Hacker News Reader

Comment by mabbo | Hacker News Reader

Competition, and value. At the height of Microsoft's days, the average employee generated something like $2m in value.

Take a dozen companies like that, where the income of the company divided by the number of employees is still in the millions, and have them fight for the best talent.

Lately, tech is especially special for this because a good employee is so much more valuable than a bad one. Some developers honestly produce negative value, while a solid team of good people can pay their own salaries many times over.

View on HN

There's still the question of FAANG branches in other parts of the world not paying nearly as much as they do in the US, which is bullshit to me - if an employee generates value while working in the US, it does so outside of it as well. Companies this big shouldn't lower their compensation to match the country they operate in, I feel like it's an insult to employees who simply were born/decided to live in a different country

But 'value contributed' is only a part of the equation that goes into how salaries are calculated.

It's a very small component actually. "Value contributed over nominal employee" might be a better way to think about it. Compensation is set almost exclusively on "What must we pay you to keep you from leaving and doing the same thing for the company that is the same distance from where you chose to live. If there ISN'T another company, its vastly less. If the thing you do is something that everyone can do, it's vastly less.

Yes, but they do it because they can. Local talent in those places accepts lower salaries, so they're still getting good people.

There are significant barriers to moving (for the employee) and hiring remotely (for employers) which means the salaries don't equalize across regions very well. Employers are mostly competing with other local employers, so there's not much pressure to increase compensation and salaries change slowly.

The end reason is always market dynamics. Certain people can have certain rationalizations but the market doesn't lie. Note that it's not a perfect market because of things like immigration control and artificial friction via the broken IMO interview process.

There are many people in China/India who are smarter and harder working and more driven than many people at FANG headquarters. However they're competing with each other in a highly competitive area while in the US there is less competition because of moats dug to create better quality of life. Like how elevators beep when there are too many people to prevent crowding.

So the end reason is very very similar to why any sort of inequality exists at all, just in a more extreme and jarring form because the field in question is supposed to be THE meritocratic field. (Which it is in a way... But most of that disappears in large companies. And in the truly free economic playing ground it's not about smarts but about money and smarts)

Maybe not for the 300-500k/year region, but for the 80-200k/year region: At least for software/engineering roles in big (non banking) companies a salary in the 90 - 120k region is quite possible, for product/sales people with all bonuses probably more. I got around 82k (plus variable bonus and retirement stuff) after 2.5years. 3rd job after my graduation. 6th or 7th (relevant) job all in all.

Considering how much lower the cost for living (compared to eg. SF is) and how much other stuff is covered (insurance, retirement, general infrastructure stuff), the divide is not that big. But it's still there (and pisses me off, too). The company I worked for payed considerably higher salaries for otherwise equal roles located in SF (and constantly complained about the quality they got for their money in SF). That was also often a reason quoted for lower yearly bonuses for the whole company, which again pissed everyone off..

Oh, you don't need to convince me. I used to be an Amazon Toronto employee!

Reply on news.ycombinator.com