The Bay Area was hit hard, and startups stopped being sexy. Oddly enough, I'd say that it was a great time to make money if (a) you'd made the connections before the bust, (b) you were building something of substance like Google, and (c) you were willing to play a longer game. The upshot of a time when no one's getting rich quick is that there's more audience for get-rich-slowly strategies. Technical excellence tends to produce get-rich-slowly paths; it's viral marketing bullshit (and overhiring) that's behind many of these rapid-growth get-rich-quick startups. When people lose faith in charismatic nonsense, that's the time to drive hard with true excellence and lower-risk get-rich-slowly strategies. If your goal is excellence, you don't want your industry to be "sexy", because that brings in poseurs with zero competence but superior social skill, and they end up (a) getting all the resources, and (b) humiliating the whole industry when they fail.

Think also about Paul Graham. Y Combinator is a case of him monetizing a reputation that he earned (and, yes, he actually earned it) by standing up for startups in the depths of winter. I, for one, plan on making a strong and vocal case for Real Technology (it shall rise again) after the Snapchat/Clinkle frivolity blows up and humiliates the current cool kids. Being able to explain why shit went to hell ca. 2017, as it will, is going to help us make a case for building something better in the next iteration.

That said, it was a bad time for entry-level salaries, and graduate school admissions were ridiculously competitive in 2003-05. If you had a $60k offer (that'd be $72k today) you were in the top third of CS graduates, and non-STEM graduates were lucky to see $40k. I'd guess that the more experienced engineers didn't see a massive salary drop (maybe 10-20% at worst) but it wasn't a good time for job hopping. Certainly that feeling that one could get a 20% raise, just by walking across the street, died out.

It was a good labor market for finance because there was a lot of cheap talent. First-year Goldman Sachs analysts were only in the $60-65k range. (Bonuses could be 50-100%, but they were also working 60-110 hours per week.) Undergrad quants (that's rare but the positions exist) were generally getting $80-90k offers.

People expected housing prices to come down, but they didn't decline by much because there was this other bubble that was building at the same time...