Tech Salaries and Wealth Inequality

While you’re focused on labor, equity is a stronger driver of wealth inequality than labor wages. Yes, there are engineers clearing half a million dollars a year. That’s nothing compared to how the movement in equity prices affect wealth. For example, Microsoft’s CEO was given 2.5M in base salary vs 33M in stock [1]. A 10% movement in the price of Microsoft stock dwarfs his base salary. In the past 5 years, Microsoft is up over 300%. It’s owner’s equity, not salary, that drives inequality. Many front line workers don’t even quality for equity grants.

[1] https://www.geekwire.com/2021/report-card-microsofts-board-b...

I'd be more worried about the 0.01% and wealth accumulation.

This book influenced my thinking about that: https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...

It takes me more than 120days to staff a mid level software engineering position in my field. When I worked in manufacturing I could hire a darn good welder with NDT experience in 30days. I could staff with a temp who could read and follow weld and grind details on a print in less than 72 hours.

Market scarcity increases the value of a commodity.

What prevents the front-line workers to get a software engineering jobs? I know that not everyone should code, but for those who have the opportunity and intelligence for it and liking it, should.

SWE jobs are now favored among immigrants (poor and wealthy), because this is their only chance to make a dent in US living expenses. I am one of the poor immigrant (yes I know how it feels working $7.5/hr scrubbing a restaurant that just closed by the health department using bleach while kneeling all day), now having $300k TC, and my entire family are either divorced or single, and all female. I could send money to them in my home country and still have more than enough for me here. I definitely won't want to get paid lower.

You are worried about income inequality, which is hardly the same thing. Tech workers generally don't have discrete business or political goals that they use their money to influence to their advantage, even if they do have some low millions to low 10's of millions of nominal wealth.

What is more unsustainable, IMO, is the concentration of work. 3 out of 10 men and 4 out of 10 women over 20 year's age in the US are not working. Working far in excess of 40 hours per week is common. US vacation is still generally a paltry 2 weeks, non-mandatory.

And all this, despite continual improvements in productivity over the past century.

Couldn't we collectively reduce our working hours, have more vacation time, and employ more people? That would more fairly disperse the productivity gains of technology and improve many people's lives.

https://www.bls.gov/news.release/empsit.t01.htm

FYI, median software dev pay is $110k. Those high levels of compensation are uncommon. Most of the wealth inequality that is talked about deals with the 1% who will make more in capital gains or interest each year than those $400k devs.

That's not to say that support/facilities roles should be paid as low as they are. But the high pay is not as common as is represented. For example, I have 10 years experience, a MS, but make under $100k.

Lol if you're worried about that, now compare the C-Suite Exec salary to the average worker salary at large tech companies.

It's interesting to frame this in isolation as one group of workers against another versus looking at the larger market power and wealth accumulation dynamics that have driven us in this direction. I agree with the sentiment about sustainability, but don't think the framing points us in the right direction.

To make this concrete, I am less concerned about how much AWS pays its SWEs than I am about their market dominance making it so a huge number of workers who could have worked in a more humane business have no other choice because the competition has been crushed. Cutting SWE pay and redistributing to warehouse workers would result in 1) SWEs leaving and going to one of the many companies that continue to pay more for their rare skills and 2) a relatively small raise when distributed across warehouse workers, which would be eroded away by the bean counters over time since there is no employer competition left.

Wealth inequality is indeed unsustainable. You can see some of the output of that manifesting today.

In the short term basic income and better social safety nets are a stop gap.

In the medium term we can invest so much more in humans on planet earth. Just about anyone can learn to code. People still gatekeep it and say it's only for a special few. People used to say that about reading too. What coding even means gets simpler and simpler all the time. Some people argue excel is coding.

So we teach people to make anything and encourage way more startups, research, art, and culture (each wealth in their own way).

This is a little more nuanced. A lot of that pay is in risky stock that may or may not turn out to be worthless when it vests. It’s also a very limited number of engineers in the grand scheme.

Do you think if the engineers took lower salaries, that money would go to front-line workers instead?

The percentage of people making that amount of money is still pretty low. I'm more worried about what happens when those people making 300-400k a year automate those jobs. As far as sustainability, cost of living will be consistent with the middle class.

I think this is the primary reason why big tech likes to grandstand on woke issues. They get to be the "good guys" at virtually no cost and it's proven to be an incredibly effective distraction/misdirection from the real injustices/inequality of the sort described here.

Why wouldn't it be sustainable? Well-paid professions/roles have existed since forever. Income and wealth inequality have both existed since forever. We're talking all the way back to antiquity. Within what sort of timeframe would you consider something to be unsustainable?

Blaming the well-paid employees for what the others are getting paid isn't the way to go.

No company is incentivized to do what's sustainable for society

My 2 cents.

The main issue to be concerned about, that’s repeatedly and deliberately ignored IMO, is the workers’ actual buying power. Wage disparity doesn’t really matter: Kevin Durant or Elon Musk will always make probably 10,000 times in a year than I do, yet I live great. Our wage disparity isn’t a concern to me: they currently provide more value to the world than I do, and their paychecks reflect that.

The real issue is buying power. It doesn’t matter if the minimum wage is increased to 15 or 25 or even 100 an hour if that buys increasingly less. There’s little way to save and hide your money if inflation continuously robs you and harms the poor more than the rich, who have the ability to hedge against inflation.

Inflation is a stealth tax on the poor. People who live on the margins are screwed by their purchasing power being drained. We live in a time of very high inflation and the same old solutions demanded of “better pay” or more taxes on the rich are not a systemic solve.

The real transfer of wealth, and the real class-disparity has always been things related to inflation. Go back and look at old prices of houses, milk, candy, burgers, etc. Yes, people made less salary of course, but could easily afford a good life. Wages never keep pace with inflation.

A real systemic solve is addressing the things surrounding money that nobody talks about or dismisses IMO.

PS: that wasn’t my 2 cents. That was my 9 cents. In the time it took you to read this inflation increased the price. Maybe if you think about how that works in relation to purchasing power you’ll start to see the bigger issue.

What companies are you hearing offering 300k for non senior?

Yes. The more you close the gap, the less I will work.

High income != wealth inequality.

Wish you understood that. Wish everyone understood that.

First off, you're talking about income, not wealth.

Secondly, what the kids are calling "TeeCee" is an optimistic projection. A lot of people get randomly PIP-raped in the first year and aren't going to see that bonus or the equity. All it takes is for some scumbag in your management chain to knife you, and you're gonna miss out on a serious chunk of that TC.

Thirdly, private-sector SWE is a 10-year career at most. The insane time tracking, atrocious management, and abysmal code quality tend to drive people out, and even if they don't, the ageism is severe. You'll either pushed into political malevolency (that is, management, the job of enforcing the will of a bourgeoisie that should have been forcibly overthrown a generation or two ago) or unceremoniously kicked out.

Fourth, the numbers you're talking about aren't even that high. You can't even buy a house in the Bay Area on that kind of salary. Most of the truly high-paying jobs go to political manipulators and backstabbing social climbers, just as been the case for centuries before. The future never came--human society is the same shitpile it has always been, due to the world being run by a class of uncultured thugs.

All that said, you shouldn't feel guilty if you're in the position to get one of the few middle-class jobs that still exists. Make sure though that it's a real tech job (an R&D job where you're trusted to pick and choose projects, and can publish papers if that's what you're into) and not some Jira jockey nonsense that will cause your career to stagnate.