody do anything but the absolute minimum? Isn't that largely why the Soviet Union wasn't competitive? If there was no economic incentive for hard work, I'd wager many of the presently most productive people would optimize for work minimization.

dvanduzer4• 13 years ago

That's assuming a lot of things about the present level of productivity of everyone working. Also, your number sounds like "household income" and I'm making my assumptions based on GDP per capita[0].

Generally though, yes, I'd assume most people would end up working ~20 hours a week. I'd assume most employers would prefer this, and would also optimize the use of their employees' time.

I think your understanding of Soviet economic policy is probably a bit naive, but for a high level overview of my philosophy, I'd recommend Russell's In Praise of Idleness[1].

[0] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...

[1] http://www.zpub.com/notes/idle.html

e12e• 13 years ago

Isn't that largely why the Soviet Union wasn't competitive?

The backwater pre-industrial, post-war torn nation that beat the US to space? No, I don't think that was why they couldn't compete.

As far as I recall, pay is a pretty poor motivator -- while low pay is a pretty strong "de-motivator". So if you give people interesting challenges and make sure they can meet their basic needs, people are likely to preform.

But, even if competing for exceptional wages was a great motivator, no-one is saying that you couldn't do that in such a system -- you might have to limit it to fewer "exceptional" people, and there might be a higher risk of being demoted -- but I can't see why it wouldn't be possible. I don't think it would be a good idea, however.

All that aside, a household income of 80.000 USD sounds pretty good for most of the US (never mind 120.000) ?

spamizbad• 13 years ago

If there's downward pressure on salaries in Software development, you're going to see two things that will counter-act this long-term:

1) An exodus of developers. Devs will be likely be leaving either as the result of fat getting trimmed or by transitioning into management and analysis roles that offer better career prospects.

2) Less "young blood". A big reason why everyone is pumped these days to learn to code is due to the career opportunities it provides: the great salary, the job perks, and working for companies that are perceived cool. Most aren't looking to become entrepreneurs. If software shops lose their charm and gains a reputation for long hours with mediocre pay, people will seek opportunity elsewhere.

I saw the same thing happen in the early '00s after the dotcom crash and the outsourcing craze. Startups became a punchline instead of an aspiration and everyone thought most of the world's code would be written in Bangalore. CS enrollment tanked. People lost their appetite for learning programming. But by '05 we were back into a "shortage" again after believing the first-world programmer had gone extinct.

But I'm not surprised business and political leaders think STEM workers are overpaid. The general attitude is that exceptional salaries should only be doled out to exceptional individuals - if you're just a mere mortal that's in demand, well, that's clearly just an inefficiency in the market.

short_circut• 13 years ago

Given the skill level and investment required to get a competitive STEM degree and the amount of profits a STEM person can produce for a company's long term profits I think that they are actually potentially underpaid.

darcrossito• 13 years ago

They should've written an article titled "Are Financial Analysts Overpaid?"

CmonDev2• 13 years ago

I would say "severely" instead of "potentially".

mzahir• 13 years ago

Wages are so skewed towards the top earners - A typical corporate CEO gets paid $7000/hour. Suppressing tech wages isn't going to make a dent in income equality. Tech is already more egalitarian with the offering of shares to employees at most (if not all) levels.

http://moneymorning.com/2013/04/19/ceo-pay-now-7000-an-hour-...

prostoalex• 13 years ago

One thing that gets overlooked in this debate is the survivor bias. STEM people have a pretty good way to drive down incomes in certain STEM occupations by automating them out of existence.

WordPress alone probably killed a good portion of formerly gigantic market of HTML programmer, CMS companies and consulting companies installing and configuring the CMSes. Potential income from building simple HTML Web sites nowadays is roughly zero, so people with those skills don't stay in the industry (and get counted in surveys) - they either upgrade their skills or move into other careers.

freyr2• 13 years ago

It entirely depends on perspective. When I moved from the west coast to the east coast after completing a STEM PhD, my perspective changed completely.

My girlfriend worked for a hedge fund, where her co-workers and bosses received bonuses that were multiples of my annual salary. I had a few friends who landed law jobs with lockstep compensation, where, within just a few years, they'd be make more than I could ever hope to make at my research lab. Another friend, an english major from a second-rate college, was hired to manage a team of programmers. She had no STEM skills but great people skills, and was eventually chosen to head up a new west coast division. She's compensated extremely, extremely well. We'd occasionally travel down to DC, where there are many, many people feeding off of government excess who make far more than STEM careers pay.

That's what they don't tell you when picking a college career. You'll get paid relatively nicely out of college, sure, but you'd better not expect to make much more than that if you want to be a "STEM worker" no matter how hard you work or how good you are. The glass ceiling is very low compared to many other careers.

Not only that, a $100,000 salary was, not very long ago, the key to a comfortable upper middle class life. The cost of living, housing, everything has gone up so fast in proportion to income that it just doesn't feel that way anymore. I cannot provide my family with the material comforts my parents enjoyed and provided me (and neither worked in STEM... or had college degrees!).

Yes, there are exceptions at the moment if you're considered a "rockstar programmer". Still, that (and programming in general) represents a tiny slice of the overall STEM pie.

crash78• 13 years ago

Agreed - many of the comments (naturally, given the location) focus on the tech part of the pie. From experience in both science and technology industries, I'd say there's definitely some difference between the two in terms of starting and average salaries, and most certainly in the potential for top salaries.

georgemcbay• 13 years ago

I totally agree and have made similar points here on HN in past threads.

It is nice that you can fairly easily make $85k or higher in some regions as an entry level developer, but it sucks that outside of a few exceptions that prove the rule you're unlikely to ever make more than about $150,000 (and I'm talking Bay Area, CA dollars here) without moving into a pure manager role or playing the lottery ticket of starting your own company.

Granted, $150,000 is a lot of money relative to the average income globally, even when you factor in cost of living adjustments, but to have bankers(!) and politicians(!) saying it is too much is a fucking slap in the face.

deadc0de• 13 years ago

Except 150k in Bay Area is nothing and you won't even make it into the middle class (i.e. buy a house).

freyr2• 13 years ago

> Greenspan is not alone in his thinking that STEM worker salaries should look a lot more like non-STEM worker salaries. In March, over “100 executives" [wrote an open letter begging Obama to increase the number of H1-B visas]

Perhaps, as STEM workers, we should suggest that executive salaries should look a lot more like non-executive salaries?

> And those [immigrant] workers would compete with high-income people, driving more income equality.

Really, Greenspan? You're going to paint STEM workers the posterboys for income inequality? Not your banking brethren making 5X, 10X, 50X the average STEM salary? It's a cheap, transparent ploy by those at the top to increase corporate profits at the expense of the workers and the middle class.

Mikeb852• 13 years ago

From an economist's perspective, STEM workers are still just labour. 'Bankers' represent investment, and their compensation is based mainly on the fact that they take on risk by allocating money...

Compensation is based on supply (which itself is based on many factors, including education and demographics), demand (number of businesses in a market, demand for the products created by those businesses), and risk. Assuming no government meddling, an efficient market will properly price workers wages.

What Greenspan is suggesting makes sense from a macro perspective, but of course on a personal, human level, isn't ideal for many people.

afterburner• 13 years ago

Banks, not bankers.

dvanduzer4• 13 years ago

I don't understand why you put 'bankers' in 'quotes' like that.

Saying bankers represent investment isn't exactly non-controversial.[0] Perhaps that's exactly what you're saying?

[0] https://en.wikipedia.org/wiki/The_aftermath_of_the_repeal_of...

staccatomeasure4• 13 years ago

Greenspan is saying that STEM workers shouldn't make more than other workers. The argument isn't for increasing worker supply from external sources in general, it's for targeting STEM for more visas.

It's known that students find STEM harder in school and STEM jobs are widely considered more difficult than other jobs, thus earning their wage difference. Like it's been said by others, this will result in less STEM degrees domestically, the exact opposite of how this problem should be solved.

praptak• 13 years ago

their compensation is based mainly on the fact that they take on risk by allocating money...

I can't believe anybody can say that with a straight face, not after the bailouts.

gilgoomesh• 13 years ago

From an information theorist's perspective, bankers don't create anything, they just skim a percentage off of other people's transactions – they're a drain on the system.

STEM workers create assets from nothing – the best STEM workers create billion dollar (or more) industries from nothing. Bankers just move existing assets around – they're fat that needs to be trimmed.

dragonwriter• 13 years ago

Assuming no government meddling, an efficient market will properly price workers wages.

The assumption is unnecessary, since an "efficient market" by definition includes no government intervention other than that which increases efficiency (e.g., by effectively internalizing externalities.)

dsugarman• 13 years ago

Likewise, tech companies are definitely not interested in paying higher wages

Most tech companies understand that the best engineers are 10x better than the average, but you rarely have to pay them 10x the salary. Most are happy to pay the higher wages if it means they are winning the 10x guys.

If the argument is all about the average -> poor engineer, I don't know that I entirely disagree

staccatomeasure4• 13 years ago

It's cute that the income inequality Alan Greenspan is worried about threatening capitalism is between regular engineers and everyone else, instead of between executives\owners and everyone else. Explains why I see so many documentaries about STEM workers and their lavish 2 bedroom homes they own after 20 years.

EricDeb• 13 years ago

I'm not sure I agree that STEM workers are overpaid. I mean, I make a bit more than the customer support, PMs, and sales people in our company, but I'd rather do their jobs if the pay was equal.

tankerdude• 13 years ago

So basically, Greenspan and other companies think that us STEM folks are beneath lawyers, doctors, and most people in the financial industry? That we should be "put in our place"?

Anyone who knows anything about the H1B rules knows it's all a bunch of hogwash that there is a "skills gap". The corporations simply want higher profits. It's just simply a known fact. Better profits for the promise of a green card.

Let's see the companies prove that there truly is a skills gap. Instead of paying the 'prevailing wage', H1B workers should get the _top_ pay for non H1B engineers in the company + 20% or at that the 90% mark of engineers + 20%, which ever one is greater. Then I say, please open up as many H1Bs as possible. I'll tell you one thing, H1Bs applied for will go towards near zero...

sremani• 13 years ago

That is how your bosses look at you, IT workers are a cost center - whether you are a programmer or sys-admin or db.

The simple fact is the MBA dude hates you.

nohuck13• 13 years ago

Quick refresher on what the word "shortage" actually means.

SHORTAGE: Below market rent-controls. If more people want housing than there are apartments, and the price can't adjust, that's a shortage.

SHORTAGE: An oil supply shock as in the 1970s, and gas stations choose to ration fuel rather than profiteering by jacking up prices. More people want gas at that price point than there is gas. That's a shortage.

NOT A SHORTAGE: The lack of first-class flights from London to Chicago for $1,000. That ain't a shortage, it's a market-clearing price I don't want to pay.

I like the BCG quote: "Trying to hire high-skilled workers at rock-bottom rates is not a skills gap."

k__• 13 years ago

You're so right.

In Germany this is called "Fachkräftemangel", which translates to "Shortage of Specialists". But it can also translate to "Mangle for Specialists".

rybosome• 13 years ago

I am incapable of discussing this rationally, obviously, but this feels silly.

Why do these 100 executives who wrote an open letter to Obama care so much? Obviously they don't want to pay the prices they're paying, but would they be campaigning so hard if the work wasn't important? Ok, so the work is important; they also can't just hire someone off the street, because the skill requirement is high. Sounds like a normal market to me - your demand is high relative to the supply, so the cost rises.

Again, being in this field, I'm wildly partial...but I have very little sympathy for an executive who wants to pay below-market rate for business-critical work. Why not cut your own salary if you are so concerned with profitability? OH, that's different; you _deserve_ it.

kenster07• 13 years ago

I can play this game too:

Are bankers, lawyers, and doctors overpaid?

Well, it depends on what you want to pay people for -- what if we argued for the value they added to society on average? What about the banking industry during the financial crisis? What about the price of lawyers in California staying stable even though the supply has increased multi-fold in the past few decades? What about the people who design, validate, and erect the buildings in which these guys work? The people who created the private jets in which the questionably wealthy have always flown? The internet through which information became significantly more accessible (aka affordable)?

The people who truly enable the good parts of modern life? I know where my vote is going.

Daniel_Newby• 13 years ago

These STEM salary stories seem empty. They are all price and no value. What is the price elasticity curve for engineers? How much of the salary loss would be offset by increased prosperity from more workers?

alexgolive• 13 years ago

Over the past few years I have seen starting salaries at top tech companies (Google, Dropbox, Twitter) increase by huge amounts. This may not be true at all companies, but it is definitely true at top companies. I also know that these companies will hire anyone who can pass their interviews.

I feel like many times the argument is that preventing high-skilled workers from staying in the US will help US citizens. This assumes that there's a fixed pie of jobs and that basically bringing talent from outside will burden the US economy. I definitely don't think that's true.

It also assumes that top tech companies have no option but to hire people in the US. I have many friends who had trouble with getting a visa and instead went to work in Canada for Google. This basically means the US lost one job, plus the taxes and economic stimulus that a high paid worker would bring in.

nnq• 13 years ago

Of course governments and current social elites from all parts of the world want us overworked and underpaid!

"STEM workers" can be the base of the new "over-middle" class - educated, well-off and with good social mobility plus political mobility and geographical mobility (this is fucking dangerous for governments and elites!).

You wouldn't want the class underneath you to have "well rested minds" and time to think about the world and their proper place in it (at the very top that is, because same as in old military societies warriors were the "natural rulers", in the new info-tech society techies will be the new "natural rulers"). Let's overwork them and stress them with unemployment so they don't get any funny ideas in their heads...

Though to be honest, all this sounds good for us STEM workers outside US in lots of indirect ways... I'll bet US will have a nice civil war / revolution soon, and more immigrants moving in any directions will only mean that the enlightening ideas from such a conflict will be easily exported worldwide.

eli_gottlieb3• 13 years ago

Oy gevalt.

Either there is a shortage, in which case STEM workers' salaries need to go up to attract more people into the field, or STEM workers are overpaid, which can happen if and only if there is an oversupply.

It can't work both ways. You can't have a shortage of overpaid, useless employees.

Unless, of course, you're a capitalist begging the government to let you manipulate the labor market to deliberately suppress wages below the natural market-clearing level set by supply and demand.

Capital, capital uber alles! Fuck the markets and fuck the workers! /s

rusabd• 13 years ago

I cannot believe you guys even discuss this. We are grossly underpaid. Mainly because we are (en masse) not able to negotiate the compensation. That would be a problem if we were able to organise, so someone else would do that for us.

Look around, everything is driven by computers now. EVERTHING. Even bloody banks. And we are still not sure are we underpaid or not. En masse IT person is shy, ready to accept lower pay, and easy to accept more hours.

Are STEM Workers Overpaid?

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