In Silicon Valley wages are down for everyone but the top 10 percent

The bulk of the article implies some sort of zero sum problem. But Bay Area salaries in general aren't bad. The problem is almost entirely cost of living and transportation related. It's strange to think the tech elite are preventing better infrastructure and housing development.

Perhaps they are crying because a skill shortage means they would have to pay more, but instead they would rather the government encourage more people to train as software developers, increasing the supply so that salaries could be lowered.

Businesses resist increasing pay, because that eats into their margins.

Even in capitalist America, SWE pay stagnated until fairly recently. Employers actively fought against increasing SWE pay, even as their shortage was getting worse. They kept wages artificially low, and successfully lobbied the government to fill their openings with cheap H-1B employees - the H-1B quota back then was over twice its current level.

That was a short-term victory, and long-term loss for the industry. If more engineers made $150,000 in SV back in 2005, there wouldn't be such a shortage today.

Eventually this flimsy dam broke, and now we're seeing pay more in line with where it should be according to the supply/demand curve. Arguably it's still not quite there, even in SV, where engineers with their "outrageous" pay still can't afford a home.

So in Germany, apparently employers are still in the "resist and whine to the government" phase. I bet they're begging for the government (i.e. taxpayer) to fund skill-building programs, import more high-skilled workers from 3rd-world countries... the usual stack of solutions.

I'd also suspect higher taxes have something to do with it. Why should I stretch myself paying $120k to an engineer, if he's only going to get $65k out of it? I don't know too much about the taxes in Germany, but I've seen this problem in other foreign locations where we were recruiting: increasing pay did not result in more or better candidates, and all the best candidates were just trying to get to the US any way they can.

Which is precisely why the top 10% in the Silicon Valley are earning more money. Some of what would otherwise be localized gains are offset by globalization and offshoring, but income is definitely going up for those people in the Valley.

I don’t know about Germany- that’s not where the article was about so it’s not terribly relevant here.

We need a law that would make wage fixing a crime with harsh sanctions and better data from IRS about wages.

Here is a free statup idea. Create a better version of Unions that would maximise people's earning potentials and improve working conditions.

Not if wages already are high.

The report suggested multiple policies to attain "wage equality", including increased taxation and forcing companies to increase pay for subcontractors. The result of such policies would be downwards redistribution: less pay for high-skilled workers, more pay for low-skilled workers.

I'm sure you don't think that "wage equality" means that janitors in SV start making $250+ like senior engineers. That is not sustainable. Any realistic solution would bring engineers way down, while lifting the bottom a little bit higher.

I'm not sure when "equitable pay" became a goal. In a healthy free market, people are rewarded for their effort in developing rare and valuable skills. As far as I know, a market in which the government actively intervenes to keep all wages equal is called communism.

If the government wants to take action, perhaps they should work to make SV more affordable for everyone, for example, by lifting ridiculous NIMBY restrictions that keep housing expensive.

All those "high paid engineers" still can't afford a home anywhere near SF. Somehow I doubt the solution is to cut further into their pay.

It IS pretty obvious that the raw, uncontrolled market is not increasing the quality of life for a majority of the population and arguably your luck (your family bought some hectars of land in SV in the 80s? Or even simpler: you were able to go to a good college?) is way more important for your economic situation than your own hard work. This is not healthy for society in the long term and if you are not closing your eyes you see more than enough alarming signs for wrong developments. Better to share some wealth with everyone than being constrained to gated communities and let everyone else fight for meager rest in my opinion.

Minimum wage in SF would be $30k. I very much doubt a strong AI researcher would be making less than that, even in the Ukraine.

25% of people are researchers at Google? Are you saying that's what you think it is at the moment or hypothetically? Research is a tiny tiny proportion of Google's work.

(But let's not talk about the executives you never see, coming in through private entrances straight from their private landing strips and making x1,000 your salary.)

Also, that's a rather low estimate for average compensation for devs at Google. If, as you mentioned elsewhere, the 25% number is a purposeful overestimate, then combining it with an underestimate of compensation means that your total number is murky; it could easily be a drastic over- or under-estimate.

That said, 25% is also an underestimate - in 2016 Google reported that ~38% of full-time employees were in R&D. So it sounds like you think you're overestimating how much they spend on R&D, but in fact you're way underestimating it.

First of all, much of my argument is about the effects of one company paying more for the same work than its competitors.

The company in my example pays its engineers better.

So there's no assumption that these engineers would rather become janitors if it paid the same. There's a much more reasonable assumption that given equivalent work, they'd rather be paid more for it.

As for people flocking to professions with the best pay prospects: that is not only logical, but has been proven many times over, including in our specific profession. I can link you some curves if you haven't seen them already.

Of course, there will always be exceptions. But even then, it's not a reliable way to recruit thousands of hard-working employees.

If engineering paid exactly the same as being a janitor, some of the most brilliant candidates will take a part-time job as a night guards, and spend all their time reading calculus books or playing chess.

P.S. even brilliant people won't willingly go into $200k in debt to attend an elite school for engineering just to be saddled with that debt for the rest of their lives. They'll become night guards and spend their time reading physics textbook for fun.

P.P.S. anecdotal evidence: some of the most brilliant people I know studied physics or pure math in top schools, then switched to tech because it pays.

Even Walt Disney was apparently shocked to hear that people were actually working for him to make a living and not just out of reverence for his projects.

Different people put vastly different levels of effort into their careers. Who decides that they should now benefit equally?

This may sound like a nit but it’s important because they have high profits despite high salaries. It shows the lopsided value of well managed network effects businesses.

I'm seeing the same in the Central Florida area. Postings open for months, the pay scale slowly increasing at the same time. I've even worked with recruiters to help drag those salaries up, explaining how to go back to their clients and explain their expectations are unrealistic. A rising tide lifts all boats.

It is not sensible for a teacher to make the same as someone who works fifty weeks a year.

[1] https://www.investopedia.com/personal-finance/how-much-incom...

https://www.paloaltoonline.com/news/2016/05/23/with-new-cont...

https://www.reddit.com/r/programming/comments/9o0bcc/inequal...

A lot of software engineers think they are on the poorer end of inequality which is obviously not true.

Government isn't perfect. But neither is private industry. We need both. And both need money to function well.

Citation needed. Even supposedly inefficient government spending helps the economy more than having the top 1% hoard resources. Consider Apple's huge cash on hand as an example of the latter. What economic benefit is society deriving from allowing Apple to dodge taxes and keeping that money out of the hands of government?

Now consider that some government programs are wildly efficient[1] while funding basic research that private VCs won't touch. And finally that government employees are often paid orders of magnitude less than their private-sector counterparts for doing largely the same work.

Is there inefficiency in government? Yes. But probably no more than in a similarly sized private company.

[1] https://www.nrdc.org/experts/despite-trumps-threat-eliminate...

Anyway, I'd gladly admit that money isn't the only thing. But it's an important thing. If people in your government aren't using that money wisely (and you live in a democracy): Vote for people who will.

And realize that there's no utopian solution: There's stuff that's better and stuff that's worse. Any system will have major flaws. Crooked timber of humanity, and all that.

Most people, with deductions and stuff, will pay around 1/3 taxes on their salary. Going up if you earn more.

>Dissapointingly it doesn’t convert to exceptional public services or social mobility.

I disagree with that. Some European countries _do_ have excellent services.

If you look at the US, it’s more of a developing Brazil like situation. We’re developing a growing peasant/underclass, growing the wealthy as assets concentrate and squeezing the professional and semi-professional classes.

Don't get me wrong, I would much rather have a large salary, and take home as much of it as I can after taxes. But I would also rather have it be a permanent, stable arrangement (maybe not at any particular company, but in general). Angry torches-and-pitchforks-wielding mobs tend to disrupt that, so I consider it to be in my long-term financial interest to contribute to building a society where people are generally happy and don't feel like they need to get violent to fix their problems. Just looking at the news headlines daily, I wouldn't say that what we have in US right now is such a society.

I and many people are happy to contribute more, but only if others also contribute more. Especially if people better off than me (like my landlord) aren't paying their fair share, that strongly indicates to me that I should not pay my fair share either.

Taxes on capital gains are also way too low. Let's close some loopholes, as well.

The problem with effective altruism is that it requires people to invest in things that sometimes would go against their own personal interests. For example I have no reason to invest my money in improving the public transit of towns I can never see myself living in, instead I would invest that money in places that I or my family lives in.

The flaw of course is that it leads to companies heavily investing only in regions where they're located which are usually heavily gentrified and upper-class neighborhoods.

Second, you’re exactly right in that people’s fortunes can turn. Which is why we should all support things like universal healthcare and higher minimum wages. No one should feel like if things go badly for them they could literally no longer afford to live.

Serious advice #1: thought experiments can have value even if the thought experiment does not directly model plausible human behavior. The same is true of statistical, scientific, mathematical, and philosophical inquiry. Many foundation proofs begin with "assume this unlikely thing is true." Heck, laissez-faire capitalism as a concept started as a thought experiment based around the fiction of a prior redistribution of wealth (too bad everyone seems to forget that first part).

This is a discussion forum, and the question "what if the majority of folks start doing ______" isn't so absurd a question to ask in all but the most degenerate cases.

> like asking what would happen if gravity reversed

Ironically written given the front page has a detailed writeup on an experiment looking for signs of anti-gravity in the cosmos.

Serious Advice 2: "If you're vexxed by income inequality and consumerism and environmental degradation and such -- as I am" is defining activism of any sort with you as its focal point. Any such activism is doomed, because one need only render you unlikable to derail even unrelated work (as we have seen in the UK's politics these last few years). It's even worse to admonish other people to operate this way. Reconsider it, please.

In the meantime, I'll still consider the ideas because I find it useful. There are no bad questions, just people who find it useful to judge others and their questions. I've found it transformationally useful to minimize my judgment, so I don't count myself among that crowd anymore and I don't judge others who do.

If it's the absolute terms I used, like "everyone," that's put you off, cool. Let's instead imagine what would happen if a majority chose to. Or 25%. Or 3.5%.

Just as you chose to answer a question I didn't ask, you could've easily modified my questions to fit your standards.

Serious advice: Responding with judgment isn't typically conducive to learning unless the recipient has learned to let go of other people's judgments. Here's a paper on the subject I find useful.

https://queue.acm.org/detail.cfm?id=3068754