If middle class means the choice to own your own home, then the maybe tech workers stayed middle class and everyone else dropped right out of it.
I'm concerned that homeownership and retiring locally are luxuries now. American culture is already far too fractious these days. We don't need to jeer at people for being able to afford roots in their local communities.
> If middle class means the choice to own your own home, then the maybe tech workers stayed middle class
The average tech worker has not been able to afford a house in SV for at least a decade now. So by this definition, the average tech worker in SV is lower class.
> I'm concerned that homeownership and retiring locally are luxuries now.
I don't know about retiring, but home ownership is certainly still widely possible outside of SF, LA, and the other usual suspects.
> We don't need to jeer at people for being able to afford roots in their local communities.
If it's any comfort, I don't think the majority of residents of SF/Bay currently were born and raised there. More likely, they moved there for work. How many people were actually born and raised in places like Palo Alto, MTV, or even SF a generation ago?
Remember, MTV before the tech boom was a rather sleepy little suburb...
Note that this report is in terms of percentages, which don't track what's happening to individuals. Population growth and turnover (as people move, retire, or join the workforce) mean that it's possible for average wages to decrease largely due to new low wage jobs filled by newcomers, rather than wage decreases for people already working in Silicon Valley. Someone would need to dig deeper to figure it out.
This trend towards inequality is still not good. The percentages do show that.
Or the mid-range jobs move out of the Bay Area because of the high cost of living?
I grew up in the Bay Area but there's a snowball's chance in hell I could ever go back due to what it costs to live there...just to rent a bedroom from some homeowner would cost more than the two bedroom apartment I currently live in.
> Tech companies are spending a large portion of their capital toward paying a limited number of research and development staff to design new products and software, but not toward maintenance and service staff like factory and maintenance workers
The entire article and everyone it quotes then proceed to argue that this wealth should be redistributed downwards.
This is not just unfair - it will also never work. Because some roles (like "low-skilled maintenance and factory work") have far more candidates than openings, while other roles (like high-skilled engineering) have the opposite supply/demand curve.
Now, suppose every single company starts artificially inflating the wages of low-skilled roles, and suppressing the wages for high-skilled roles, to keep everyone "equal" just like this article suggests. What will happen?
Nobody will invest the huge amount of time and effort required to become engineers, since that investment won't pay off. Why waste 4 expensive years in college, if I can get the same pay as a janitor, straight out of highschool and without the student debt?
All tech companies will become desperately starved for high-skilled talent. Eventually, one of these companies will realize it can fill its many vacancies by decreasing the wages for the low-skilled work (with huge surplus of candidates, it will still have plenty to choose from) and increasing the wages for high-skilled work, where candidates are scarce. This company will fill all its openings, poach the best engineers, increase its profits, and destroy its competition. At that point, all other companies will have to increase high-skilled pay to match... And we'll be back where we are right now.
In fact, that's how we got here in the first place.
>To improve workers’ wages across the board, the report calls for local and state government to support workers’ rights to organize, adopt better labor standards for subcontracted workers, increase taxes on corporate headquarters and provide affordable housing.
All of this seems reasonable and structural to me, ie it maintains a level playing field for businesses.
That logic should also work in reverse: If high-skill talent is rare their wages should rise. I do not see that happening. Well, at least not here in Germany. Industry is crying about a skill shortage but the corresponding wages are stagnant.
My theory is that wages are not that much about demand and supply of skill or labor. More evidence is that wages differ so much regionally. A Silicon Valley software engineer is paid more than a Montana software engineer even if skills are equal. The companies are willing to pay the premium so their engineers are close to the headquarter. The startups need to be close to the venture capital, but I still wonder why the big companies stay there. Why don't Google and Apple move away?
Google has 88k employees and had a $32B revenue last quarter. Let's assume 25% of employees are R&D, each paid $250k/y: Google would spend $5.5B a year on R&D, or 4.2% of revenues ; not quite a "large portion of their capital".
I don’t know if this is has evidence in data but is the income distribution for SWEs becoming increasingly bimodal? A range for individuals outside of elite tech companies and a range for individuals within it who have reaped the rewards of appreciating tech stock?
If anything, I'm seeing the opposite: non-"elite" tech pay is increasing to rival "elite" tech pay (since that's the only way you can hire a decent engineer in any of the major tech hubs in the US).
If you are a Software Engineer you are likely in the top 10%. Just mentioning this because I saw a thread in /r/programming the other day and some Software Engineers actually thought they were not in the top 10% of Americans when it comes to salary.
It can be frustrating to read HN sometimes when it feels like you're the only one making under 200k. I do wonder how many engineers realize how astonishingly well paid they are compared to, say, their kid's teacher.
I work remote in a rural western state, I make closer to the national average for an SE than the SV worker. I ran the math once in my county and found that I was in the top 1% wage earners for my county.
This isn't necessarily true in Canada. The top 10% of "working-age" Canadians earn around 100k/year, and there are lots of software engineers who get paid less than that.
The top 10% individually was 108k in 2017. The median software engineer was making 107.6k in 2017.
So, on a technicality you are wrong - most software engineers are not in the top 10%. But even if you were right, there is a wide range of pay for software engineers, so it should not be surprising that some of those getting paid less will comment.
If you’re a software engineer,
you’re likely in the middle 30% of whatever city you live in. Which, if it’s the Bay Area, probably does mean the top 10% of America.
As a software engineer, I make approximately the median income for my county. I don’t know who these top-10% tech workers are, but they’re certainly not my colleagues.
> As a software engineer, I make approximately the median income for my county. I don’t know who these top-10% tech workers are, but they’re certainly not my colleagues.
They are at FAANG companies. Engineers there with 5+ years of experience are pulling down more than $200k total comp in most roles, and many of them make a bit more than that.
You are likely wildly underpaid then. I live in a fairly affluent area and right out of college I started above the median income for my city, which was considerably higher than the median income for my county.
You clearly don’t work in the area the article is about them, do you? It sounds like you likely don’t even live in the same country, let alone that specific region of that specific state.
“STILL WALKING THE LIFELONG TIGHTROPE:
TECHNOLOGY, INSECURITY AND THE FUTURE OF WORK” by
Chris Benner, Gabriela Giusta, Louise Auerhahn, Bob Brownstein, Jeffrey Buchanan
As a relatively high-earning person in tech, let me say again: Please tax me and people like me (or wealthier) more. Please, please, please. I'm a greedy capitalist, but income disparity hurts everyone and our country would be such a more pleasant and productive place if those at the top would express just a shade more generosity by supporting their fellow citizens.
Taxing wages doesn't seem like a very smart strategy. You probably feel rich, but if your primary source of income is wages then you aren't. This won't solve income disparity as it's not how wealthy people earn income. It really will hurt the middle to upper-middle class without making a huge difference.
If you want to do the most with your apparently surplus income, look into effective altruism. Your dollar will go a lot further with <take your pick of 1,000 charitable organizations> than it will after going through 10 layers of bureaucracy.
The great thing about is you can start doing it today - you don't have to wait for a gridlocked, highly polarized federal legislative body to come to some pork-filled "compromise".
Just move to an EU country? Over here for any senior software professional the net salary is half of the total salary cost. 50% it is. Dissapointingly it doesn’t convert to exceptional public services or social mobility. It just indicates that one is not connected enough or not born high enough to be above the employment contract relationship.
Can you explain how income disparity hurts? Just using that measurement alone it can distort the ground reality. To list a couple high wealth disparity countries: Singapore, US, and North Korea. Clearly one of them is not like the others.
I think you might come to regret such an attitude when you find out your too old to be hired and age discrimination kicks in. You might take job security for granted now, but there's no guarantee that software engineering will be in high demand forever.
When you get older, you'll be left with whatever meager amount you've earned. If I were you I'd start saving, rather than reveling in your seemingly high salary.
Please tax me and people like me (or wealthier) more.
You can pay more tax than you do now, voluntarily -- there's a place for it right on your 1040 (if USA). If thus statement is sincere, you should be doing so already.
The State of California is already showing annual surpluses.
But in any case you will note that both your Federal and State tax forms permit a voluntary donation beyond what you owe ..do you take advantage of this?
How would a Post-Capitalist Silicon Valley be different from today?
And what if everyone in Silicon Valley started practicing shamanism?
And/or anarchism?
What things would companies measure instead of or in addition to money & attention?
What if tech leaders & workers joined together in saying "We peacefully revoke consent to be governed this way and request immediate transformative justice." (Or something more effectively worded than that)
Serious advice: you're using your brain wrong. Find something better to do with it. Questions which start with "what if everyone <insert verb here>" are bad questions. People will always behave in diverse, contradictory, and conflicting ways. We've been doing that pretty much since the Cambrian explosion, and we're not going to stop any time soon. Asking what would happen if we did is useless -- like asking what would happen if gravity reversed, or if black was white and white was black.
If you're vexxed by income inequality and consumerism and environmental degradation and such -- as I am -- then it's best to pursue avenues of enquiry and develop theses which aren't fundamentally impossible from the fifth syllable onwards.
If you're asking seriously.... I think there's serious potential for co-ops. There's no reason services like Yelp need to be designed around a hockey stick revenue curve.
A Silicon Valley that counted its value in the amount of happiness it created for people using its products (and perhaps even for people who don't use their products) instead of the amount of financial value it extracted from them would be a very different place indeed.
The older I get the more I feel like capitalism is a system for turning human misery into profits for a lucky few.
> How would a Post-Capitalist Silicon Valley be different from today?
What's interesting is that I don't think the day-to-day of it would look very different. Extremely hierarchical corporate structures don't work very well in small scale unless you have phenomenally charismatic (or even rarer, actual top-of-field domain expert) leaders. As an incentive to bring folks into the space, varying degrees of group ownership and power are offered to the founding set (and founding investors, which are often an integral part of the early business).
In a very real sense but perhaps to a lesser total degree, this is (as the syndicalists love to put it) "the workers owning the mill they operate."
What's also interesting is that as the company scales, this approach is considered increasingly untenable (mostly from a profit-generation standpoint) and a more absolutely hierarchical system emerges. But nearly everyone has the opinion that these corporate structures are awful, inefficient beasts that create incentives for parasitic management, outsized rewards for C-sets who may or may not provide actual value, and a constant conflict within the workforce to avoid being trivialized by the desire to increase efficiency over product quality or market share.
There was a pair of papers recently that I really enjoyed investigating what "fractal" community (and by obvious extension, corporate) structures could look like by De Florio & then Pajaziti:
These delve into how one can build service organizations around non-traditional (e.g., not-straight-line-to-the-top-always-centralized) structures and how these can actually have deceptively better efficiency even if their outcomes are only statistically predictable.
It's worth noting that these sorts of organization styles are not untested in the valley. The biggest success for such an organization I can think of off the top of my head is Google's technical support and loaner laptop system, which is semi-fractal and horizontal and despite looking like it'd be a huge money pit (from the traditional "control outcomes and limit loss" school of IT management), is actually dramatically cheaper than traditional IT departments at its scale. Data driven organizations often naturally push towards open and relatively flat org structures, with the understanding that the overhead of abuse of such system's leniency is much less expensive than the total expense of minimizing said abuse.
This isn't isn't exactly new, we see echos of the "actually the chaotic version of this over resources that are infinite in principle but constrained in a time domain is not much worse than the perfectly scheduled system" principle in lots of fields. Market economics likes this outcome (although not when you start making them own "externalities" like environmental damage). Network engineers have long ago made their peace with this truth, as well. A randomly scheduled network is only about 1/3 worse than an optimally scheduled network!
[+] [-] humanrebar|7 years ago|reply
I'm concerned that homeownership and retiring locally are luxuries now. American culture is already far too fractious these days. We don't need to jeer at people for being able to afford roots in their local communities.
[+] [-] dunpeal|7 years ago|reply
The average tech worker has not been able to afford a house in SV for at least a decade now. So by this definition, the average tech worker in SV is lower class.
> I'm concerned that homeownership and retiring locally are luxuries now.
I don't know about retiring, but home ownership is certainly still widely possible outside of SF, LA, and the other usual suspects.
> We don't need to jeer at people for being able to afford roots in their local communities.
If it's any comfort, I don't think the majority of residents of SF/Bay currently were born and raised there. More likely, they moved there for work. How many people were actually born and raised in places like Palo Alto, MTV, or even SF a generation ago?
Remember, MTV before the tech boom was a rather sleepy little suburb...
[+] [-] dublidu|7 years ago|reply
[+] [-] skybrian|7 years ago|reply
This trend towards inequality is still not good. The percentages do show that.
[+] [-] UncleEntity|7 years ago|reply
I grew up in the Bay Area but there's a snowball's chance in hell I could ever go back due to what it costs to live there...just to rent a bedroom from some homeowner would cost more than the two bedroom apartment I currently live in.
[+] [-] OnlyRepliesToBS|7 years ago|reply
[deleted]
[+] [-] dunpeal|7 years ago|reply
> Tech companies are spending a large portion of their capital toward paying a limited number of research and development staff to design new products and software, but not toward maintenance and service staff like factory and maintenance workers
The entire article and everyone it quotes then proceed to argue that this wealth should be redistributed downwards.
This is not just unfair - it will also never work. Because some roles (like "low-skilled maintenance and factory work") have far more candidates than openings, while other roles (like high-skilled engineering) have the opposite supply/demand curve.
Now, suppose every single company starts artificially inflating the wages of low-skilled roles, and suppressing the wages for high-skilled roles, to keep everyone "equal" just like this article suggests. What will happen?
Nobody will invest the huge amount of time and effort required to become engineers, since that investment won't pay off. Why waste 4 expensive years in college, if I can get the same pay as a janitor, straight out of highschool and without the student debt?
All tech companies will become desperately starved for high-skilled talent. Eventually, one of these companies will realize it can fill its many vacancies by decreasing the wages for the low-skilled work (with huge surplus of candidates, it will still have plenty to choose from) and increasing the wages for high-skilled work, where candidates are scarce. This company will fill all its openings, poach the best engineers, increase its profits, and destroy its competition. At that point, all other companies will have to increase high-skilled pay to match... And we'll be back where we are right now.
In fact, that's how we got here in the first place.
[+] [-] sulam|7 years ago|reply
>To improve workers’ wages across the board, the report calls for local and state government to support workers’ rights to organize, adopt better labor standards for subcontracted workers, increase taxes on corporate headquarters and provide affordable housing.
All of this seems reasonable and structural to me, ie it maintains a level playing field for businesses.
[+] [-] qznc|7 years ago|reply
My theory is that wages are not that much about demand and supply of skill or labor. More evidence is that wages differ so much regionally. A Silicon Valley software engineer is paid more than a Montana software engineer even if skills are equal. The companies are willing to pay the premium so their engineers are close to the headquarter. The startups need to be close to the venture capital, but I still wonder why the big companies stay there. Why don't Google and Apple move away?
[+] [-] alcio|7 years ago|reply
Google has 88k employees and had a $32B revenue last quarter. Let's assume 25% of employees are R&D, each paid $250k/y: Google would spend $5.5B a year on R&D, or 4.2% of revenues ; not quite a "large portion of their capital".
[+] [-] paulsutter|7 years ago|reply
> increasing concentration of company profits going toward the salaries of a select few
[+] [-] liftbigweights|7 years ago|reply
[+] [-] dgoldstein0|7 years ago|reply
[+] [-] akhilcacharya|7 years ago|reply
[+] [-] jefftk|7 years ago|reply
Dan Luu has written some about this: https://danluu.com/bimodal-compensation/
[+] [-] dunpeal|7 years ago|reply
If anything, I'm seeing the opposite: non-"elite" tech pay is increasing to rival "elite" tech pay (since that's the only way you can hire a decent engineer in any of the major tech hubs in the US).
[+] [-] friedman23|7 years ago|reply
[+] [-] CalRobert|7 years ago|reply
[+] [-] bowlich|7 years ago|reply
[+] [-] cperciva|7 years ago|reply
[+] [-] Eridrus|7 years ago|reply
So, on a technicality you are wrong - most software engineers are not in the top 10%. But even if you were right, there is a wide range of pay for software engineers, so it should not be surprising that some of those getting paid less will comment.
[+] [-] drb91|7 years ago|reply
[+] [-] closeparen|7 years ago|reply
[+] [-] didibus|7 years ago|reply
[+] [-] akhilcacharya|7 years ago|reply
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] closeparen|7 years ago|reply
[+] [-] twblalock|7 years ago|reply
They are at FAANG companies. Engineers there with 5+ years of experience are pulling down more than $200k total comp in most roles, and many of them make a bit more than that.
[+] [-] aidenn0|7 years ago|reply
[+] [-] djrogers|7 years ago|reply
[+] [-] jt2190|7 years ago|reply
“STILL WALKING THE LIFELONG TIGHTROPE: TECHNOLOGY, INSECURITY AND THE FUTURE OF WORK” by Chris Benner, Gabriela Giusta, Louise Auerhahn, Bob Brownstein, Jeffrey Buchanan
http://www.everettprogram.org/main/wp-content/uploads/TIGHTR...
[+] [-] OUTLANDISH04|7 years ago|reply
[deleted]
[+] [-] chasing|7 years ago|reply
[+] [-] nightski|7 years ago|reply
[+] [-] d357r0y3r|7 years ago|reply
The great thing about is you can start doing it today - you don't have to wait for a gridlocked, highly polarized federal legislative body to come to some pork-filled "compromise".
[+] [-] expertentipp|7 years ago|reply
[+] [-] whb07|7 years ago|reply
[+] [-] pascalxus|7 years ago|reply
When you get older, you'll be left with whatever meager amount you've earned. If I were you I'd start saving, rather than reveling in your seemingly high salary.
[+] [-] pteredactyl|7 years ago|reply
Giving the government more money is not the answer.
[+] [-] masonic|7 years ago|reply
[+] [-] djrogers|7 years ago|reply
[+] [-] claydavisss|7 years ago|reply
But in any case you will note that both your Federal and State tax forms permit a voluntary donation beyond what you owe ..do you take advantage of this?
[+] [-] meddlepal|7 years ago|reply
[+] [-] crawfordcomeaux|7 years ago|reply
How would a Post-Capitalist Silicon Valley be different from today?
And what if everyone in Silicon Valley started practicing shamanism?
And/or anarchism?
What things would companies measure instead of or in addition to money & attention?
What if tech leaders & workers joined together in saying "We peacefully revoke consent to be governed this way and request immediate transformative justice." (Or something more effectively worded than that)
[+] [-] nkoren|7 years ago|reply
If you're vexxed by income inequality and consumerism and environmental degradation and such -- as I am -- then it's best to pursue avenues of enquiry and develop theses which aren't fundamentally impossible from the fifth syllable onwards.
[+] [-] drb91|7 years ago|reply
[+] [-] 13of40|7 years ago|reply
[+] [-] egypturnash|7 years ago|reply
The older I get the more I feel like capitalism is a system for turning human misery into profits for a lucky few.
[+] [-] KirinDave|7 years ago|reply
What's interesting is that I don't think the day-to-day of it would look very different. Extremely hierarchical corporate structures don't work very well in small scale unless you have phenomenally charismatic (or even rarer, actual top-of-field domain expert) leaders. As an incentive to bring folks into the space, varying degrees of group ownership and power are offered to the founding set (and founding investors, which are often an integral part of the early business).
In a very real sense but perhaps to a lesser total degree, this is (as the syndicalists love to put it) "the workers owning the mill they operate."
What's also interesting is that as the company scales, this approach is considered increasingly untenable (mostly from a profit-generation standpoint) and a more absolutely hierarchical system emerges. But nearly everyone has the opinion that these corporate structures are awful, inefficient beasts that create incentives for parasitic management, outsized rewards for C-sets who may or may not provide actual value, and a constant conflict within the workforce to avoid being trivialized by the desire to increase efficiency over product quality or market share.
There was a pair of papers recently that I really enjoyed investigating what "fractal" community (and by obvious extension, corporate) structures could look like by De Florio & then Pajaziti:
https://onlinelibrary.wiley.com/doi/pdf/10.1002/sres.2242
https://arxiv.org/abs/1509.05112
These delve into how one can build service organizations around non-traditional (e.g., not-straight-line-to-the-top-always-centralized) structures and how these can actually have deceptively better efficiency even if their outcomes are only statistically predictable.
It's worth noting that these sorts of organization styles are not untested in the valley. The biggest success for such an organization I can think of off the top of my head is Google's technical support and loaner laptop system, which is semi-fractal and horizontal and despite looking like it'd be a huge money pit (from the traditional "control outcomes and limit loss" school of IT management), is actually dramatically cheaper than traditional IT departments at its scale. Data driven organizations often naturally push towards open and relatively flat org structures, with the understanding that the overhead of abuse of such system's leniency is much less expensive than the total expense of minimizing said abuse.
This isn't isn't exactly new, we see echos of the "actually the chaotic version of this over resources that are infinite in principle but constrained in a time domain is not much worse than the perfectly scheduled system" principle in lots of fields. Market economics likes this outcome (although not when you start making them own "externalities" like environmental damage). Network engineers have long ago made their peace with this truth, as well. A randomly scheduled network is only about 1/3 worse than an optimally scheduled network!
[+] [-] dirkdk|7 years ago|reply
The tech industry wages have been going up, but the wages of the people around our industry have been stagnant. Sensationalist title.