Gen Z Is Overestimating the Average Starting Salary by $50K, Survey Finds | Hacker News Reader

Gen Z Is Overestimating the Average Starting Salary by $50K, Survey Finds

finance.yahoo.com

33 pointsVaslo53 comments

> Current graduates are simply asking for their compensation to reflect the cost of living in the United States.

If the entire GDP of the USA, after taxes, were simply taken (about $15 trillion) and equally distributed among the ~210 million working age adults of the United States, each would receive about $70,000 a year.

If the 70 million university graduates were each paid a handsome and deserved $150,000 (hey, that $100k's only the start, right?!) that would be about 10 trillion for them, and the remaining 140 million Americans would collectively get about 5 trillion, or an average of about $35,000 each.

America is not actually infinitely wealthy, and a fair and just society requires some hard thought about how ultimately limited wealth gets distributed.

yes, but I think we need to start discussing what value college is actually bringing to society. Many of these majors do not contribute directly to wealth growth (but teach 'skills' such as critical thinking etc.) Higher education has no incentive to lower prices because they carry none of the risk if a student defaults. Even worse, there is no guarantee that students will be financially successful after graduation and they are still responsible for the debt if they are not successful. I don't blame students for being resentful but I think the resentment needs to be directed at the correct source of the problem: higher education, rather than blaming businesses for not paying enough money to pay off a 100K student loan debt. I think it is a tragedy that we live in a society where you are viewed as 'less than' if one does not go to college. This view takes advantage of our emotions and leads some to go to college without a plan and load up on debt without a clear plan on what they will do with their life. Just to be clear, some people should definitely go to college but the current situation kids being told practically from birth (my evidence is the popularity of 529 funds parents/grandparents set up) that they need to attend college is ridiculous.

There's an argument that too many people going to university can destabalise society:

(Economist article)

https://web.archive.org/web/20220713015644/https://www.econo...

Those 529 funds can be used for other forms of education, such as a trade school.

I think the biggest problem is credentialing. Employers want 4 year degrees for just about everything. Many careers/industries could probably switch to 2 year degrees and be fine. I'm sure there are a few that could just do a bootcamp.

All that sort of leads into the secondary problem of debt, with people not considering the cost differences of various schools due to bias, prestige, easy loans (like you mention), whatever. It's still possible to go to the state school I attended and end up with around $85k in debt. Not great, but much better than other schools where tuition alone would surpass that. I feel like this cost difference isn't covered enough in high school, and that students are making emotional decisions about where to go.

Real GDP per capita per year increases over time though, it's not some static number that must take from others for yours to grow, it's perfectly possible to increase the GDP to get your larger salary.

That said one needs to be realistic about it, is going to college really going to make you 3x more productive at 22 than if you didn't?

> That said one needs to be realistic about it, is going to college really going to make you 3x more productive at 22 than if you didn't?

Obviously this depends on what you might have done instead… If on the one hand you went to college and learned to program, and on the other hand you didn’t go to college and didn’t learn to program, then you are going to be 100x more productive (as a programmer) having gone to college.

It’s hard to disentangle having gone to college with having learned something there.

I learned plenty of things in college. The real question is how much of it is stuff I actually use today, especially for my job.

Calculus - no, literature - no, Spanish - no, English - no (HS level is sufficient), cryptography - no, networking - no, COBOL - no, assembly - no, business minor classes - barely, all those liberal arts - nope.

And yet, had you not learned to program, a programming job right out of college would have been out of reach.

So it’s possible to learn something at college that makes you 10 times more valuable for a particular job.

I learned how to program in HS. A bootcamp could also teach someone how to program. So could an associates degree. But employers just want the credentials of a BS or MS. For whatever reason, associate degrees are uncommon and looked down upon.

So sure, you could learn something useful in college, but there are more efficient/cheaper ways to do it. A lot of college is waste due to excessive employer demands for credentials and bureaucratic school requirements (liberal arts, foreign languages, etc).

My 2 cents as a Zellenial:

1. I've spent an hour trying to find this survey but cannot. My hunch is it's an online survey with questionable reproducibility (especially after looking at similar research produced by Clever)

2. I'm not too surprised by my college aged peers overestimataing average starting salaries. With the increase in CS/ECE students and a relatively small but vocal minority talking about 200K TC out of college, the rest of us assume assume this is a common entry level salary, when in reality compensation is well below that (on a separate note - I HATE the TC designation. that 200k TC is more like 140k/year when you factor in vesting). Heck, the CS program I went to is one of the best programs in the world and even they vocalized that their AVERAGE starting salary was in the 80-90k range, yet most of my peers never realized this.

For public companies with monthly vesting without a cliff (FB, Goog), TC is actually a good model for what the company deposits in your bank account at the end of the month.

For private startups, it's obviously a less good measure both because you don't get the incremental liquidity over the course of the year and also because even when you get that big chunk of shares at the end of the year, it isn't liquid.

An interesting middle case is public companies that have a 1 year cliff. I've heard Amazon has this. Anyone care to chime in about how TC is calculated there?

When NCGs say "TC" (or at least the NCGs I've interacted with) they calculate it as Base_Salary+Total_Equity_Grant, when in reality it should be Base_Salary+(Total_Equity_Grant/Vesting). I've seen a couple experienced (10+ YoE) people do the same mistake as well, but this is all anecdotal of course

TC does factor in vesting, at least in typical form. It does assume you at least last the year, though.

What it isn't is recurring, though. At the same time, recurring pay is also inaccurate especially for junior roles since many companies L3 - L5 (Google definitions) equivalent are mandatory within certain time frames, eg up level or be fired.

> I HATE the TC designation. that 200k TC is more like 140k/year when you factor in vesting

Can you explain this calculation?

He’s saying 60k of the compensation is equity and other fringe benefits

Startup equity can be completely worthless, but shares of Apple/Google? Seems pretty solid...

NCGs at Apple are hourly their first year (not sure if they are granted stock on date of hiring w/ a 1 year cliff or if it's granted after the probationary period), and Google has unoffically stopped hiring NCGs w/ stock (almost every single NCG at Google I know who's been recruited since 2018 has been recruited through the ER program)

Yep! Exactly this! Apparently I need coffee to be coherent!

What's wrong with 60k of equity each year? Most engineers are Google are vesting their equity monthly, so if they sell it into the open market immediately it's as good as salary.

I applied for my first career job (read: first job that wasn't "you don't get a living wage" retail, and which actually used my degree) 4 years ago. It's the job I'm currently still at. When I applied, it was for an entry level position at $35k. After the interview, I was offered a senior position instead for double that salary. Apparently, my current salary after 4 years of $81k is still on the low end for a senior app dev; go figure.

So on the one hand, expecting a six-figure job out of the gate is ridiculously naive.

On the other hand, over the past few months, I've gotten more and more tired of the very idea of money. Everything from "do you deserve to enjoy yourself?" down to "do you even deserve to live?" (and everything in between) is decided by how much money other people are willing to give you, meaning employers have a massive, slavery-like chokehold on employees. Meanwhile, most people don't even understand what fiat money is, but they're greedy about wanting it because under a certain amount, you suffer and die. Literally. Which only happens... because other people are greedy about money, too, for the same reasons. It's a vicious cycle. (BTW, the answer to "what is fiat money?" is "anything that represents a promise to complete a trade". That's all, it's just promises, but we treat it like it's a deity that we must worship lest it send its wrath upon us and kill us.)

Anyway, rant over for now.

I agree. I am in an entry level position right now and not making much, but I am hoping to push past that before long and make more. However, parent, teachers, relatives, everyone all said the same thing. "go to college, you you will make lots of money!" Turns out, that was a gross oversimplification and a CS degree doesn't automatically make money. You have to have a mix of experience and solid projects under your belt, and if you don't have those then you will suffer a lower paycheck for it.

Personally, I am tired of the rhetoric that "kids are too entitled! They expect MONEY when they graduate?" when that is exactly what everyone tells you practically from birth. If I have kids, I am going to try and make sure that going to college is an educated decision, and not some place they feel they absolutely need to go.

I think college/uni should be about personal growth and education first, career opportunities second. Can it help you get a job? Great. But that shouldn't be why you do it; you should do it because you want to learn about the world.

That said, since university is privatized, it's expensive, which sucks for society. So it's definitely going to be a consideration of whether it's affordable to learn or not.

In a way I can agree with that, but we need to change the narrative. Instead of telling kids to go to college to get a job, we would need to change it to "go to college to learn interesting things." When we tell kids that, that's the expectation they will end up having when they go.

The demand for college also has to go way down to make it more affordable, save for maybe an act on the government's part. Learning for learnings sake is great, but not $50k great.

> In a way I can agree with that, but we need to change the narrative. Instead of telling kids to go to college to get a job, we would need to change it to "go to college to learn interesting things." When we tell kids that, that's the expectation they will end up having when they go.

100%

> The demand for college also has to go way down to make it more affordable, save for maybe an act on the government's part. Learning for learnings sake is great, but not $50k great.

An act on the government's part, or less predatory institutions. Maybe both. But it's absolutely needed. Reducing demand for education because of finances is terrible.

I say decrease demand, because people are going to college for the wrong reason. People have been told that they cannot get a good job without a college education, and that is simply not true. Because everyone thinks thy need one in order to live comfortably, tons of people who otherwise would not think of going, or even want to go, end up going. This ends up raising the price, because universities know they can get away with it. If people were going strictly to learn, I would agree.

At this point though, I think the only thing that is going to fix this situation is the government setting limits on tuition. Future generations are going to have it worse than even we have it unless something drastic changes the market.

In an ideal society, the number of people who want to learn as much as possible about the world would equal the number of people in the population :D

There definitely needs to be some sort of government-imposed improvement on the cost of higher education. In many European countries, university is free; if only we in the US could do something like that. However, I'm pessimistic about that ever being possible, because 'Murricans hate the idea of paying for anyone else in any way, even if it's only like $12/month from them for everyone in the country to get an education. (BTW, that figure comes from my recent calculations during conversations with folks about the recent student loan forgiveness announcement.)

Basically, an educated society is better for everyone, but people in the US are generally selfish and childish enough to get actively angry if they're asked to help other people be more educated... or to help other people for any reason. It's like most Americans, or at least the most vocal, live in a society but think they are isolated from the world on a self-sustaining desert island or something.

I know this is beside the point, but I'd shop around a bit if I were you. It sounds like you're still very underpaid

So I've heard. But I don't really care. I'm single. My current salary is enough to pay my mortgage, all my bills, all my student loans, my food bill, etc. and still have enough to not only save, but donate. I give a minimum of $1,200 to St. Jude's every year, plus assorted charities and even random Twitch streamers who make music if I like what they do and they seem like decent people. In other words, despite everyone saying "you should try to get more money!", I'm currently making enough that I'm literally giving large amounts of it away to people who need it more than me.

TL;DR: I don't care about making "as much money as possible". I only care about making enough money to survive comfortably and help others when I can, which I'm already doing. In fact, I'm currently working towards switching careers, and in the process I'm more than willing to take a pay cut if the new job is more fulfilling; I can afford to.

I'd never fault someone for being content, and if there's a specific tradeoff you're making for that paycut, then more power to you

But otherwise- there's a difference between "trying to make as much money as possible" and "keeping a casual eye out to see if you could be making more money doing roughly the same thing you're already doing". Imagine if you could give twice as much to St. Jude's, or pay off your student loans completely, or both. There's a huge gap between being greedy and letting money rule your life, vs not giving it the slightest attention. It's worth putting in the baseline effort, especially if you're not having to sacrifice any of your other life priorities in the process.

Oh, sure. But that's the big caveat, isn't it? "If you're not having to sacrifice any of your other life priorities in the process." If attempting to go for the bigger paycheck leads to unemployment, then I won't be able to survive myself, let alone help others. Everything is a risk-reward analysis, but such an analysis requires an understanding of how likely each outcome is. If chasing the dollars is more likely to lead me to fewer opportunities, then it's not worth doing.

There should be no risk, though. Don't quit your job, just look around while you're still employed. Put in your notice if/when you accept another offer

The risk I'm concerned about isn't that my current employer will fire me. It's that if I switch to another job, I might not last long at the new employer.

That said, I'm doing the job switch thing anyway; not to get more money, but because I've grown to hate my career and am hoping to switch into a more creatively fulfilling one. If I can find such a job with a larger paycheck, of course I'll take it; but I'm also willing to take such a job with a pay cut if that's what's available to me in the new industry.

Fair enough, best of luck

Thanks! Good luck to you, too, in whatever endeavors are on your plate these days.

Well put.

It also makes zero fiscal sense to lose an experienced, onboarded and productive employee due to tiny/non-existent raises, to then have to spend more money finding, interviewing, hiring, onboarding, and pay the new person more- but companies seem hell-bent on perpetuating that cycle as well.

> In 2019, the college students surveyed by Clever expected to make $57,964 — about $10,000 more than the average starting salary at the time, which was $47,000. Just three years later, college students are expecting to make nearly $46,000 more.

Looks like a bad survey.. I don’t think I’ve ever met somebody in a non-tech or non-professional major who expects to make 100k+ at graduation

Graduated in 2020, and I was shocked by how few of my peers had done any research into the type of work and compensation that would be available to them upon graduation.

No, I'm not referring to the issue of 17-20 years olds choosing a degree path with little awareness of post-graduation opportunities, but for upperclassmen 0-2 years out from graduation. On the other hand, I can report a disproportionate awareness / interest in academia and grad school, but even in these cases I still rarely felt that these peers saw graduate school as a means to an end, looking beyond the masters degree, but more as a funnel, "the next to do I guess, idk."

I know a lot of people who go a Masters because they didn't want to get a job, then never worked in their field.

Precisely. I was trying to avoid sounding overly cynical of my own peer group, but there’s a lot of this. And as I was trying to get at in my main comment, I think it has to do with a tendency to avoid looking multiple steps towards questions like “what am I actually going to do with my education?”

That just makes the interviewer wonder why they didn’t get the terminal degree… unless the masters is the terminal degree (like an MFA)

Well. They were sold that. They were trapped in unplayable debt because of this promise. Are we going to blame the victims?

I'm happy to - SF is trying to lower the local voting age to 16, so being able to do a bit of research shouldn't be too much to ask for an 18 year old.

I have an idea. We make it clear that students can sue educators who do not inform them about the stupidity of taking on too much debt at a young age, and make "An Introduction to College, Adult Life, and Debt" a mandatory semester in all High Schools.

Not sure that students should be able to sue their high school for something like this. Why aren’t parents stepping in/up?

How would you avoid “my guidance counselor mentioned this, but they didn’t stress the importance?” My generation already struggles with the expectation of others to solve an individual’s problem - at the risk of sounding too cynical.

Suing your school does not seem like a good springboard into adulthood.

Or we just do what we do with other "dangerous" products like alcohol or tobacco and ban it for people under 21.

Scary warning labels on all college correspondence would be a nice start. WARNING: MAY LEAD TO A LIFETIME OF DEBT SLAVERY

I think the discrepancy between expectation and reality isn’t too interesting, but what is interesting is that this expectation wasnt there in 2019, so it’s a phenomenon new to the pandemic economy.

My first salaried job was 34k not that long ago. I make loads more but still. Grads deserve better pay than that especially in M/HCOL cities. Hell everyone does.

It claims salaries have increased only 35 percent. This seems incorrect to me. For example starting salaries for new developers where I would is roughly 30k (British pound) this is pretty much twice what I started on in 2006.

To be fair, salaries are crazy out there right now. Companies are desperate and job hopping can net you 30-50% more.

I think the other factor is all of these weird TikTok videos that just lie about things for views and clicks. And all of these influencers acting like they are billionaires. I think a lot of teens and college age people have pretty unrealistic expectations for life right now. This generation has been through some things with the pandemic, but there hasn’t been a recession in awhile beyond the Covid blip.

When I graduated unemployment was high so the advice was you are probably not going to get a decent salary out of college just be happy if you get anything and work your way up.

ah see, the employers underestimating the cost to exist as a human being in today's economy

My town in the Bay Area has always been considered one of the more "affordable" options (which is why we live here). The estimated cost of living to do more than just survive here is roughly estimated to be about $96,000/yr. That factors in rent / mortgage, food, transportation, etc.

So who are really the one's doing the poor estimating? The new college grads staring down the barrel of a career that will allow them to just skate by after paying the cost of living on top of their loans, or the companies making record profits but exploiting new college grads by paying less than a thriving wage?

"Pay your dues" is the cry of the exploiters who profit more from your labor than you do.

But "relatively affordable in the Bay Area" is still relatively very expensive nationally no?

Maybe the gap is just that the people surveyed overestimated their likelihood of working in a HCOL place (or the sample and/or population in question is legitimately biased toward that)

I can't imagine why new college graduates would want to torture themselves by moving to the Bay Area. It might have made sense 20 years ago, but now there are better options for the vast majority of people.

We can complain about the causes including lack of housing development, zoning laws, infrastructure, progressive politics, whatever. There are some important public policy issues that we ought to resolve. But the reality is that no matter what we do, the Bay Area is going to remain a shitty place to live for most new graduates. Unless you can earn very high pay, or have reliable access to cheap housing, my advice is to move somewhere else where you have a better chance to get ahead. Don't set yourself up for failure.

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