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Comment by papito | Hacker News Reader

The raises in tech are pretty high if you are starting out and stand out among your peers. You can easily nail a 25K raise if you are underpaid. My first job, I requested so little money, they gave me MORE. But I learned a ton, and then my salary took off like a rocket.

But there IS a ceiling. At some point your salary flatlines as you become very expensive.

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The question is.. where is that ceiling? I'm thinking about next steps in my career and wondering if I've already hit that ceiling, or at least a local maximum (barring a switch to FAANG). Perhaps the best way to know is spend the time talking to potential employers?

> The question is.. where is that ceiling?

There isn't one. It's all about what you can contribute to the company's bottom line. It's very unusual, but not impossible to get $1m.

You just gotta be able to show the company how much money they can make by hiring you. For example, can you make their server farm 1% more efficient? That's worth a great deal of money.

That number is the ceiling. The floor is what someone else with the skills to make those particular changes will accept as a wage. Do you think a toll booth operator can say 'I do 10k in revenue a day, pay me half of that and we'll call it good'? Please.

> Do you think a toll booth operator can say 'I do 10k in revenue a day, pay me half of that and we'll call it good'?

Of course not, because it isn't his skills making that happen.

There are lots of software jobs where the 'skills' are equally interchangeable. Most programmers aren't in a position to negotiate a rate based on the scarcity of their skills; they have to negotiate based on the market rate, which is set by supply and demand under fungibility od the good (or service, in this case). That is not to say that those services are 100% fungible, but a lot closer to 100 than to 0.

> There are lots of software jobs where the 'skills' are equally interchangeable.

The added value of a software engineer is much higher than the value added by a clerk. That's why software engineers get paid much more. Supply and demand will force a company to pay more for a person that creates $100 in value than a person that creates $10 in value.

Of course, but that's not what the original claim was. The original claim was that software engineers, on average, can demand a wage proportional to the value they create. Which is simply not true. They can command a higher wage because they generate more profit, but how much more they will be paid is not that value (or a function of it - and, again, speaking for the average developer, not highly niche specialists), it's set by supply and demand.

If the claim from the beginning had been 'career advice: specialize your tech skills to the point where you can present such a unique proposition that you can command a share of your value add as salary, and also make sure that that specialization is something that brings a high value add', then of course I would have agreed. But saying that the average joe schmoe web developer is in a position to negotiate based on their value add is simply not true. I mean, don't take my word for it - just look at what the salaries for run of the mill software engineers are. (someone is going to bring up big five salaries and claim SE's are paid 1/2 mill - yeah no, those are not 'average')

> The original claim was that software engineers, on average, can demand a wage proportional to the value they create. Which is simply not true.

It is true from a simple gedanken experiment. Suppose I pay you $10 and you produce $100 in value. My competitor notices this and offers you $20 and entices you away, making $80 on $20 invested. His competitor notices, and offers you $30 to make $70. Rinse, repeat. Your pay will stabilize at $100 minus the opportunity cost of the money, which around 15%.

This scenario relies on the players all being greedy and completely self-interested.

The scenario of someone hiring you for $10 and you producing $100 is highly unstable and unlikely to last very long.

That is again another argument than the original one under discussion. Of course prices converge to an equilibrium in a perfectly efficient market. But wages are sticky, and labor is a lemon market the the employer's pov. Amd those are just two reasons for why people cannot walk into a comp negotiation and negotiate based on value produced. (not to mention that no prospective employee would ever even know that value, but I've left that out of the discussion all along)

The ceiling is actually the minimum of what you contribute and the wage of the person they can replace you with.

> The ceiling is actually the minimum of what you contribute and the wage of the person they can replace you with.

Only if you are unaware of the competition, which is highly unlikely if you have such skills. Lots of companies have server farms they'd love to shave 1% off of.

It's like if you're a movie director that has a track record of making hit movies. Your compensation goes way, way up. Same if you're an athlete that brings the fans in (usually by winning).

There's no ceiling on what a movie director makes or an athlete.

Get real, tech skills are not that unique. Maybe in a very new and very hot area of current research.

> tech skills are not that unique.

Some are unique enough to get that $1m compensation. I don't know what John Carmack's compensation is, but I bet it's north of $1m. And he'd be darn well worth it. Ditto for Linus Torvalds.

Well, let's not take into account extreme outliers. Most devs are not John Carmack. Most devs code HTML forms in Django and faint at the sight of raw SQL.

Talk to recruiters, as they can tell you what to expect at the companies they’re recruiting for, and to some extent in general.

Also your network and online databases and discussions. Some info is public, some info is more available if you can find a private professional community.

If you want to email me I can calculate what to ask for based on my research and experience working with a wide range of engineers.

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