context: https://twitter.com/typesfast/status/1536406121249796096<p>I'm new to this field and always thought that SWE (at least the good ones) most definitely add value in exponential multiples over the 400k value but maybe I'm delusional by all the VC speak over twitter. Does he have a point and that we're mostly overpaid? Hope to hear some good points from experienced devs.
I don't think his tweet is saying SWEs don't deserve 400k. He's saying some business models are not viable at that price. So in relation to his tweet that's not wrong. If your medical business needs to hire doctors for 20k/yr to be viable then you don't have a business. At the end of the day that's no different than a child saying they're going to start a money tree business so they can just pick money off the trees and be rich. If you can drive the cost of doing business and your inputs toward zero almost any business idea could theoretically make a profit... but real markets are not so accommodating.<p>In relation to your question: no, 400k/yr is not overpaid. Software is an extremely scalable business where the marginal cost of every copy beyond the first is nearly zero. Lots of companies selling software (or relying on custom software as their competitive advantage) make far in excess of 400k off each engineer's labor. Plenty make millions per engineer, even after subtracting all other costs and non-engineer compensation. Companies don't pay 400k, 800k, or more to engineers out of charity. They do it because it is profitable.
No. Ryan is not saying anyone is overpaid. He's saying that many business models are impossible.<p>The market is saying that those business models shouldn't exist.<p>This is true no matter what the number is. Slave labor enabled the American South to deploy business models that are impossible today. Doesn't mean it was good.
I'm frankly super confused about salaries right now. Currently job hunting in Europe and the other day when a recruiter asked how much I was looking for I gave my current salary as a minimum of 65 euros/h and the recruiter kind of chuckled and told me that if I'm a good match I could ask for like 90. Okay, sounds great. So a few days later I was having an initial interview for a senior ML position and when asked how much I expect (recall this is Europe so let's generously divide the US salary by 4) I said 100k. From my point of view I'm still low balling it because I wanted the job, but apparently this was far too much because the interviewer was incredulous and basically ended the interview on the spot. Told me that was more than they pay any of their senior positions.<p>Doing the rough math, 60 euros/h, 8 hrs per day at 48 weeks > 100k. So yeah. I just don't know what to say any more when this question comes up. It seems to be random to me what is going to be an acceptable answer. Usually I want to continue the conversation and discuss it, but instead it just seems to cut things off immediately.<p>I find it really frustrating that they make you guess what they are thinking and then either laugh or act like you're some kind of high roller. I mean, I need a job, so like, if you're going to choose me based on my ability to pick a random number you are thinking in your head, how about we do that at the beginning of the interview instead of talking for an hour first and giving me the impression that things are going well?<p>In any case, just ranting. What's a good rate for a senior SWE or ML engineer in Europe these days? What can I get away with asking for without getting this reaction?<p>Also, what's up with people asking this question in the first conversation? I feel like in the past you would go through a couple of rounds and then get to discussing what <i>they</i> could offer <i>you</i> but now it seems to be the other way around, and they are not willing to counteroffer if you guess wrong. Maybe just my perception, but I find it weird and difficult. I'm always fine and more or less comfortable in interviews until this question comes up.
The author isn't saying that $400k is overpaid, they're saying that not every company can afford to pay $400k. Which sounds very reasonable to me.<p>If your company can afford to pay $400k and the market is competitive - great, hope they pay you even more in the future. From a personal point of view, you're never overpaid - the more, the better. But what makes sense for the company is a different question, and only some companies will be able to afford those salaries.
Depends entirely on the specifics of the job and the location of dev. Salaries are often determined partially by the cost of living for the employee, which varies from one place to another. I know, for instance, that people on my team at work make more than me for the same job simply because they live in NYC, which has a higher cost of living than I do here in suburban south Florida.<p>My personal philosophy about money is often ridiculed, but the way I see it, if you have enough money to live happily and healthily (and support your family, if you have one), then you're being paid enough, and anything above that is just a bonus cherry on top. I know my salary is lower than some devs would ever accept, but I'm a single guy, so it's more than enough for me to pay my bills, have a house and food, and even some luxuries, and still save for emergencies and the future. Everything on top of that I donate to charity because others need that money far more than I do.<p>But as I said, it's a personal thing, and many people would call me crazy for it, so... it's up to you to decide what you think a fair payment is and then find an employer who's willing to negotiate a comparable salary with you.
Once upon a time when I was a young pup, I was the sole engineer dedicated to a product with top line revenues of $60MM+/year. There were probably a dozen other engineers working on supporting and critical infrastructure that was used for that product.<p>I made $75,000 / year, in a major US tech hub.<p>So my point is - get it man. Enjoy the remote work and the big salaries and RSUs and all of it, because the generations that came before you worked darn hard to push so that you'd get all of this.
Consider:<p>Upward pressure on our salaries is in large part driven by the compensation packages given at Google and Facebook, etc.<p>Those compensation packages can be that high because they've tapped into (and in large part monopolized) absolute firehoses of revenue in the form of online advertising. Those companies do "other" things than advertising, but advertising makes up the vast majority of their revenue.<p>Without it, they could not compensate so highly.<p>The problem comes from the fact that these companies eagerly hoover up all the engineers they can get. And rarely to actually work on the core advertising and ad-tech portions of their business, but literally almost anything. There's very little that Google doesn't do. And they're always starting to do new things.<p>So upward pressure is applied on compensation across the whole job market. And Google at least seems to always be hiring.<p>Also, Google will happily pay $400k for a SWE if it means that SWE is not creating new revenue sources for potential / future competitors. The cost to them is minimal compared to the revenue they make.<p>I leave it as an exercise for the reader what this does to the health of the industry as a whole.
He clarified later: <a href="https://twitter.com/typesfast/status/1537151707141918720" rel="nofollow">https://twitter.com/typesfast/status/1537151707141918720</a><p><pre><code> My point was not that engineers are overpaid. That's not for me to judge. Only that many business models won't support those rates. That's the CEO's fault not the engineers. See for example: https://twitter.com/typesfast/status/1537151707141918720/photo/1
</code></pre>
His original statement ("It might be that many software business models don't work when engineers cost $400k/year.") is pretty obvious.<p>Suppose you have a website that caters to competitive Mahjong players, and earn revenue based on a combination of pro subscriptions, micropayments, adverts, and sponsorships. If your Trailing Twelve Month revenue is $120K, you couldn't afford an engineer who costs $100k/yr, much less $400k.
Your cost to provide the service (i.e. your minimal cost to exist) is probably somewhere around $30k.<p>The value you deliver depends strongly on the company but can easily be orders of magnitude above $400k.<p>Everything in between is a matter of negotiation, supply and demand. If there are enough companies that can make their business model work at $400k to hire all the capable engineers at $400k, then the business models that can only pay less won't work, just like many other unprofitable business ideas don't. That is not a sign of a problem.<p>Quite the opposite, actually. If that is the limiting factor, it means that the demand is very elastic, i.e. if there is an increase in supply, prices (salaries) will not drop too much.
What does 'overpaid' mean?<p>Businesses don't pay more than they have to. If a company offers 400k for a job it means they think the person is worth it. If not, the person will likely be fired at some point...<p>That's all there is to it in a free market, really.<p>Edit:<p>The conclusion is that either:<p>1. They know what they are doing, which means you will generate more value than they pay you whatever they offer (as mentioned I PaulHoule's reply below).<p>2. They don't. If you think the pay is massively inflated then enjoy it whilst it lasts, because it won't.
I wouldn't begrudge a SWE who makes $400K, especially if they live in California with their outrageous cost of living. Most workers in the US are woefully <i>underpaid</i>. Wage growth has been mostly stagnant since 1975 while productivity and profits trend ever upward.<p><a href="https://www.epi.org/publication/charting-wage-stagnation/" rel="nofollow">https://www.epi.org/publication/charting-wage-stagnation/</a>
Probing questions, by me, here: <a href="https://twitter.com/jugurthahadjar/status/1537135901024845824" rel="nofollow">https://twitter.com/jugurthahadjar/status/153713590102484582...</a><p>The person claims to have <i>neither</i> salary[0] <i>nor</i> equity[1].<p>- [0]: <a href="https://twitter.com/typesfast/status/1536703876505735168" rel="nofollow">https://twitter.com/typesfast/status/1536703876505735168</a>, "I don't take a salary".<p>- [1]: <a href="https://twitter.com/typesfast/status/1536735397644050432" rel="nofollow">https://twitter.com/typesfast/status/1536735397644050432</a>, "I also dont earn any equity for working here."
The first job I had out of school billed me out for $325/hr. That's a high rate for a high level lawyer. Unlike lawyers, they were able to bill me out for almost every hour I was at work, which comes out to about $650k/yr. I made a small fraction of that.<p>Were we better organized, we engineers would take a much greater portion of the profits we generate. After unionizing, professional athletes are paid about half of what they directly generate. Before unionizing they got peanuts.
There is no such thing as overpaid, by definition. You are paid as much as you are paid.<p>The only time you are “overpaid” is when the payments department makes and error and wires more money to your account than your contract entails you too.<p>Baring that corner case you are paid whatever amount you negotiated. If the employer feels like they’re not getting a good deal, they’re welcome to seek recourse within in confines of the law.
No, in the pure market sense that enough businesses have decided to target the same pool of workers and can afford to pay them that much.<p>Yes, in the sense that most businesses can't justify that cost and that lots of SWE's make more than enough for their desired lifestyles at much lower TC.<p>But it's nothing new. 20-30 years ago, there was a comparable spread between SWE's who took jobs in finance companies vs the rest of us. A new top-school grad could get a job at Goldman Sachs out of college for 2-4x what someone working in most other software fields would earn because technical innovation in that space was intensely competitive and they desperately needed more hands on deck. Eventually, that divide largely evened out and the ostensibly "overpaid" sector moved to new technical frontiers.
If I feed my talented monkey 1/100 of the bananas he grabs for me, some hungrier monkeys will argue I'm overfeeding him. I may be greedy and replace him, or keep him because I'm rich enough that it makes a negligible difference.
My honest opinion. If you are profitable and not burning free VC cash, pay whatever you want by all means including $1m/Year if you want/can. But if you are using Free/VC money and you are deeply underwater, throwing 400k or whatever is not something you should do just to compete. I think it is unfair to legit businesses that have to work with what they got vs the cool startups. Yea I am a bit salty but being honest.
If you bring less than 400k to the table — you’re overpaid. Else — otherwise.<p>This is why same skill level people get different salaries in different companies.<p>Yes, some companies overpay hoping for rapid growth. Others - underpay, accounting for risks or just because they can (like in Europe).<p>It’s obvious. As obvious as overfunded startups with worthless business models out there.<p>But without an army of unknown musicians there would never be Mozart.
It depends. Goog and Meta pay good engineers (SWE/SREs) twice that and more.<p>For engineering managers, 3-5x that and more.<p>Edit: People gotta hate on those who bring home the bacon. America is one of the least fair countries in the world because it's excessively unconstrained in some areas and missing fundamental services other countries provide.
Nobody is overpaid. Salaries, live everything else, follow a trend of Supply and Demand. Currently SWEs are on high demand pretty much everywhere in the world and salaries reflect that.<p>What should we do? Educate/Train more SWEs!
I find his response about $400k paid people and marx a bit odd. More money going to the people actually doing the work vs. the top would certainly be right up Marx ally.<p>I assume that guy is among those who views everyone earning above average at any time as part of the problem.
all the tweets reply to Ryan is hilarious.<p>i don't believe Ryan is saying SWE shouldn't get 400k. some business model just can't afford it and i agree.<p>i work for a "traditional" mid size company. a small/mid size company will have a hard time offering 400k for a SWE
is 400k driven by the tech bubble?<p>is 400k still viable? when companies like coinbase, shopee, tesla...etc. is laying off people or hire freeze. the current events is giving me the dotcom bubble vibe.
At some point we'll find a new equilibrium.<p>Everybody is currently so desperate for this talent, there's been a big shift toward remote work meaning competition that used to be highly localized is now everywhere, and giant companies are on hiring tears so it's driving up the market rate for the talent and companies that can't afford that are having a huge problem hiring.<p>We're already seeing the knock on effects of this as contracts with IT vendors come up for renewal and we're being charged XX% more this year for no marginal benefit from what we had last year.<p>At some point the customers of those companies can no longer afford their products at the rates they have to charge to pay engineers that much and hiring freezes, layoffs and pay cuts will start happening. Until then everybody's trying to suck as much money out of the system as they can - that's just capitalism.
I think it's pretty funny when libertarians or conservatives all of a sudden start sounding like Marxists and claiming that of course workers (engineers) should be entitled to part of the value they produce, when it's their own salary they're talking about.<p>$400k is also way way more than any engineer will earn in most countries except USA, and maybe it's exceptional in most US states too? For context, it's about twice what the Swedish prime minister makes, and $70k per year is considered a high salary for senior developers in Stockholm.<p><a href="https://www.unionen.se/rad-och-stod/om-lon/marknadsloner/systemutvecklare?active-tab=0" rel="nofollow">https://www.unionen.se/rad-och-stod/om-lon/marknadsloner/sys...</a>
CEO thinks workers performing essential function are overpaid, and worry that their business can't work as well if they have to pay so much.<p>News at 11.
consider three things:<p>1. market consolidation. A lot of cashflow-negative tech companies are going away.<p>2. automation. This is still out there, but eventually industry will find a way out of the software swamp.<p>3. competition. At some point, the US and China are going to square off. Instead of WW3, an agreement will be hammered out that likely results in Chinese tech companies getting back their access to US markets. And, the world is very busy graduation devs.<p>add these up and its buh-bye to the golden age of dev comp, its more amazing that it has lasted so long<p>devs in the future will make less than tree trimmers