Software engineering salaries are not exorbitant. In fact, engineers may be consistently underpaid for the value delivered. A small team can create millions for executives and shareholders. Ping pong tables etc are a sad tool for management to placate the people who drive the company value up, to keep them from unionizing and realizing the power they hold.
Ping pong tables etc are a sad tool for management to placate the people who drive the company value up
Nowhere is this more apparent than the so-called Hackathon, where you do days of overtime in exchange for a few slices of pizza and worse, are expected to be grateful to management for providing the opportunity to do so! Nothing infantilises the profession more.
Most software projects fail and do not deliver value. Code is not delivered, code is not taken into use, code is not used much. Software is capital intensive and risky. Code can be more valuable than gold but its value is determined by many factors other than skill and effort of the developer.
True, but you can’t figure out what product will fly and which not unless you actually build it. So you are stuck ;-)
Granted, one can filter out 99% of product ideas on a whiteboard but the remaining 1% is still enormously huge. And that 1% is actually the stuff that nowadays gets started.
> Software engineering salaries are not exorbitant. In fact, engineers may be consistently underpaid for the value delivered.
What about the value of those who cooked your lunch? Without them, software engineers would starve and die, so that makes them have far more value, no? Do you think that food service workers are also underpaid?
Consider a food service worker in Facebook's cafeteria. In an hour, perhaps they make 30 lunches, which in the best case delight 60 people for an hour: 60 person-hours of delight for an hour of work.
Now contrast a Facebook programmer, who in one hour might be able to fix a bug that has been annoying 0.1% of Facebook's 2.5 billion users, causing them to be frustrated rather than delighted for, say, two minutes a day, for the next three years before the feature gets rewritten. Maybe that sounds trivial, but if so, shut up and multiply: 2.5 million hours of delight per month for 36 months gives you 90 million hours of delight, for the same hour of work.
So, at a rough estimate, then, the gourmet hacker is 1.5 million times as productive as the gourmet chef. Maybe if I've been overoptimistic it's only a factor of 100,000 or 10,000, but it's huge. And that's how Facebook can be profitable at all despite all the shitty and stupid things they do: capturing even a tiny fraction of the value they produce makes them wildly profitable, as long as they can successfully externalize the harm they do. Some software companies don't even need to externalize their damages.
And that's why software is eating the world.
That isn't the only reason hackers get paid more than foodservice workers. No business is going to pay more for its inputs than it is forced to; that reduces its profits. Hackers also enjoy a dramatically better bargaining position than most foodservice workers, because a hacker with US$3000 has a better BATNA than a cook with $3000: the cook is going to be trying to sell $3 burritos out of an Igloo ice chest outside of concerts while the hacker can buy a laptop, bring up a couple of VPSes on AWS, and spend a few weeks putting together a useful web service, maybe get a few dozen to a few thousand users, but at any rate can easily scale to hundreds of thousands of users. The cook is dependent on someone investing a few hundred thousand dollars (in the US) to have top-quality tools and a good location. Difficult to do yourself unless your family is rich or you graduated from the Cordon Bleu.
This is purely factual reasoning, so it cannot answer normative questions like whether it would be ethically better to pay hackers more or less. It only purports to explain the chains of cause and effect in the world that give rise to that situation, and illuminate the other possibilities inherent in the current state of affairs, and how they might change.
The cook trying to sell $3 burritos "out of an igloo chest" at a concert is a lot less favorable an example of the successful, entrepreneurial, optimal software engineer that he's compared against. The cook could also start a successful youtube channel and turn into the next cooking superstar -- and you could argue that, in ideal circumstances and optimal execution, their actions have just as much or more impact as the software engineer. But few know and can execute their optimnal path and thus their (our) reality is much more mundane.
(Also I don't know where you're from that burritos might be sold out of an igloo chest, that just sounds gross)
There's a difference between working in foodservice and making a TV show about it. I was talking about foodservice workers. You can probably build a successful cooking channel without much capital investment, but not a successful restaurant. Starting a successful restaurant requires talent°, equipment, and land; starting a successful website only requires talent.
That's what FAANG are competing against when they hire hackers. And that's still true even though most hackers didn't apply to YC last fall, because they can sign on as employee #2 or employee #20 with someone who did. Because the other factors of production are not scarce enough to matter, jobs for hackers are abundant in a way that jobs for chefs are not. Patents, noncompetes, H1Bs, the anti-poaching conspiracy, and API keys are efforts to change that, but mostly they haven't been very effective.
(What makes you think the cook is a "he"? Both of the people I was basing that sketch on were women.)
° By "talent" I mean "strenuous and persistent effort by highly skilled people", not some kind of inborn genius. You can't start a business by sitting around thinking deep thoughts; you have to work hard. But for a restaurant, working hard isn't nearly enough, and that puts foodservice talent at more of a negotiating disadvantage with respect to investors.
I'm calling bullshit on this because without the cafeteria worker the whole place would be a cockroach infested dump with moldy lunches in the fridge
It's a fallacy to view anyone's work as less valuable when contributing to the whole -- everyone's work is essential in the ecosystem even if all they're doing is unclogging the toilets of all these knowledge workers toxic turds
> Without them, software engineers would starve and die
Software engineers are perfectly well capable of making a sandwich themselves, bringing a packed lunch, or surviving on an empty stomach for a few hours until they get home. Not to mention buying lunch from somewhere else or ordering delivery food if one cafe is gone.
Unless you're positing a world where all food production, farming, fishing, etc. has vanished, then software engineers are in no worse a position than chefs, cooks, baristas, grocery store employees, or anyone else.
> Software engineers are perfectly well capable of making a sandwich themselves
I have an idea! Let's call it DevFood, and make it a requirement for everyone.
I mean, we already expect the software engineers to analyze the requirements, so we don't have to hire analysts; we expect them to test their products, so we don't have to hire testers; and we expect them to do the operations, so we do not have to hire an administrator. So tell me, why do we have to waste money on an extra guy who makes the lunch? DevFood is the future of software development!
People are generally capable of cooking to nourish themselves. Learning enough cooking to cook for yourself can be achieved in one afternoon. The foodworker employment market is completely based on convenience culture. The software engineering employment market is very different to that.
When asking about the value that a certain occupation provides, I think it's fair to compare them to the rest of society and ask about the balance. I'm not bringing up the plight of other employees randomly to dismiss one argument, I'm asking for a defense of the stark difference in economic status.
Sure, but don't just compare to people who are also underpaid. Also compare to management. In many companies, managers get paid a lot more than software developers. That's not necessarily fair.
Right now a lot more meals than usual are being prepared at home, and a lot of people who had jobs doing that are out of work. On the other hand, essentially the entire accounting system for the state hardest hit by coronavirus is run by "nonessential" employees, because that is what we are calling people who can work from home.
Right now, there are definitely lots of people who can't work from home that are enormously essential in the ordinary sense. For instance, say you have a plumbing emergency. But, you know, your unemployment check is pretty essential too.
As someone who had a plumbing emergency I can attest it was essential also. I can also say I am sure we would have been able to get the repair done regardless, as humans want to help (and make money).
It is correct that those who are working remotely are no longer supporting the cooks, child care workers, etc ... while also having hardship due to the lack of these services. These hardships however are temporary. Our society can't really afford to live with these disparities. I spent a first career in the restaurant industry before learning to work with computers. I can say for certain in my case the first career was much harder and had much less rewards. However, I don't see eating out as essential, but a privilege. I am not sure how we walk back this system, but it seems the time has come that more people raise their own children and cook their own food regardless of their jobs.
I can't figure out what you are trying to say, particularly about plumbers. You seem to be disagreeing with me about something, but your link supports them being essential, which is what I wrote.
There is a division between people whose jobs are secure right now and those who are (or soon will be) out of work.
There is also a division between people who can work remotely and people who have to be at a job site in person.
My point, or one of them, is that these are independent of each other, so all together there are four types of people/jobs.
My apologies, I misinterpreted your remarks as saying plumbers were essential but not able to work. I was therefore defending plumbers necessity and showing their status based on it. Thank you for the clarification on your point for me.
I do agree with you. Those that are able to work now are certainly lucky (as long as the work allow proper social distancing) whether remote or essential.
My last point was on remote workers, especially those in tech which I am most familiar with, is that one should realize how pampered that role has become at the cost of others. Many of the new stresses those situations involve now with cooking and child care that was done by the service workers who are not essential and can not work remotely are the same stresses those service workers encounter all the time, not just in a pandemic situation. If one is able to work remotely now you should take this time to count your blessings and re-evaluate your own internal definition of struggle and what you are entitled to as part of society.
Also, as you may have alluded too, remote does not necessarily mean job security, rather it could be quite the opposite in the long term. It is times like these I wish I was a plumber.
My point was many lower wage workers can not afford the luxury of prepared meals or child care. I was in no way comparing cooking professionally to cooking domesticaly. As someone who worked at every job except baker in the food service industry for a decade and changed careers because of the stress I can not agree with you more. Restaurant work is hard and in my opinion underpaid.
this is not how prices are set. If you don't like how they are set then you don't like capitalism, where capitalists pay labour, and labour have to work because they need to live.
That's all fine, but let's be clear on how the price of wages are set. It is not "value created - some 'fair value'" for capitalists.
If people could refuse to work because they didn't have to pay rent and had access to the commons to get food or work for themselves, we might see capitalists having to share the spoils more.
Right, CEO salaries skyrocket, not necessarily because of the value they create, but because they can get the board and stockholders to back them more than the people actually creating value in a company.
They can do this in the form of stock buybacks, dividends, etc.
The standard software engineer does not have the power to "bribe" the stockholders in that way.
I quit FAANG and started doing my own thing. I found I hated a ll the paperwork. Dealing with taxes, accounts receivable, accounts payable, business registration, finding clients, meeting with clients, networking for new work, unmovable deadlines, pressure, fears of disappointing a client or the client being late on payment or me being late on filing some form my government requires but I have no idea I need, or a million other things.
I realized that some level of not getting 100% of the value i generate is worth it to have someone else deal with all that stuff.
I'm not saying whether or not engineers are underpaid for the value they create but it's worth something > 0
May I ask which of that you found to be the most difficult?
I've been thinking of going the same route, and I'm confident I can handle the paperwork and deliver, but it's the finding the clients part that worries me the most. Not sure if the problems I see are widespread enough to warrant founding a business and going through all that...
CEOs' decision making has far more impact on the revenue of a company than a single engineer, or many engineers. That's why the market rate is very high for them.
If there were only a handful of qualified engineers available on the market, then they'd get paid CEO-like salaries due to the value they provide and being in high demand. But because there is a whole market of qualified engineers they get paid far less.
It's pretty basic economics and doesn't have much to do with stock buybacks/dividends/etc... Regardless of the value of an individual position, wages will be lower or higher depending on the supply of an occupation. In the big picture engineers are very replaceable at market price compared to executives so their wages are reflective of that.
It may be more demand than supply. Plenty of people would love to be CEOs, and have some ability to run a business and delegate, but you can only have one per company. On the other hand, you can have many engineers. If you could only have one engineer per company, their salaries would likely be much higher.
This would be counter-intuitive, because low demand results in high salary, regardless of supply.
