
In Silicon Valley wages are down for everyone but the top 10 percent - chollida1
https://www.recode.net/2018/10/13/17953004/wages-workers-silicon-valley-income-inequality
======
humanrebar
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.

~~~
dunpeal
> 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...

~~~
justboxing
MTV = Mountain View? Had to think about that for a few seconds... ( flashback
to 80s )

~~~
evasote
It still throws me, and I live and work out here. I see buses with this marked
on them, I always think they're buses the to TV network, then I go 'Duh'

------
skybrian
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.

~~~
UncleEntity
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.

------
dunpeal
This article is terrible:

> 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.

~~~
qznc
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?

~~~
nathanvanfleet
So in the bay area they found out that the largest employers actually
conspired to not hire each other's senior employees. Which serves to decrease
mobility for people and makes it so their wages become lower. When I worked in
Canada it seemed like companies were very desperate for talent but weren't
really willing to pay beyond a certain amount. It's hard to say if there is
just a natural ceiling for pay or if it's actually some sort of setup to keep
the compensation at that level.

~~~
radiantswirl
This is a fascinating question. My guess is that all industries have different
levels of collusion/wage-fixing. If something as big as THE TECH INDUSTRY can
get away with colluding to keep a ceiling on wages, then surely every single
other smaller industry can as well.

~~~
dunpeal
There are many ways to suppress wages besides wage-fixing collusion. About 25%
of American workers have non-compete clauses in their work agreements, for
instance.

~~~
pmiller2
True, but non competes are mostly unenforceable in California, so that doesn’t
account for the situation in the Bay Area.

~~~
rebelwebmaster
Only when people decide to fight them. Sadly, many people un-aware of their
dubious legality honor them even if they are in fact unenforceable.

------
paulsutter
Not just a nit, profits aren’t paid as salaries. The high profitability of the
big tech cos is /despite/ the high salaries they pay.

> increasing concentration of company profits going toward the salaries of a
> select few

~~~
dgoldstein0
True, but really high profits also enable them to pay higher salaries.
Obviously they don't put all their profits into salaries.

~~~
paulsutter
High margins allow high salaries. Any money put into salaries is not profits
it’s an expense.

This may sound like a nit but it’s important because they have high profits
despite high salaries. It shows the lopsided value of well managed network
effects businesses.

------
akhilcacharya
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?

~~~
dunpeal
Are you seeing any evidence of that?

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).

~~~
toomuchtodo
> 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).

I'm seeing the same in the Central Florida area. Postings open for months, the
pay scale slowly increasing at the same time. I've even worked with recruiters
to help drag those salaries up, explaining how to go back to their clients and
explain their expectations are unrealistic. A rising tide lifts all boats.

------
friedman23
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.

~~~
CalRobert
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.

~~~
anothergoogler
Teachers being criminally underpaid doesn't change the fact that most
engineers are underpaid. A good engineer can generate multiples of their
salary in revenue.

~~~
BurningFrog
And a bad engineer can destroy as much.

One fun thing about humans is that almost all think they're underpaid. This
says a lot about people and nothing about wages.

~~~
anothergoogler
We may have different experiences, but in a long career the worst I've seen
are useless engineers. Are you seriously claiming that the population of
engineers destroying multiples of their salary (sabotage/gross negligence) is
comparable to the population who create multiples (and are exploited)? Silicon
Valley lore is filled with stories of fortunes earned on the backs of
engineers being paid market rates. You don't have to look hard to find them,
start with Apple, or look at any modern "unicorn."

~~~
snovv_crash
I've seen several engineers who make more work for other people to fix than
they contribute in progress themselves. Sometimes it is by bikeshedding on
code reviews, other times by choosing some pet architecture/technology for a
project which everyone else has to waste time learning about and/or migrating
to, or by putting something in that bottlenecks all development of a critical
codebase through only them, leading to people getting constantly blocked. Then
again, these have been great lessons for me in what not to do, and what to
recognize as red flags.

~~~
bryanrasmussen
yes, they make more work for other people to fix than they contribute, but
they don't make more work to fix than the people who are making work that
fixes are doing. There is no -10x engineer, hardly even any -1x engineer -
probably the worst you find are -.5 engineers.

In fact I knew a guy whose effect on a project was to wipe out several years
of progress but to be fair he was not a -.5 engineer, in some ways it was just
the bad chance that led to him having such a detrimental effect, in another
scenario he might very well have been a +2 or more engineer.

~~~
snovv_crash
I saw -10x: they chose some crazy architecture for something then dug their
heels in. The two people who historically got all the work done, both about
5x, decided to quit because of this. So now the work still needed to be done,
in the crazy architecture, without the two best engineers, and on top of that
time needed to be spent on hiring. Go forward a year and the progress the
company made was probably less than it would have in a month before the fancy
new architecture was introduced, and the loss of talent.

Additionally I've seen managers/HR demotivate a team of 5 so thoroughly that
nobody got work done for 2 weeks. That is -5x from a single meeting.

------
closeparen
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.

~~~
djrogers
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.

~~~
closeparen
I do work in the Bay Area. Santa Clara, San Mateo, and San Francisco counties
all have median household incomes over $100k. It’s not at all unusual for a
single software engineer to be in that ballpark. Look at college graduate
incomes and you will find software engineering compensation even less
exceptional. At the national level, anyway, personal college graduate incomes
around the same as overall household incomes.

~~~
mamon
Living in California recently I actually met a few software engineers that
were driving Uber as their second job, because their SWE salary was not
enough. This really shocked me.

~~~
closeparen
It’s enough to be okay, certainly, but not enough for the lifestyle you would
have anticipated by getting an education and entering a lucrative white collar
field.

------
jt2190
The original report:

“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...](http://www.everettprogram.org/main/wp-
content/uploads/TIGHTROPE-2018-REPORT.pdf)

------
chasing
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.

~~~
meddlepal
Yes tax us more so it can be spent just as inefficiently. Throwing more money
at our problems is not the solution.

~~~
chasing
Throwing money at it would solve all sorts of problems. It'd let us pay
teachers more. It'd let us provide more healthcare opportunities to people.
It'd help us improve our infrastructure like roads and public transportation.
It'd help our libraries. It'd make education less expensive, allowing more
people access. Fewer people in economic distress means less crime. Better
parks. Better maintenance of natural spaces. Etc.

Government isn't perfect. But neither is private industry. We need both. And
both need money to function well.

~~~
meddlepal
More money == things are better is just too simple of a model to make a
decision like this. You add more money to the system and where does it go?
It's not automatically allocated to your causes, some of it gets siphoned off
in administrative overhead. Some of it gets reallocated. Some of it is just
used for cronyism or lost in the bureaucracy of doing business (e.g. paying
lawyer fees to fight NIMBY's who are using environmental review to prevent the
development of transportation or public housing).

On a tangential note, there is nothing stopping you and a group of like-minded
individuals from just paying more taxes to the government.

~~~
drb91
> You add more money to the system and where does it go?

Probably from rich person to rich person, but there's the hope tax money goes
to actual services. At worst we're in the same position.

> On a tangential note, there is nothing stopping you and a group of like-
> minded individuals from just paying more taxes to the government.

The people inclined to act in this communal/moral way are often not suited to
make significant amounts of money to give away. You need to take the money
from the rich people and give it to the poor people.

~~~
sigstoat
> > You add more money to the system and where does it go?

> Probably from rich person to rich person, but there's the hope tax money
> goes to actual services. At worst we're in the same position.

no, the worst case is that capital was misallocated, and growth that could've
happened, didn't.

all future humans are then harmed.

~~~
drb91
> no, the worst case is that capital was misallocated,

Who is to say this isn’t happening already? I don’t see many signs it’s well
allocated today. Look at healthcare costs in America. Look at our defense
spending for little tangible return. Look at the homeless on the streets. Look
at where VC investments are going (ads, lifestyle spending, and
automation—little to no benefit to society as the productivity returns go to
the capitalists). Look at the debt necessary to get what is commonly
considered a base for any career, ie a degree. Symptomatically, cash is
already misallocated for a society that bolsters values I hold dear.

> growth that could’ve happened, didn’t

Ahh yes, the “market before everything” philosophy. I don’t buy into it. If
growth were meaningfully good we’d see wage increase adjusted for inflation in
the lower class. We haven’t seen this for decades.

------
crawfordcomeaux
Serious question:

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
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.

~~~
crawfordcomeaux
I see I wasn't clear because I used absolute terms. Please insert your own
desired population percentages for the questions where I've implied 100%.

In the meantime, I'll still consider the ideas because I find it useful. There
are no bad questions, just people who find it useful to judge others and their
questions. I've found it transformationally useful to minimize my judgment, so
I don't count myself among that crowd anymore and I don't judge others who do.

If it's the absolute terms I used, like "everyone," that's put you off, cool.
Let's instead imagine what would happen if a majority chose to. Or 25%. Or
3.5%.

Just as you chose to answer a question I didn't ask, you could've easily
modified my questions to fit your standards.

Serious advice: Responding with judgment isn't typically conducive to learning
unless the recipient has learned to let go of other people's judgments. Here's
a paper on the subject I find useful.

[https://queue.acm.org/detail.cfm?id=3068754](https://queue.acm.org/detail.cfm?id=3068754)

~~~
nkoren
This is a good reply, and I apologise for the judgemental reaction.

We probably actually share much of the same ethos. Personally I think it would
be absolutely if everybody dropped mushrooms and spent a week in the
wilderness coming to terms with the unity of consciousness of all beings and
the absurdity of building a society based on false economies of wage labour
and conspicuous consumption, etc. Worked wonders for me, and no doubt it would
be groovy if everybody else did that too.

The severity my reaction is due to the fact that I've seen too many people hit
this wavelength and then get lost in the daydream of what would happen if
literally everybody else got on this wavelength too. And then spend -- and
please believe that I mean this very very literally -- the _entire rest of
their lives_ lost in that daydream. I find this to be tragic, because I think
that such people have something to contribute to the world, and pursuing this
question explicitly degrades their ability to do so.

And thus I actually _do_ think it's a bad question. If you're interested in
changing the world, then becoming attached to any kind of theory whose initial
predicate is fundamentally impossible means that you are _not_ going to change
the world.

A far better starting point is: "how can I change the world without anybody
noticing at all"? Followed closely by: "how can I change the world if I get
one in a million people to see things my way?" Work your way up from there.
Starting from the other direction is a mind-killer.

------
dirkdk
Silicon Valley is not a geographical area, it is the tech industry within a
geographical area.

The tech industry wages have been going up, but the wages of the people around
our industry have been stagnant. Sensationalist title.

