Why aren't we getting paid like lawyers? If they win $20M they will get paid at least $2M. But if we make a product that generates $20M profit, at best we get $20K bonus. This has to change!
-Software developers typically aren't comfortable negotiating, nor are we well versed at it. Therefore, we accept job offers for less than we know we are worth and accept raises offered rather than negotiate raises based on our actual performance. -We have no collective bargaining capability, and anyone can enter the field. In Canada engineers have a professional designation, the software industry is typically not a part of that collective. Lawyers have the bar exam to pass before they can practice. These restrictions restrict the labor supply in those industries to ensure higher wages. In our industry anyone can join, even foreigners, or employers can even outsource the labor to another cheaper country. This has the combined effective of raising the labor supply, and reducing our ability to negotiate as a group. -It is difficult to measure the performance from one developer to another. Look at sales as an industry, it is very easy to measure a top performer. If we were better able to demonstrate performance it would be easier for a developer to earn 50% more than his/her peers. Where I live some shops that hire refuse to pay even 10% more for a developer because they are filling head count and treat developers somewhat like a commodity.
The above realization has left me a little jaded. I love this field, but realize that I can earn more selling software than building software.
So, for those in the industry we need to find ways to add barriers to entry so that our salaries are protected.
This argument for professionalization is fundamentally flawed because salaries are not suppressed by an excess of supply. Just look at all the companies who constantly have open headcount. If wage suppression in our industry were caused by an excess of supply, you'd expect there to be lots of unemployed software engineers—but there are barely any. You'd never see firms trying so hard to poach from competitors and agreements like this would be totally unnecessary (nobody bothers to recruit passive candidates if people are queueing up to get hired).
So, this argument for professionalization is completely flawed. Professionalization imposes a price floor but we're dealing with a price ceiling (firms unwilling to pay the higher market rate). In such a scenario, a price floor is completely useless.
Personally, the day somebody demands that I get a certification to be a software developer is the day I quit developing and go put my econ education to use on Wall St. At least in finance there's a pot of gold waiting after all the hoops.
However, there is value in operating more as a collective. Employees are uniquely disadvantaged when negotiating for salary. Employers have experienced negotiators, they know their salary ranges as well as the industry. While the employee has only the knowledge of perhaps a few of his peers, if that.
A professional organization could aid employees in their negotiations. That would be a nice way to start. I'm not entirely convinced that a 'bar exam' for developers is the right path. But, clearly as this article states we are being taken advantage of. In my experience the problem is larger than SV.
And yet sometimes it's seems the norm to do so anyway, even if there is no apparent reason why they would "need" to do so
Remember the case, an engineer got lower wages just because he was from India? Also his boss was not allowed to offer him higher wages from the upper management.
The existing free market system is only free, if you understand it as "law of the jungle".
Don't forget either that lawyers don't just 'make money', they 'prevent loss'. That $20M suit that ends in your favour also comes with a nice injunction preventing your opponent from doing -foo- again. Techies can't do that.
Further, 240k for a data scientist isn't necessarily low, they are one of a team and the person who "made" Siri likely is paid much better (I could be wrong, as I do not know for certain).
In reality, your salary as a developer is unbounded. There are plenty of examples here of engineers who have built their own software product businesses that bring in orders of magnitude more than the number you quote.
If you're good at what you do, there's really nothing stopping you from going out and getting that lawyer money. You just have to step outside the conventional path a little bit.
Employer's have salary ranges they will pay. If you want above that range you need to be incredibly special for an employer to consider, ie. a public figure in the industry.
If you are willing to take considerably more risk than an employee and are the 20% or so of entrepreneur's that succeed then your income can be unbounded as you say. But, that's substantially different than salary, and not what the article and this thread is about.
However a lawyer who wins a case or a sale person who sells a big deal can easily point to the quantifiable win to a specific dollar amount.
Inequity, really has nothing to do with fairness. If the startup can't hire, they will offer more until they do hire (or go out of business or worse never achieve). What you can negotiate is based on your position. If you are ex-Google or Facebook you can make bank at a more established tech company looking to turnaround (cough.. cough.. Yahoo) or at a startup looking for "top talent" or get access to VC funding. It is the same dynamics you see in professional sports.
Is that really true? Their firm might get 2M. But in a big case, I imagine there are many lawyers and assistants involved. Sure the partners are going to do quite well. But, the founders of a tech firm also do quite well when their company receives a windfall of cash.
The Yahoo COO who just got let go was paid $109 million in two years. He got a $29 million severance package. Would it be too crazy to suggest that maybe a brilliant engineer who was a major contributor to the success of a problem is worth more than $100-250k a year?
This is why traders and IT devs on Wall Street get better compensated: it is way easier to see the exact impact and it is very likely that those guys would be able to easily replicate it in any other firm.
If all software developers had the social skills of traders, we would indeed be paid much more than what we are now.
The issue isn't the absolute level of compensation, but the relative split between labor and management/capital. Exploitation is exploitation: a Roman house slave, though better than the majority of slaves, is still exploited and still a slave.
And why are you complaining about engineers wanting to get paid closer to the value they provide the company? It's no skin off your back: sure, it might eat into shareholder and upper management salaries, but they get paid in the millions, which even more people would kill for.
Every economic function involves risk, to both labor and to capital. There's no reason, however, that the majority of the value should go to capital. The economics of relative scarcity, possibly. But that's not the situation here: market forces didn't decide compensation packages and the return to capital, here. Collusion did, which is a distortion of the market from a situation of perfect competition.
Is there a similar career path for engineers in any tech company that is the equivalent of "making partner" in a law firm? Genuinely curious.
On the other hand, have you asked any newly minted lawyers about their "career path" recently?
Or is it that specialized lawyers can make $350+/hr? In which case developers with certain specialities can make that much as well.
Also, the mode compensation for a lawyer is only like 55,000. The low population, insane compensation segment drags the mean way up.
The only real solution to this problem that I can see is for each of us to be so super smart and accomplished that we have the capacity to make a significant contribution that not many others can. And then develop the social skills to demand the kind of money that we (fairly) think we deserve.
Now, regarding your proposed solution of becoming a master of rare and difficult skills. That's what I strive for, but that can be a challenge in an industry where technologies are replaced every 5 years or so. In reality it becomes that much harder because unlike other professions the mindset of employers does not respect the concept of 'superstars'. Ie. I can't really name a developer that has the ability to command a 50% premium over his peers. However, I can name several companies that can demand a price premium for their consulting services. So, how do we as a field make the shift from companies achieving a price premium to individuals achieving a salary premium?
As an engineer, there is no such clear path. Most engineers end up working for 8 years and at the end are only making 150-250k if they are competent. Even if you make it to the management/architect level, you are looking at 250-400k.
Software Engineers are sadly not compensated fairly for the massive value they add to the economy. That's the bottom line. We need to work together to change it.