Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

This is what I will never understand about most established tech people, they see all the widespread misery and poverty in SV and they still have the capacity to feel sorry for themselves for not making X times more than 'that other guy.'

It's always about what they don't have rather than see that they live in an insulated bubble existence that they could never really navigate if it weren't for that wealth disparity because they have such a narrow limited set of skills. aWant an experiment turn off the wifi, see how quickly these people lose their minds.

I'm not mad at you for it, for all I know you are self-taught guy that beat out a bunch Stanford grads by grinding since HS and making it on your own, but it's this never-ending need to beat that guy.

Its like that scene in American Psycho with those business cards, where for some odd reason people seem to have a need to over-embellish their existence's value with triviality that re-enforces the 'yeah, but I have more than that guy' narrative which is completely lost on me.

I hate to tell you but you will never have more than a Bezos or a Musk, either. Not to mention the Nation-state level despots of the World who don't have their net-worth listed on the Forbes 500.

Just enjoy what you have, while you have it, because I can assure those very same tech companies are pouring tons of money to render you obsolete as soon as possible.

Not arguing one way or another. But an alternate hypothesis would be this skill gap has closed.

Education might be better. Or tooling may have improved such that the tangible benefit of experience has, for most current applications, depreciated. Assuming the reduced innovativeness of the average tech worker today versus ten years ago, the equation balances.

Test might be measuring this skill gap in new industries (e.g. crypto) versus established ones (like adtech).

If you are, you’re not getting paltry 2-10% raises yoy.

Maybe in an alternative world, it would... but in my experience, salaries are almost entirely based on market demand and supply, local regulation, and how much money the particular industry you can find jobs on can make, divided by how many people they need to make it happen (which changes how much they pay when they get desperate for experienced workers).

How much value you actually deliver depends not only on your skills, but on the company you're working on actually creating value (which depends on not only the product, but the marketing, sales, local conditions, competition etc.)... and even though that will affect your salary, as I mentioned before, the real driver of salaries is supply (more specifically, how many capable people could do the job besides you, and how much other companies would be willing to pay them)...

For example, we know lots of companies that made billions of dollars while only employing a few dozen engineers... I'm pretty sure those engineers were only getting the minimum possible salary to keep them from leaving for another job... despite them each arguably producing several million dollars of company value every year.

On the other hand, lots of companies make losses for year while still paying good salaries to thousands of people... would you rather see those people getting no salaries until the company turned a profit??

Now that we've established that there's no real correlation between the value an individual salaried employee produces and how much money a company is actually willing to pay them, let's look at the social aspect of the problem as well.

When everyone gets a decent pay (by us increasing the bottom relative to the top), society is fairer in a greater sense, as more people will have the means to have a good life regardless of their education or skills... those with greater skills will always be more highly appreciated and better compensated in a free economy (specially those willling to start their own business - which allows them to extract nearly ALL value they produce at the cost of high risk to themselves... by the way, that's why those who do it are not willing to give their salaried employees ALL the value they deliver). That has great benefits to society as a whole as there is going to be fewer people that resent the "smart asses" making 10x more than themselves, the economy becomes more vibrant as there's more people who can afford to spend money on fun things, and so much more... imagine your son turns out to be a bit dumb (it happens, unfortunately)... should he be doomed to a life of misery?

Finally, you assume you deliver 10x more than someone else but I bet you have zero evidence to back that up. Developers specially are extremely hostile to actually having objective measurements of anything, so we can't really know for sure.

So, that's why I think that no, it's not very fair for anyone to make 10x more than anyone else.

Do you see any concern with other people making more money that would not be reflected in an (accurately reported) inflation rate?

If you don't have the market power to have garnered a good pay increase over the past 2 years of record profits you're almost certainly underpaid, like teachers, nurses etc. If you got massive pay increases you're almost certainly overpaid, like CEOs.

The connection is right there. Maybe these two things could somehow become disjointed but they really don't appear to be such in any meaningful way in the current economy.

Inflation (CPI): 25.2% (2.2% annual increase)

Pilots average wage increase: 67.8% (5.3% annual raise, $118,070 -> $198,190)

Lawyers average wage increase: 13.4% (1.2% annual raise, $130,490 -> $148,030)

A mere 4.1% points difference in their annual pay raises, but it really adds up over the years – pilots started the past decade with lower wages than lawyers, yet ended it much better off. Keeping pace with inflation is extremely important.

https://www.usinflationcalculator.com/

https://www.bls.gov/oes/current/oes532011.htm

http://web.archive.org/web/20120526161129/https://www.bls.go...

https://www.bls.gov/oes/current/oes231011.htm

http://web.archive.org/web/20120526012248/https://www.bls.go...

I don't see that anywhere in my argument.

"Arguing that your wage should always match or beat inflation is arguing for defacto permanent income inequality."

Do you have an alternative approach? I have not heard any mainstream argument for setting all salaries/wages to be equal.

You have to define income inequality and then determine what level of inequality is acceptable. Should a CEO make more than a worker? In my opinion, probably. Should they make 100x more? I don't think so. If I could make the same money flipping burgers as I can working as a dev (let's say around the median salary of $40k), I'd quit today and most other devs would too. Why should I go to college? Why should I endure the longer hours/on-call? Why deal with the frustration and office BS?

Different jobs make different money because the work carries different value. We should protect those at the bottom and try to make it fair. But fair doesn't mean literal income equality with everyone making $20/hr regardless of job, performance, etc (ie equal and equitable are different).

The fact that workers are seeing real wages decline since the 70s is the problem. If you adjusted them for inflation, then income inequality is not as much of an issue. (You'd still have to adjust capital gains taxes and the real increase in things like executive pay, but at least indexing wages to inflation would have benefited things on the worker side.)

"You’re literally saying your work is always the same amount more valuable than the average labor cost increase incorporated into inflation numbers"

Not if everyone gets the inflation adjustment as they do in that other country - Denmark maybe? The discrepancy can be adjusted by increasing the floor, as that impact will raise the lower end more than the rest of the market (eg the people that need the raise most get the biggest impact while those not at the bottom see minimal effect upto a certain level).

You're literally arguing against yourself. You're saying that workers should not get inflation adjustments. Where do you think that money goes? It goes into the pockets of the executives and the investors (capital instead of labor).

On top of all this, you wrongly assume I'm some high earning person. I make less than $100k and live in a moderately high cost of living area.

Most things are interconnected. Yes, gas might not directly affect a specific company, but it will eventually due to things like inputs, shipping, etc going up. And yes, even the people on the supplier side getting raises will affect it.

"People like to think of X% inflation meaning that every dollar is worth less"

At an aggregate level that is how it works. The basket of goods costs more. The person's purchasing power has been reduced. The the number of dollars needed to purchase the same basket of goods is higher. So yes, the dollar is worth less. As you point out, not every product costs more, but most do eventually as the effects ripple (some go down, but usually though changes in technology/production/etc).

I understand that the company needs to stay competitive and they would need to increase revenue to increase salary. Usually that isn't a large enough increase to affect competitive prices for the actual workers (executives and management are different). Of course that assumes being competitive with other onshore companies. If competing with offshore companies in LCOL areas, then it's going to be nearly impossible to compete (see things like steel production in the US).

Getting a 4% raise on 150k salary in an uneven 8% inflation environment is a genuine meaningful increase, and will have you "keep up" fine in the short/mid term.

If this is your impression of internal tooling, then your internal tooling team is terrible.

The places I've worked with good internal tooling teams provided a dramatic decrease in time to delivery. Automated failovers? Don't have to write it, it's in internal tooling. Automatically rebalancing traffic across datacenters? Already in the framework. Service discovery? You already know.

I could go down the list, but with a good internal tooling team, the only thing I've ever had to worry about was my app's business purpose. I don't have to muck with configuring monitoring, or load balancers, or getting authentication to talk to another app, or how to get a database, or etc.

The difference in time to delivery is dramatic.

Places I've worked without internal tooling take like 2 weeks just to get infra for a static HTML site.

The places I've worked with bad internal tooling take 3 weeks to do the same thing, because you'll spend a week arguing about whether the tooling works.

The places I've worked with good internal tooling take like 15 minutes to do it. I spend longer reviewing an MR than I do deploying infra.

Tooling is a huge part of the reason companies throw fistfuls of money at clouds. They could get compute on-demand cheaper from Leaseweb or OVH or hundreds of other companies, but they don't. They pay the premium for AWS or Azure or GCP, and it's because of the tooling.

Not sure how important that is, though. Often the product gets sold despite of the product, thanks to marketing, operations, logistics, sales, support, legal and management (product/project).

Genuinely curious but do you consider product/project management to also 'be making the product'?

Like others point out, it's incredible the US hasn't mass outsourced their work to Europe yet.

Arguably one of the best at doing this is Apple. A similar product exists and has cheaper options (various Android flavors) but people prefer their green text bubbles and status symbol brand effect.

I'm very confident that I could buy a nice house in a low cost of living area, throw together a SaaS that pulls in a few grand a month, and then work on a more ambitious business while living comfortably. BUT if that ticking time bomb in my chest goes off while I'm doing that, my family will be relatively fucked. (~$250k life insurance payout plus our ~$500k net worth, so the wife will suddenly have to become a working mother with out of date skills in a relatively crappy locale..)

So in my case, it's worth sticking around at BigCo for another year or two and getting in shape while I'm still under the benevolent gaze of Master Faang

EDIT: Dang, I've been a fool.. looks like it's only about $100 a month for $1M in life insurance actually, haha. Maybe I should sneak out of here sooner rather than later

The 12 hour vs 2 hour thing is to allow for a degree of normalization, similarly to how it's unclear about what's being considered when 1 applicant spends 3 hours on a LC medium and another spends 30 minutes. Spending an extreme amount of time on take-homes confounds simple pride with someone who's otherwise a bad fit skills-wise but can eventually make up for it with an input of time, something that might not be appreciated after an offer is accepted. Too often companies will refuse to speak further with candidates if even 1 out of 20 test scenarios are not covered just because someone else chose to spend their entire weekend on the problem -- they'll be the same ones complaining about a dev shortage, no doubt.

I worked in a law firm for a while, and didn't see the 'daily scrum/standup' thing done, even when multiple lawyers were working on the same case. They would certainly have regular meetings, and direct support staff to do certain things.

I was only a delivery/courier person, so certainly wasn't privileged to hear every case detail, but I was friends with someone whose mom was effectively the office manager. She knew most practical details about the cases - court dates, filing dates, parties, procedures, etc, but would never dream of telling any of the lawyers how to lawyer. She might remind them of due dates, but she didn't set the dates either - the courts did that.

Like Michael O'Church talked about a company hiring a software engineer and another hiring a manager, and he and the engineer A/B testing trying to get hired as an engineer or as a manager. And in the interview, they wanted him to come up with the golden algorithm that took them months and was their hot shit with which they would win big, they wanted that in an hour. Actually less, you couldn't solve it in minute 59 without coming up with incremental steps to "show progress" as if that weren't counterproductive. So like 4 minutes, Michael O'Church lied through his teeth in favor of these guy's patience. 4 minutes of silence and it's over. And because he couldn't do it that's when they started discounting points, like you start at 100 and then get knocked points for not having gone to Stanford (or Berkeley as he puts it, but you still get discounted for Berkeley in reality), then more demerits for every flaw, negging over and over. Always communicating it's the engineer's fault he's treated like shit.

Whereas for applying to manager (which in many ways was more honest, it was arguable, he just hadn't been formally promoted with actual employees with a wage, he just pretended he had and had the knowledge to back it up), with applying to manager, he started at like 80 points and everything he did well added points to his value, they saw him as an ally. Against the software engineer, against his own alternate self, whom they treated as the subordinate, like enemy slash slave.

So that story I don't know how to judge, I don't have enough visibility on Michael O'Church and I have very negative opinions about a lot of his thoughts. But that's not the question. The question is, if I do crack the golden algorithm that took them months right then and there, in the heat of the moment under time pressure, in the interview, under adversarial circumstances, all of that, in the four minutes they actually give you without acting impatient, if I DO not if I don't IF I DO will that get me human dignity and a wage? Or will they still reject me because I'm not submissive, which I can never again be after standing up to torture?

[1] So what this means is, suppose a chess player is at a crossroads, and thinks for a minute. And from that point on, plays perfectly until checkmate. Every move correct. Saying I don't do it perfectly would be like saying the chess player didn't play perfectly because he didn't lay the pieces in the exact geometric center of the square when he moved them. I get every algorithm interviewer to say "what the fuck", "did you hear it before?" "that was fast" But it's never enough. Best job I had was $20 an hour, dream job, as a handyman, construction. Dream job. I got promoted into software, and was quickly fired.

Managers are primates first, mathematicians a distant second. They talk about being mathematicians a lot, like a lot, they pretend it's all about the bottom line, but no. It's about dominance, being alpha, a guy who stood up to torture is an alpha challenger, no hire, no matter what he can bring to the company. Mathematics is a distant distant second.

Once I sat on the other side of the table, and saw how a /majority/ of qualified candidates were turned down, I didn't feel so bad when I was rejected. The key thing you *really, really, really* want to avoid is a bad hire. I've seen candidates rejected for the oddest reasons. It was definitely the right choice to do so.

In the kinds of companies I've worked for, if you're at all not sure about a candidate, the decision should be a no-hire.

I don't feel rejected any more. A good mental model is:

If you're qualified, you role a die. If the die comes up a 6, you're hired. If you role 1-5, you're not hired.

(The number of sides on the day varies by industry; I think 6-sided is about right for my industry in the current job market)

Where have there have the layoffs started? What evidence do you have that we are "heading back into 'lucky to have a job' territory"?

I'd rather us not use Stanford as a baseline even if the crowd is numerous and abundant on HN and SV.

11 years in the (relatively young) tech industry is quite the tenure at this point, _imo_.

My point was that the market is hot. Hot enough for an 11 year "veteran" to still get a 39% increase. Also want to point out I've "hopped" as many jobs in about as many years. Some people coming into the industry get taken advantage of compensation wise for a multitude of reasons just to get their foot in the door. I also strongly believe in skill stagnation at certain companies and hopping is the only way out.

Again, none of these arguments really matter as it comes down to individual experiences.

Not only FAANGABCDEF, but "Staff+, with specialized skills, at FAANGABCDEF, in a small number of specific metro areas". If 1 software engineer can be found who makes $700K for every 29 software engineers at other companies/metros/levels who make $100K, Hacker News Commenters will tell you that "Software engineers make $700K". Important to point out there are a lot of other things in play that make it more complex.

A lot of people a lot of people are making less money than they could be due to being complacent about reaffirming their own value. America, and most of the modern world, runs a labour market and to properly value a good in a market you need real sales data - I think it's a solidly good idea to interview regularly, be prepared to job hop... but make a sane evaluation about the decision before committing to leaving or joining a particular job. Most employers over-advertise their business because... well... advertising works - so the grass might not be greener on the other side. But if you have an offer for 120k and are currently making 80k from an employer that values you you can discuss that with your employer to seek a salary equalization.

This decreases over your mid-career. You can still get good job bumps of 15% - 25% in your mid years by job hopping.

But later in your career you will get rewarded by loyalty and sticking around. Those massive salaries that everyone brags about generally (not always, but usually) come from internal promotion or from poaching. Those careers require you to be part of specialized teams with high-value business-specific knowledge. Those job roles are not given to engineers who job-hop. Simply put, in your late career, if you are only staying at companies for 12-18 months, then you are not getting deep enough into your specialty to be worth the insane salaries. So long term loyalty becomes much greater rewarded.

This is another reason why I recommend people stay away from FAANG early in your career and move to those jobs later. Early on, you should job hop through smaller companies where you aren't as enticed to stick around and you can more easily get promotions. Then settle down later in your career at the large companies who want and reward loyalty with insane compensation packages.

From another point of view - design and behavioral questions original goal is to confirm that candidate have related experience from day to day work, so if you have enough practice on your current job - it is not so much time to prepare for design and behavioral part of interviews.

Or investing on margin.

At today's rates, which I'll enter at 5.2%,

A person making 200k at 8x is buying a house worth 1.6 million dollars.

Assuming a 320k down payment(ha), 20k in taxes, and 5k in insurance, the monthly payment comes out to over 9000 a month. I don't think anyone in CA at 200k is taking home that much monthly, but maybe my math is off.

I think 2.5x is also probably not the norm, but I'm extremely conservative with money and what I went with.

4 or 5 I can believe, but in today's market with today's rates, I can't see how 8x is even possible.

The funny thing is: you just explained why property taxes are basically 'free'. (They are basically the best tax. Tweaking them to include only the value of the land, and not the house makes them even better.)

Basically, supply and demand in the housing market determine the sum of property taxes plus mortgage payments. If property taxes fall, real estate prices increase until the sum is the same as before.

If property taxes increase, real estate prices decrease accordingly.

Of course, existing property owners will feel the changes in price. But for someone young or from outside the area, who doesn't already own property, areas with high and low property taxes cost the same amount to live in.

The area with high property taxes can either spend more on public infrastructure or lower other taxes.

In the long run, all of society is made up of people who don't live yet today.

In the short run, votes are mostly cast by people alive now, many of them owning property.

That's because rental prices are ridiculous.

For some reason I was reading the comment that the average homebuyer is paying 8x their salary for a house. What you've been comparing are median incomes to sales prices. A useful indicator, but not capturing what people are actually paying - it is entirely possible the 'medians' are priced out, especially with such constrained supply.

That makes me feel way less crazy now... apologies again.

Which is starting now - it's been almost 100 years since the last one.

Most responses on an assumption that, inflation adjusted, housing prices only rise. For many areas this is not true, the bay might not be one of them, it is probably even more localized for the areas that are more protected from downturns.

From your example, a house would be around $5.5k/month before maintenance / capital costs on take home of ?12-14k?. Seems rough, especially if one of those salaries is lost or degrades.

It is all perspective though, we're used to lots of space and size. My normal is other people's insane.

And from what I gather that's not an isolated incident.

It's possible that I am hilariously underpaid and need a new job.

Yeah but if you multiple that by 12, you get something like $12k, or $15k for argument's sake. That $15k does not explain the disparity between a €55k/yr salary and a $150k/yr salary, so clearly there is another force that is at play here.

My wife pays a little more then $200 a paycheck for a family of 4 for a non high deductible plan. At my worst job it would’ve been $700 for a family of 4 with a $100 spousal surcharge (only if they could get other insurance through their work).

I've posted this multiple times before, but a developer on $120k, paying $2500/month on rent and $1k on health insurance in california will have more left over at that point than a mid level engineer makes before tax in the UK. That gap is inexplainable by anything other than "You get paid a crap ton more"

> Obviously once you start making 300k+ in US none of that really matters, you win at life in general - but it's not like people in Europe making 60k(euro) as software devs are in poverty or anything.

Honestly, it doesn't matter at half of that, but the second part of your comment is bang on the money. I wouldn't take a tripling of my salary for a move to the US, for example.

3 bed terraced houses with access to good schools, 50-60 minutes out central, sell for £1M, so if you're entering the area want a family you really want a household income of £200K+.

[0] https://www.thesalarycalculator.co.uk/salary.php

[1] https://smartasset.com/taxes/california-paycheck-calculator#...

Especially since most rank-and-file employees seem to prefer WFH, we can assume that the push back to the office isn't a boondoggle for them. Just the opposite.

Companies are competing fiercely for labour. Wages in the tech sector are really high compared to the rest of the economy. Offering the option of WFH is a major draw for many people. There's not much regulatory intervention either way (and if anything it's in the direction of making offices more cumbersome to run). Office space also costs a lot of money to lease or buy and to run.

So there's lots and lots of market pressure on companies to figure out how to make WFH work.

Just like moving from artisanal workshops to factories required major re-organisations of how work is done, and how companies also needed to re-organise their white collar work to really reap the rewards of moving from paper shuffling to Word/Outlook/Excel jockeying, I expect WFH to be no different.

Not all production of physical goods moved to factories. I expect at least some in-office work to remain.

I don't know to what extent existing companies will be able to fully capitalise on WFH, and to what extent this will need newly founded companies.

(From my personal experience, I can tell you that everyone in a team being remote seems to work well enough, but if you are the only guy working from home in timezone X and the rest of the team is mostly working from the office in timezone X-6, that doesn't work so well.

But that's a much more extreme case than what most employees are asking to keep.)

In any case, because of all the factors I outlined in the third paragraph, I expect WFH vs in-office work to shake out in a fairly free market way over the next few years.

> And the reality is most tech jobs don't really pay as much as you think. For the good remote jobs you'll be competing with people who are simply better than you ,so good luck.

I guess it depends on what "you think" tech jobs pay, but this has not been my experience. If you're even half-decent, there are countless remote software engineering opportunities that pay well above $100k, which is a great salary if you're not comparing it with the top end of the industry. Most companies right now are facing a labor shortage, so it's far easier to get a remote job as a SWE than ever before.

The idea that you shouldn’t get into IT in the US is silly. Companies need global workforces and most American companies aren’t going to outsource everything. I worked for MSPs and interviewed with many last year. Yes SAAS and hybrid outsourced infra to MSPs is common, especially in Europe.

Article from Forbes specific to 2022 growth.[1] Healthcare and IT are usually the top 2 skilled worker areas with growth. I’ve seen Physician's Assistant and Software Engineer as the top 2 growth jobs for college grads.

[1] https://www.forbes.com/sites/ashleystahl/2021/11/08/the-top-...