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It's not just that.

Google (and a few others) dealt with retention issues from startups and other companies in SV who's sole recruiting strategy was poach from Google, ie- use Google as a filter and let them do all the work finding great talent and then we'll just hire Googlers (or one of the other major SV tech companies).

So retention is a significant factor for Google and other FAANG companies. They can simply pay enough to make sure other companies can't come in and take their talent.

you just described supply and demand. supply is limited, recruiters poach, demand increases, salaries increase.

Not really, the parent didn't say anything about overall supply, just that its cheaper to let someone else sort the diamonds from the dirt than do it yourself.

recruiters resorting to cost effective measures to find qualified candidates because supply is limited

Supply could be infinite and the same still applies. The reason people pay more for refined aluminium is not because aluminum ore is in short supply.

This is fairly normal for certain "glamour" industries. Back in the day when it was relevant, MTV was infamous for paying people almost nothing, for no other reason than they could because MTV had a coolness factor associated with it that people sought. Same is generally true for a lot of the entertainment industry.

Apple still uses that line to underpay people. Their compensation is famously lower than all the other FAANG companies.

Is that really true? Levels.fyi shows Apple right about inline with GOOG, FB and AMZN and significantly higher than MSFT for mid to senior levels.

Supposedly its harder getting equivalent levels at AAPL.

Everyone I know who moved from another FAANG took a pay cut (and everyone who left Apple to another FAANG got a fat raise). So my data is anecdotal but consistent.

Also MSFT isn't part of FAANG.

> Until 2017, FANG was limited to Facebook, Amazon, Netflix, and Alphabet. Another variant of this acronym is "FANGAM," which includes Microsoft.

https://en.wikipedia.org/wiki/Big_Tech#FAANG

I think Microsoft is up there and competitive in the same landscape, and calling out their lack of inclusion in the original acronym is just pedantic. Everything discussed in this thread applies just as much to MSFT as it does to any of the other FAANG companies.

It's not pedantic, MSFT does not pay as much as other FAANG companies. MSFT isn't by any means a bad company to work for, but it's not in the same league.

F: https://www.levels.fyi/company/Facebook/salaries/Software-En...

A: https://www.levels.fyi/company/Amazon/salaries/Software-Engi...

A: https://www.levels.fyi/company/Apple/salaries/Software-Engin...

N: https://www.levels.fyi/company/Netflix/salaries/Software-Eng...

G: https://www.levels.fyi/company/Google/salaries/Software-Engi...

M: https://www.levels.fyi/company/Microsoft/salaries/Software-E...

https://www.levels.fyi/?compare=Facebook,Microsoft,Netflix,A...

Easier to use.

pedantic, tangential rant: I still don't understand why people include Netflix in that calibur. From what I heard and researched, Netflix doesn't hire junior talent and their scope of work is a fraction of Microsoft/Apple/Google. If competitive pay is the only distinction here, I'm sure we can expand that acronym to include a dozen more tech companies

Basically google and FB pay the best, and then msft, amazon and apple are second tier as far as compensation goes.

Twitter, square, uber, netflix, linked-in, pinterest, dropbox, airbnb, etc are all middle-big sized and are fairly variable comp wise.

I thought Netflix paid more than Google / FB (from online hearsay).

My understanding is that the 'Flix pays straight cash -- big ole sacks of money twice a month.

The other orgs pay in things like bonuses or RSUs.

Total comp may be as good or higher, but those aren't locked in a specific rate the way a direct deposit to your bank account is; e.g. you could get less bonus, or the stock price could drop, etc.

Apple also famously hires from non-prestigious schools compared to the “elitism” at FB and Google. I have been in meetings at Apple with multiple people and not one of them was from an elite school (remember schools from Iowa and other parochial places). In contrast at FB and Google there were all the elite schools like Caltech, Stanford, MIT amply represented. I am not sure if Apple deliberately targeted such “lesser” schools or was just less elitist in the hiring process and the filters associated with it.

The salary expectations from Auburn (where Tim Cook is from) is a lot less than from say UC Berkeley or Stanford.

I suspect that this is not just about paying a bit less salary. Steve Jobs is known to value liberal arts and non-formal education talents which might have become part of the Apple culture.

After all, being MIT or Stanford means that you passed specific type of filter but that filter might not be the silver bullet and even bring monoculture.

Despite the fact that the elite schools have elite opportunities, more often than not, the most impactful things don't come from elite alumni.

A lot of previously elitist companies have discovered that top %1 candidates from most schools are pretty similar. And since hiring is much easier today, they're more open to looking around.

Steve Jobs never cared personally much about that, he dropped out from a less know school, worked menial jobs and traveled the world. Wozniak even managed to be expelled from Colorado for hacking the university system. For them, their colleges were not their entire life experience and social life when they founded apple.

It is very different from Brin and Page, that basically catapulted from campus to become billionaires. Their life experience before becoming founders was entirely shaped by Stanford, their identity tied to it. It makes sense that their company reflects this.

It's not just glamour. There's an argument that teacher salaries are low because people find it more rewarding than a lot of other work.

So by this theory people must really love janitorial and fast food work.

I don't think that commenter was saying that lower pay = more rewarding work, but that more rewarding work = satisfied with lower pay.

I know this certainly to be true for people I know who work in conservation.

Nope. That's affirming the consequent: https://en.wikipedia.org/wiki/Affirming_the_consequent

If I could be 16 and be paid to teach, I sure would "love" teaching.

I might be downvoted to hell, but it's more likely because of same supply-demand thing. Teacher is not a high skilled job, not to mention most teachers are outright bad at their jobs thus not producing much value anyway.

Bollocks. Most teaching requires as much training as several other degrees.

I'm a solution engineer and only made it here with a BA in English. I learned a lot of code, but I haven't had to much else formally.

My wife is a teacher, and she has to jump through hoops for a teaching certificate, do regular, on-going re-certs, and be covered in basic first aid.

Plus there is a shit-ton of other issues to stay abreast of, like mandatory reporter status -- on top of learning new teaching tools, like integrating with the tablets they use in science class.

I spend 4 hours a day in meetings, and 3 hours a day doing basic code stuff that a fairly bright 17 year old could figure out. Her job is WAYYYY harder than mine.

> Teacher is not a high skilled job, not to mention most teachers are outright bad at their jobs thus not producing much value anyway.

Attitudes like this are why the state of education in the US is abysmal.

>Attitudes like this are why the state of education in the US is abysmal.

sounds like a death spiral. The attiude is teachers are unskilled jobs, but you also propose that teaching is more involved than engineering (which I don't disagree with: the thought of dealing with minors undergoing puberty increases my stress levels). But if they don't get enough training, the quality suffers and the reputation of the profession and education as a whole is "abysmal".

However, are teachers getting the proper training for that? is 2 years of certification post undergrad and a few more years acting as a TA enough to prepare them for these conditions?

Compare that to university professors, who need a PH.D and much more research to teach. Should that be the low bar for teaching even more rambuncious students "lower down"? The answer is ultimately theoretical, because I imagine the issue is similar to police; there requires a LOT of positions to fill, more than what they could hope to get if they set such high requirements.

The coolness glamour factor in the entertainment industry goes away when you've been a PA for 10 years. That being said, there are a lot of industries and fields where you spend like your entire 20s just treading water and suffering, and only after that when you emerge, bloodied and standing on the pile of your burned out former coworkers, do you get a crack at the lifestyle you envisioned that profession being like as a kid when you began the process of cementing yourself into this life.

As a kid I thought this included some obvious jobs, but now as an adult I realize a lot of professions are like this. Some of my doctor and lawyer friends have been dealt the worst hands of all.

Film composer here. Your description is spot-on.

> should NOT be treated as an indicator for what "reasonable" pay looks like across the entire industry.

Hard disagree. The comparatively low salaries in other sectors are just that, below what workers should be earning. Things are fuzzier in the indie space, but companies like Blizzard, Activision, EA, Epic, Ubisoft, Rockstar, CDPR, etc. all pay low and absolutely rake in profits.

We should call worker exploitation what it is rather than calling fair compensation at FAANG companies "ridiculous".

What you're saying really boils down to whether or not you think capitalism makes sense, which is a much bigger argument, but ignoring that --

Who defines "should be earning"? You?

Currently, we let the market determine it. It's fine to say you don't like that system, but that's the argument you should make, not "Big game companies are unfair". They're just playing the game the way we set it up.

Alternatively, you could maybe argue "I believe it is possible to make AAA games, pay high salaries, and actually make profits all at the same time", which would be an interesting take, and you could maybe explain how.

But saying "this is worker exploitation" is an uninspired, unproductive argument, IMO.

I'd argue that hiding behind "we let the market determine it" is much more uninspired and unproductive. Economic research now a days is constantly showing that markets are extremely flawed. One example of that is society pressuring employees to not share their wages, which is exactly what this whole article is about.

When we talk about FAANG companies in this context, we do so with the subtext that there are so few companies that pay this way that they'd fit into a short acronym. The idea that the top of the market rate is the moral floor for compensation is hard to take seriously.

Besides, people trade compensation for all sorts of things: working at a nonprofit, working in their rural hometown. Why shouldn't problem domain be one of them?

FAANG companies also underpay their workers. It can simultaneously be the case that they pay their workers best in class wages AND those wages are less than the workers deserve. Apple has immense cash reserves built from the labor of their employees. That is essentially the difference between what value those employees generated for Apple and what they were paid. More of it should go out to the employees, and we should push to make the wages of workers at any company be higher percentage of the value they generate for that company.

What does it mean that they underpay their workers, except that they pay them a smaller percentage of the economic value produced by their labor than you think they should? Is that just a deontological claim? Because I imagine "my moral system says software engineers should be paid more, no, don't worry how much more, I'll tell you when to stop" is not very convincing as an argument.

I'm of the opinion that workers should retain 100% of the value they produce. Not for deontological reasons, but because I hold the belief that the outcomes of paying the "leaf nodes" in an organization maximally results in a healthier economy, a healthier population, and more democratic workplaces.

This is not limited to software engineers. I believe the same is true for any worker, from fast food to manufacturing to engineers.

How do you imagine this working, in practice? Do you want to force companies to have 0 cash holdings at all time? That seems like it might lead to some, ah, undesirable fragility.

> What does it mean that they underpay their workers, except that they pay them a smaller percentage of the economic value produced by their labor than you think they should?

That's easy to measure. These companies have a per-employee revenue which is easily a 5-10x multiple of average total compensation paid per employee, and in some cases it's also much less than the per-employee profit.

So they could pay a ton more while also making a healthy profit. Apple is the worst example of this.

How much workers deserve is based on profitability of the company they work at? Do workers who are equally talented and hardworking but work for a failing company deserve less?

That's a complicated question. My answer is probably they will get paid less. They are producing something for which there is less demand.

However, in today's economy the situation you describe would have the workers being paid less and the owner trying to keep as much of the surplus value from their labor as possible.

So, even in a failing company, I'd expect the wages to increase for workers if they received 100% of their value.

I guess if all the profits go to the workers, who provides the investment necessary to start the company in the first place? You could say it's the employees, but then we get in the weird situation of people having to pay to get a job.

>My answer is probably they will get paid less. They are producing something for which there is less demand.

and this is how gentrification works. Not because a company starts to pay less, but because other companies pay more and make just the act of existing close to those companies (even if you were in fact there first) more expensive.

Your solution is great for tech workers, but ultimately means a large swath of society would suffer.

It’s unworkable at a market level, but ideally, yes. Working for failing companies means you’re just wasting your time and not contributing to the society.

"moral floor for compensation" sorry there is no old man on a white cloud that's sets "moral" rates.

And you might not know this but "charities" & "ngos" are notorious for bad pay and working conditions

I think this sets some dangerous thinking because it gives this idea that "you are underpaid" if you happen to fail to make it into those 5 specific companies out of college.

I don't think the situation in tech is as black and white as "FAANG or QA tester". I have friends working at non-FAANG, non-gaming tech companies that seem fine with their salaries. Ticketmaster isn't as pristine a name but they seem to pay well.

Also, pedantic point: CDPR isn't American. I'd rather not get into the details on international salary because that's a whole other topic.

And the locations FAANGs are operate also tend to be the most expensive parts of US.

This is fact which feels related, but doesn't have much to do with labor market wage equilibrium.

High cost of living areas push people away when the local job market slumps. So, the equilibrium does end up relating to high housing costs just indirectly.

Aka, if they paid less the local population drops which would reduce supply.