What industry has the highest revenue per employee? | Hacker News Reader

What industry has the highest revenue per employee?

craft.co

248 pointsemaercklein128 comments

One item that I find potentially misleading is that, to my understanding, oil and gas companies outsource/subcontract a lot of the seasonal/irregular/less predictable work to third-parties. This means that these people aren't calculated in these numbers, but they generate a good chunk of the revenue.

I could be wrong about that, but I used to work with Exxon and they talked about this - that the total employee base would be much larger if you included all of the subcontractors.

The same could be said for a lot of other industries; only not the other industries which fall in these rankings.

But, the prominent 3 categories that made the list are:

- known as the most corrupt 3 industries in America

- a poor American’s only means of access to 3 of the most critical commodities in their life. The other 2 (food, housing) are disqualified by their own unique attributes.

- oil, healthcare, finance

This is also true with many consumer electronics companies. Design and some level of QC in house, most everything else from the vendors, at cut throat rates.

I think people often don't realize the scale at which energy companies use contractors/etc. The "boots on the ground" folks are almost entirely contractors or hired through another company. Plenty of companies exist purely to provide employees to one oil company in one field.

Exxon/Chevron/Total/BP/etc each have around 50-100k employees (I may be a bit off there, but it's in the ballpark). The workforce required for each of their operations globally is in the low millions.

At the end of the day, a major oil company is actually a construction company. Their specialty is managing complex projects with lots of subcontractors. As a result, they have a surprisingly low employee count.

Telecomms do this for laying new wires/fiber too. They subcontract most all of the lashing, digging, and boring and the pulling of actual fiber lines, leaving the ends loose, and only then use their own employees to go out and actually splice them into the previous lines or into an active network. The connections at the end are quick and easy with little liability risks, unlike climbing electric or telephone poles, trimming trees near aerial cables, going into underground utility tunnels, and digging trenches through power and gas and water and other cables. They also don't have to buy and maintain nearly as many boom trucks and excavating machines like horizontal boring machines or mini excavators.

And at the other end of the business they outsource billing and technical support, and franchise their stores. And seem to be forever laying off thousands of workers.

> then use their own employees to go out and actually splice them into the previous lines or into an active network.

Hahahaha - no. We use contractors for that too - no one who is outside our offices is an employee. GIS jockeys are contractors too. My developers also and most of the call centers. Essentially the only in-house functions are architecture, project management - everything else is contracted out.

And even a good part of those in the offices are contractors. Think Accenture, Capgemini for IT and project management as well as many others, including receptionists, secretaries, facility management, cleaners.

Note too that they don't have to own those machines when they aren't pulling new lines. The same boring machine that pulls a new cable today can pull a waterline for someone else tomorrow, and a gas line next week. By out sourcing there is one machine and crew busy all the time vs 3 machines/crews used only a third of the time.

True, but many of those contractors will themselves be classified as energy companies according to the S&P (GICS) sector classification.

For instance, energy services companies such as Schlumberger or Halliburton belong to the energy sector as well.

But it's true that there will be a ton of low value work that gets outsourced to services companies that are mostly classified as industrials (construction, environmental services, transportation, etc).

These contracting companies the OP is referring to aren't like Schlumberger. They are just temp agencies basically. The one I used to work for in the power industry also does contracting jobs in oil and gas, tech, mining, chemical. They don't own equipment or anything like Haliburton, they just provide bodies. Maybe they get classified as employing people in those industries but it seems unlikely.

Sounds a lot like mining, although you could go a step further and say that (depending on where in the mining boom/bust cycle we are) mining companies are actually finance companies. They find a location (by paying geological survey companies, or by just buying an established claim from someone else), they pay other companies to design and build a mine site, then they pay yet other companies to staff and operate the site. Sometimes the company has very little direct involvement in actually digging ore out of the ground and processing it.

For smallcap you can just consider them an option contract that is heavily marketed.

Most of the materials from the mine are presold.

As one data point, I had no idea

there is a 50/40 split of EE's to contractors just in IT

I think if you follow this line of thinking you end up with a (economic) rent to labor ratio. Any kind of expensive piece of equipment could have been built by employees so by the same token that you count contractors you can include the labor component of those capital expenditures and so on and so forth.

I think there's a difference between capex and opex here - it clearly doesn't make sense for Exxon to build and design their own oil wells and pumps, as there's economies of scale and domain expertise for a dedicated vendor to provide those things as a capital expenditure. But if we're going to measure "revenue per employee", where the desired measure is "how efficient is each company at extracting value for every person engaged in value extraction", maybe there's a better measure like "human opex relative to revenue"?

But that's exactly the definition of an employee vs a contractor. Your last statement is a contradiction of terms.

Right, sorry if I wasn't clear - what I was saying was "there's a lot of oil and gas companies on this list. A lot of the revenue for these companies aren't actually generated by employees, but rather by contractors, and I wonder how much this is skewing the metric of 'revenue per employee'"

When you think about it, everyone relies on many external people, who in turn relies on others. I mean, every time you buy something – a building, a phone, food, insurance, etc. – it raises the question if those who sell that should be counted as part of your operations.

I think this is probably quite similar for a lot of the companies on the list regardless of sector, ie should Apples figure include Foxconn employees?

Oil companies / energy companies are more like investment companies who invest large amounts of money in projects, have them constructed and maintained by subcontractors and then realise profits based on production / generation from said project.

Also revenues in a low margin business aren't really comparable to revenues in a high margin business. Profits per employees I think would be more interesting.

Well highest revenue per employee is kind of bound to result in companies that outsource a lot of work.

Profit per employee would probably be more interesting.

Grouping by company is simply artificial in a market economy. And using revenue other profit is ridiculous. It makes more sense to just look at where the highest paid employees are and the most profitable companies are by return on invested capital and operational expenses (which must including proper weighting of the float between expenses and reimbursement). Unsurprisingly, the company that applies this metric deep across its corporate DNA -- Amazon -- is the onr of the most profitable and one of very few with no natural or secret-sauce barriers to competition, just ruthless excellent execution.

In Europe, it is not easy to fire people. So hiring employees via detachment companies is also the norm for big companies.

Not a fan of Revenue Per Employee as a measure of operating efficiency. It would be much more telling to evaluate net earnings per employee:

Net Earnings Per Employee:

Valero: $365,452 [1][2]

Apple: $766,800 [3][4]

[1] https://www.statista.com/statistics/531676/valero-energy-cor...

[2] https://finance.yahoo.com/quote/VLO/financials?p=VLO

[3] https://www.apple.com/job-creation/

[4] https://finance.yahoo.com/quote/AAPL/financials?p=AAPL

What about efficiency of capital?

That Apple number does not include the slave wages of Foxconn workers, other outsourced labor or contractors for which Apple avoids paying benefits.

Strategies far from unique to Apple.

Ok, I'll bite.

Care to name a hardware company that doesn't use parts from Foxconn?

That doesn't make it less true.

Why are you assuming OP’s statement is true? It’s demonstrably false especially relative to other employers in the region. Foxconn standards are actually quite high relative to other manufacturers.

People there want to work at Foxconn.

The “slavery” rhetoric is entirely baseless.

It may be false by other means, but the fact that other orgs do the same is irrelevant.

Fair, I concede that. I still maintain that OP's statement contributed nothing of value to the discussion.

Actually, it does, and that's why folks are arguing for comparing profit instead of revenue per employee.

As others in this thread have pointed out, if you utilize tons of contractors, your revenue per employee may look huge, but your profit per employee will go down because you still have to pay all those people. Whether you use contractors or employees, it still comes out of your bottom line.

Now, I assume what you are really arguing is that loads of Foxconn contractors should increase the denominator in the "per employee" part of the equation. But that's why profit is a better metric, because if you look at profit per employee of Foxconn, you'd see it is much, much lower than Apple.

Tbf, those are trivially not mathematically equivalent (even taking profit instead of revenue). Suppose each contracted worker cost $1/yr in salaries, and there were 1000 contractors/1000 in-house employees. Then without including contractors, the profit per employee is (X-1000)/1000 ~ X/1000, while including it is (X-1000)/2000 ~ X/2000, much lower. Including or not contractors does have a potentially large difference.

The trick here is that contractors aren't employees, so they only affect these metrics by reducing profit.

They are mathematically equivalent in the sense that they are both equally worthless measurements for the same reason. In both cases, contractors contribute the the numerator without contributing to the denominator.

Using profit seems slightly better (theoretically, it gauges how effective management is at converting contractor effort into profit). But we all know that you can't compare the term "profits" between industries, whereas, revenue is consistent no matter what your business is.

Why should I believe that the statistic does include foxconn workers? I'm asking this sincerely.

They mean that what Apple pays to Foxconn reduces Apple's profit, but does not reduce Apple's revenue. Profit accounts for the cost of subcontracting.

To clarify, I'm arguing that the metric is: (Net Earnings of Apple) / (Number of Apple Employees). What I'm saying is that the net earnings of Apple by definition subtracts out the money paid to Foxconn to build Apple's products.

I'm not arguing that the number includes the Foxconn employees in the denominator, and it shouldn't, because the numerator (Apple's net earnings) doesn't include money paid to Foxconn (as that's a cost of goods sold for Apple).

It is a better measure, but it's still pretty arbitrary. Apple could achieve an even higher profit per employee just by splitting the company in two: put all the capital in one company and all the employees in the other.

I wouldn't read too much into any of those measures.

Comparing profit doesn't really make sense either. Companies like Amazon show next to no net profit cause they choose to reinvest all their money to avoid taxes and shareholders reap the benefits through capital gains.

Ooh, now make the same argument for Valero and all the externalities that come with the petrol market!

The Foxconn manufacturing factories in China are NOT sweatshops, not even close. My hometown (Zhengzhou) has one of its biggest factory, and for people who have no higher education (like straight out of highschool), it's a super competitive job. People literally bribe to get in. Sure, it's still a soul-draining blue collar job, but they follow laws (for an enterprise in Foxconn's scale, they are strictly supervised by the government and the media. The smaller companies on the other hand, are actually more likely to be sweatshops), they follow schedules, provide food and dorms, and a good enough salary by local's standard of living. What else do you expect for a low-skill entry-level jobs, in a developing country?

Calling hard-working people in developing country (my homeland) "slaves" just because they don't get paid the same as Americans is one of the most hypocritical thing I am really tired to hear on Western forums.

McDonald's for McDonald's I was paid better in South Africa than I am in America for the same job in the same company. I earn 3 times more dollar-for-dollar, a competitive rate for the region I'm now in. South Africa is regarded in an honest way as cheap labour (but in this case: highly skilled) but those employees live in the top percentage of upper-middle class for the region.

America is extremely expensive to live in, so "westerners" don't really have a grasp of just how far a single USD goes elsewhere in the world.

America is expensive because the quality of life is higher than in China or USA. Some parts of Europe are higher. There is a very strong correlation between quality of life and cost of living.

Spent some time working in Zhengzhou back in 2010/11, Foxconn paid significantly better (3x in some positions) than other factories. Parent comment is spot-on re: Foxconn job competitiveness.

A lot of the locals I got to know resented Western, media-driven interference in their jobs, they wanted to work longer hours, make more money, etc. They also resented being presented as helpless indentured servants. A lot of them were (are?) proud of their job.

Not applauding the labor practices, just an additional anecdata-point.

[Edited for: data -> anecdata]

+1 - revenue is not the same as profit...

Interesting. I found quite different numbers here. Maybe highly fluctuating depending on the year?

https://www.businessinsider.de/apple-facebook-alphabet-most-...

Better yet would be an earnings per hour worked since not all employees work full time, and some companies encourage a lot of overtime.

This, and more importantly, mattzito comment on external contractors and outsourcing. Energy companies do that a lot.

Wouldn't profit per employee per hour make more sense?

Why would that make more sense than profit per employee or (sub)contractor per hour if we’re trying to measure efficient use of human capital?

I meant employee in a general sense. Maybe "worker" is better?

Yes - sadly, companies are not required to publish the number of worker-hours per year.

Unless you're going to also plot operating costs per employee I don't know why anyone would expect this to make any sense.

Net Margins, Net Earnings, Profits, etc would be a much more interesting measure of employee productivity - though it still hides much of the details.

Altria Group is categorized as "consumer staples."

If you've ever seen the Altria headquarters in Richmond... well, it's unusually intimidating for a consumer staples company -- https://www.google.com/maps/@37.6002824,-77.5147176,3a,75y,3...

Altria is the tobacco industry.

It seems their giant cigarette on I-95 in Richmond was undergoing maintenance when the street view car drove past.

https://goo.gl/maps/ZwkRjFHJizP2

https://media.gettyimages.com/photos/pole-displaying-marlbor...

"Consumer staples" includes tobacco; it also includes alcohol.

This is a pretty useless metric. It's really only used as a proxy to compare the value of similar companies in the same industry when no other data is available.

You know what measures your economic value as an employee? Wages.

Your value as an employee is that which is lost by removing you from the equation. If you can be replaced by virtually anyone, your value approaches zero.

Wages can diverge quite easily from the economic value you provide.

This is ridiculous. Wages measure the cost of hiring you, not the value. If the economic value of employees were their wages, then there would be no profit.

The value of the firm is greater than the sum of its parts.

Revenue is a terrible metric. For example, drug distributors have billions in revenue, but they are just middle men who make a fraction of a percent in profit.

I'm sure there exist a lot of One Person Companies that have much higher RPEs than $1M.

They are of course not in the S&P 500, nevertheless it would be very interesting to read about them.

Remove the oil companies and you mostly have a list of rent seekers ready for massive disruption.

... Who operate on razor-thin margins. 99.9% of that revenue goes right into paying suppliers.

I'm guessing it would be one of the professional sports leagues.

I feel this is missing some industries with smaller company sizes and extreme employee to revenue ratios, e.g. Hedgefunds, High-end Legal Practices etc. Even more so as these may have the ability to avoid support-functions (HR, Mid Level Management etc.) that don't directly add to the bottom line.

Well, it is companies listed on the S&P 500 so privately held companies aren't included.

Multiple HFT companies would be top 10 on that list.

Except most, if nearly none, are not public companies listed on the S&P 500 (which the article was examining).

Disclaimer: work in finance, have worked in HFT, don't currently.

Neither of the two major publicly traded HFT firms would have made the top 10 if they were in the S&P 500.

http://d18rn0p25nwr6d.cloudfront.net/CIK-0001592386/f7d31d31...

https://www.flowtraders.com/system/files/downloads/Flow%20Tr...

I can imagine some smaller firms making the list. Did you have any specific ones in mind?

The most successful ones won't be publicly traded.

Ok. Optiver was under $1 million per person so wouldn't make the top 10. IMC likely would not have been in the top 10 either.

There's been a lot of consolidation in the HFT sector recently [1]. Back in 2008, when HFT was hot and new, a lot of money was made. But lower post crisis volatility and multiple HFT firms chasing the same opportunities has compressed margins. The party is over...

[1] https://www.thetradenews.com/hft-not-so-flashy-anymore/

I may agree with some of what's written and I completely agree with the overall conclusion, but the writing seems to be pretty low effort.

> Finally Two Sigma Securities, the market making arm of Chicago based quantitative hedge fund Two Sigma, will purchase the options trading business of Interactive Brokers.

This confirms my suspicion of world power being concentrated in the hands of a few mighty industries.

When software engineering took off, the first industry that software engineering helped was software engineering. Then once that was nearly complete, the second industry they helped was the financial industry. And now the next industry being revamped/upgraded/futurized is the healthcare industry.

Surprised to see energy in there but as another commenter pointed out, it is because subcontractors are not included.

So Financials is the most powerful industry, second is healthcare, and then IT. After IT, my prediction is manufacturing/factories, media, building construction, and then engineering... in that order.

Not sure where to place energy, but I always saw them as too backwards for shift. Not sure where to place auto industry either.

Scam ICOs

The better metric for human resource efficiency is profit per employee or market cap per employee. This would help adjust for large subcontractors by including them in the cost.

Earning per employee would be a better number because it would better control for contractors, and high COGs. Finance and tech should do well there.

In tech high revenue per employee is indicative of shirking responsibilities, like the minimal fraud oversight on google and amazon, or not paying taxes.

Lobby group fundraising, by far.

All Big Four tech companies are there... except Amazon.

That's just because Amazon's warehouse workers are employees instead if outsourced.

That gotta be drug dealing or ATM hacking.

So the _average_ energy company has twice as high RPE as Google? That's unexpected...

Not really.. the article explains that energy relies on natural resources while google relies on human capital.

Most of the field work energy companies do is subcontracted out, and wouldnt be covered in these numbers.

If Google disappeared tomorrow nothing would be tragically different after a year or so of adjustment.

Without the energy companies we'd be in Mad Max mode for decades...

You are comparing one company Google against all the energy companies. You should say it differently. What if Google disappeared vs Exxon disappeared.

>You are comparing one company Google against all the energy companies.

Doesn't matter for my point, Google is the majority of web search in the west. Even if we add Bing and that Chinese engine, the argument is the same.

Can read it as "if we lost web search".

> If Google disappeared tomorrow nothing would be tragically different after a year or so of adjustment.

I wouldn't be so sure.

Google Search and Google Maps disappearing would be mildly annoying, but people would adjust. But if GMail and Google Docs (both personal and business GSuite versions) were to suddenly shut off, I dread the impact it would have on the economy. It would seriously disrupt many, if not most, small companies in very many places around the world. The extent to which people depend on Google for their data is just scary. Whatever technical literacy a typical person might have gained in the desktop era, we're losing it again in the mobile era.

Google search ( and all web search engines ) disappearing would probably cause serious productivity decline in many fields like law enforcement, research and development, supply chain management etc

Being able to acquire, understand and act on the right information at the right time is probably extremely important to our civilization

>Being able to acquire, understand and act on the right information at the right time is probably extremely important to our civilization

It's important but not that much. We did just fine without it in the 90s, 80s, and 70s and earlier.

So at best we'd be back to the 80s level of efficiency.

Without energy and fossil fuels (and with no time to adjust to alternative sources, e.g. in a sudden disappearance) we'd get to pre-1920 age levels.

Cars wouldn't move, factories wouldn't work, no cargo transport, etc.

Losing "the right information at the right time" of the kind Google provides would be a walk in the park compared to that.

It's just that people tend to take for granted what earlier and not so glamorous foundations offer.

Again, I think this comparison is a bit contrived -- an entire industry vs. one product at one company. Google's search engine disappearing is more analogous to a railroad or pipeline subsidiary of an oil company. Life would continue, the railway/pipeline would be rebuilt, and in 10 years everything would be back to normal.

If you want to make an accurate analogy, compare the disappearance of oil to the disappearance of all modern computing. Both would be catastrophic.

Society is complex and has lots of interdependencies.

>Again, I think this comparison is a bit contrived -- an entire industry vs. one product at one company. Google's search engine disappearing is more analogous to a railroad or pipeline subsidiary of an oil company.

You're focusing on the wrong thing on my argument. I used Google as a stand-in for web search in general -- regardless of company. Because for me, and most of the west, Google is that: all of search.

My argument wasn't really about the one company, or about not being able to replace the company (we could just use Bing and make do with it if that was all I meant it for).

What's more, I also think my argument would hold even if taken to mean the web in general (and not just search). It would still be less catastrophic (and quite mild after a small re-adjustment period) than losing the fossil energy sector.

>If you want to make an accurate analogy, compare the disappearance of oil to the disappearance of all modern computing. Both would be catastrophic.

Both would be catastrophic but the latter less so. We did fine with minimal to no computers in the 60s. We can always go back to that level, which is not that savage or even old. Without fossil fuels (and no transition period to slowly replace them in toto with alternative sources) there would be zombie apocalypse levels of mayhem.

> Without fossil fuels (and no transition period to slowly replace them in toto with alternative sources) there would be zombie apocalypse levels of mayhem.

I generally agree with your argument, but I'm not sure if, with sudden loss of general-purpose computing, we wouldn't have small-scale zombie apocalypse on our hands. The world has grown in many ways since the 60s - including population and complexity of supply chains. All of this would have to be scaled down, and here "scaled down" means mass loss of life.

For starters, the sudden loss of all modern computing would cripple oil extraction, transportation, and refining for years on end.

Would it? We transported as much oil in the 70s without "all modern computing". Faxing maybe...

> Would it?

Yes.

> We transported as much oil in the 70s without "all modern computing".

No, we didn't. Global production (and consumption) has close to doubled since 1970.

Also, "is this possible to do without computing?" and "would the sudden disappearance of modern computing seriously interrupt the way that we currently do this?" are very different questions.

>No, we didn't. Global production (and consumption) has close to doubled since 1970.

Doubled is not that much to cover.

Besides did it double because of increased demand (more population, more developing nations, etc) and efficiencies in drilling (e.g. fracking or how it's called), or because of "modern computing"?

Demand and production of oil are relatively coupled throughout history and both have stayed relatively flat in the west (with substantial caveats, below). So over the past 30 years, both were driven primarily by developing economies (on the demand side) and new oil discovery/extraction techniques (on the supply side).

> Besides did it double because of increased demand... or because of "modern computing"

My answer is basically "yes". The rest of my argument contains a lot of inter-related claims, so I'm going to number them to make things easier to follow.

But my fundamental claim is that modern computing played a large role on both the supply side and the demand side in the oil industry over the past 30 years.

1. Effect of computing on supply: Computing helped provide the steady flow of cheap oil.

1a. Computing enabled more efficient and more accurate discovery, driving down the price of extracting oil.

1b. Computing enabled new drilling techniques, driving down the price of extracting oil.

1c. Computing improved the efficiency of both old and new drilling techniques, driving down the price of extracting oil.

1d. Computing enabled improvements in refining, driving down the price of refining oil.

1e. Computing enabled improvements in predicting demand, decreasing the risks of destablizing cycles of under-production followed by glut.

2. Effect of computing on demand in developed economies: Computing helped decrease d(demand)/dt for oil in developed economies.

2a. Fuel efficiency in vehicles -- both planes and cars -- was driven in part by modern computing. Multiple mechanisms explain this: improved design (esp in the case of cars), more efficient usage (esp in the case of planes and plants), and efficiencies directly enabled by computing (esp in cars).

3. Effect of computing on demand in developing economies: Computing increased the rate of development.

3a. Indireclty: computing helped keep the price of oil more stable and lower than it would've been without computing (see: 1 and 2). Predictable and relatively lower prices enabled a faster rate development, which itself drove more demand. This cycle would've happened in any case, but by keeping prices lower and more stable, computing increased the rate of economic development inb these countries.

3b. Directly: In some of the most rapidly developing economies, development was directly driven by offshoring of IT/computing and especially of manufacturing related to IT/computing.

To conclude:

1. computing increased the availability and consistency of oil supply, driving down both volatility and prices (note: is is the subtle point. In the case of oil there's a feedback loop between supply and demand, so we have to consider prices for equal levels of demand in the real world vs. the hypothetical no computing world. The claim is that, when we fix the level of demand, prices are significantly lower than they would've been without computing. The claim is not that absolute prices are lower; I think without computing, demand would be significantly lower because large swaths of the world would be significantly less developed),

2. computing decreased the rate of growth in demand for oil in developing economies, allowing growth in supply to enable more rapid development in other economies, and

3. computing increased demand for oil by both directly and indirectly driving development.

None of this is to discount the role of other innovations: the spread of public health practices, vaccinations, the most recent wave of globalization, relative peace, decolonization, and so on all played major roles as well. My point is only that, without computing, the state of oil production and consumption would be substantially different with absolutely massive implications for all of the non-western world, and perhaps for the west as well.

Modern energy is clearly how we are all living like kings. Without it, we would not be able to feed all the people, build sky scrapers, build transport lines, cars and other machines - basically on autopilot - so most people can sit at home and watch memes all day.

Of course losing access to energy would be far more catastrophic than losing access to search and computing. I was only making the point that it would be more than just annoying

>But if GMail and Google Docs (both personal and business GSuite versions) were to suddenly shut off, I dread the impact it would have on the economy.

I was talking mostly about Google Search.

These too I'd mark as even more insignificant as such.

There would be some impact on the economy, but more like those frequently recurrent "X billions lost due to Y2K preparations" or "Y billions lost due to malware" etc -- nothing much that people would really care about.

In any case, nothing like not having the source of the majority of energy and transport fuel.

Energy is a high-revenue, high-cost business. They make huge profit on volume but on very thin margins.

Facebook?

Electronic prop trading.

Neat!

I'm going to go out on a limb with no evidence what-so-ever and say anesthetists.

How can any software developer at, say, Apple or Facebook see this and not think they're under compensated.

Because that's not how labor economics works.

Also, why do you focus on Apple and Facebook (#33 and #42)? If you think employees should be compensated per revenue, then oil drillers are the ones that should be complaining; they should be paid far more than software developers.

>they should be paid far more than software developers.

They most likely are being paid more, when adjusting for cost of living. You can work on a rig making $100k a year in areas where $250k buys you a very nice 3500 SQ ft home with a big backyard.

Something that would cost millions in SF, NYC, Seattle, etc.

True in general, but the cost of buying a house is a bad example. Most of that is the cost of the ground, and that doesn't depreciate. So when the developer walks away from the job and moves, they can settle down with millions. I is ttrue though for rent, food etc.

>they can settle down with millions

Yes, assuming an ever upward trend that never crashes. Which everyone should know by now will not likely be the case.

Oil rig workers generally are paid well and in low cost areas.

At the peak of the fracking boom, Williston, North Dakota had the highest rents in the country:

https://www.minneapolisfed.org/publications/community-divide...

Overall the energy sector is still the best paying.

Median compensation for energy sector employees: $123k (tech is at $96k).

https://www.bloomberg.com/news/articles/2018-07-05/shale-cou...

Because of the demographics at HN and my tenure in the tech industry and lack of it in others on that list.

Revenue per employee is not a measure at all of your production as an employee.

It's not supposed to be. Your salary is a better indication of that. RPE is just a heuristic to compare companies in the same industry to see if one is more bloated or not - the thinking is if company A can do this with lower head count, company B with lower RPE may be more inefficient. It's not perfect, just one out of many things you would analyze. You would look at other indicators to give you more (or less) confidence.

I'm more concerned about the janitors at Facebook that are earning $15 per hour with minimal benefits [1]. Those free meals and free gyms at Facebook and Apple are only for the alphas, the epsilons are there simply to cook their food and clean up after them.

To actually answer your question though, companies will pay the lowest wage possible while still being able to sufficiently fill positions. For engineers at Facebook this is $250k. For janitors and cooks it's $15 p/h.

[1] https://www.theguardian.com/technology/2017/sep/26/facebook-...

Same problem with the gig economy

Very good point about the epsilons. But at least in the story even they got their soma.

> Those free meals and free gyms at Facebook and Apple are only for the alphas, the epsilons are there simply to cook their food and clean up after them.

Apple, at least, charges all employees for food and gym. And staffing the dining center has become hard enough that they pay a thousand dollar referral bonus.

There's an interesting comment in that article, by someone who doesn't believe in the Copenhagen intepretation of social justice.

> She said she liked working at Facebook and didn’t resent the engineers and product managers she cleans up after. “I know that they are the ones that are making the money,” she said in Spanish. “They are the ones doing the hard job and getting fair pay.”

One thing that skews these numbers is what counts towards the denominator. Facebook has tons of contractors working inside their datacenters doing breakfix. Do they count towards the 'employee' count?

The other bit is how much of SV's employees are paid in stocks; after 4 years of RSU granting cycles and appreciation, you may well be earning more in stock vests than base salary.

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