
Are We in the Middle of a Programming Bubble? - swimorsinka
https://thinkfaster.co/2019/01/are-we-in-the-middle-of-a-giant-programming-bubble/
======
shantanubala
I think programmers tend to underestimate the difficulties involved with
becoming a good programmer because once you're good, you only see the even
steeper learning curve ahead of you.

Some of the smartest people I know work in other domains: biology, chemistry,
and even physics. They are sometimes baffled by tasks that seem trivial to me,
and I'm under no impression that I'm more intelligent than them. I simply
specialized and focused only on programming, while they program to accomplish
other tasks in their domain of expertise.

Can this last forever? Of course not, nothing lasts forever. But wondering why
the wealthiest corporations in the world pay their workers high salaries is
perhaps like wondering why water is wet. Software has a low marginal cost, and
the rest is basic incentives for the corporations.

~~~
devoply
If anything good programmers are underpaid. If you are making your company a
mil, you should be getting 1/2.

~~~
jjeaff
But what if another programmer is willing to make me a million for only 25%?

That's how markets work. You get paid what what the market will bear, not what
you "should" make.

~~~
devoply
As I said good programmers are underpaid. They should figure out how much they
are making their companies and ask for more. The market can often afford to
pay more, if you just negotiate better. You can also unionize to get your
employers closer to what you are worth to them rather than what they are worth
to you.

~~~
ken
> just negotiate better

In every other aspect of computers, the industry has finally embraced
_usability_ as a desirable goal, and not just for end-users.

On my first computer, you had to read a 100-page user manual and learn exactly
what commands to type. In my first programming language, you had to manually
allocate (and worse, deallocate) memory. With my first database, we used to
have to go type VACUUM regularly. None of these is true today.

Yet even though some of the highest paid people in the world are members of
unions and have agents to do their negotiating, programmers seem to have
latched onto this idea that if you're not making top dollar or have your ideal
working conditions, you should "just negotiate better".

Why stop there? Tell programmers they should "just program better", too.

> You can also unionize

Have you ever organized? I don't think you realize how difficult this is,
especially without strong support from an existing union. There's a reason
unions heap rewards on people who do it.

Existing unions also have great labor lawyers. A common response to even
thinking about unionization is getting fired. (That was in the news recently
because it happened 4 weeks ago here in Seattle.) Labor laws aren't what they
once were, and there's usually no consequence to the company for firing
organizers.

~~~
tluyben2
> On my first computer, you had to read a 100-page user manual and learn
> exactly what commands to type.

Flipside: I can still write software for my first computer without looking
anything up, over 30 years after reading those 100 pages. I still know the
memory layout, opcodes, assembly etc by heart and it is still the best way
today to program that particular computer (which still works in my man cave)
today. Yes, today it is all simpler, but the 100 page example I find a plus,
not a negative. Maybe you were referring to something but my 100+ page manual
was usage and at the same time programming (using was programming beyond the
basics) as that was the only way to use the system.

------
specialp
This has been contemplated for many years and the price has gone almost
nowhere but up. In the early to mid 2000's it was thought that most work would
go to much cheaper India, and put highly compensated on shore workers out of
jobs. It was tried to some extent, and failed. Then it was thought that lots
of people would then fill the demand by going to university for CS and other
related fields and saturate the market. That didn't happen either. It has been
known for a long time that CS is one of the most valuable majors as far as
salary and still the percentage of bachelor's degrees awarded has stayed
between 2-4% Not saying that this is the only way to get into the field but it
is the most traditional way and indicative of the supply coming in.

Consider that some of the most valuable companies in the world did not exist
25 years ago, and now they do making real non bubble money where their biggest
assets are software developers. This isn't the dot-com boom. The attrition
rates in CS programs are very high and even then not everyone that receives
formal educations ends up being a decent developer. Factory workers made good
wages in the mid 20th century due to companies making lots of money on an
industrial boom. We now have a technological boom, and unlike factory work the
barrier to entry is much higher. So I don't see why it can't continue. Sure
the 3-400k salaries are high but they are at top firms that are selective and
competing for a finite pool of talented workers in very expensive areas.

~~~
leoc
CS has been through a couple of salary busts in the US previously though, no?
One in the '80s when all the then-new CS programs started to release graduates
into the market, then another after the dot-com bubble; or have I been
misinformed?

~~~
duderific
The dot com bubble caused a salary bust because so many companies that were
employing lots of people went out of business. This put a glut of programmers
on the market with nowhere to work, which predictably pushed salary levels
down.

This is nothing like the current environment, where there is a consistent
demand for programming talent which outstrips the supply, and the industry as
a whole is far more stable.

Of course, a global economic slowdown could put a damper on salary growth, but
it will not be a salary "bust" like what happened after the dot com bubble.

~~~
empath75
If the current tech bubble bursts, it’s going to absolutely wreck amazon, fb
and google—the three companies that actually gain most of the benefit from all
these tech companies blowing their funding on ads and AWS spend.

Those are the companies driving up salaries — once that rollercoast ride stops
I imagine that there are going to be mass layoffs and salary readjustments for
years afterwards.

~~~
duderific
What is the current tech bubble, exactly? Those companies you mentioned have
absolutely massive revenues and profits, and plenty of non-tech people and
companies are responsible for those revenues and profits. This was not the
case in the earlier bubble (lots of overvalued companies with little or no
revenues).

What seems more likely is that the little startups will get crushed as VC
funding dries up.

~~~
chipotle_coyote
I think that's true, but I also suspect that one of the main drivers for the
incredible acceleration of big company salaries has been to keep talent _at
that company_ rather than seeing the best engineers leave to go take VC money
and play the startup lottery. If VC funding really does dry up, the pressure
to keep salaries this high may be considerably lower.

------
sciencewolf
How many software engineers are truly making over $300k as a rank-and-file?
Let's be generous and say there's about a dozen or so companies that routinely
pay engineers that well. Each FAANG will have on average, 10k engineers? So
that's around 120,000 out of an estimated ~20 million developers (from a quick
google search). That's around 0.6% earning pay in a "bubble" situation, the
rest being senior folks or executives who would demand high pay everywhere
else. So if you're a trained software engineer, you have less than a 1% chance
of being in the situation described.

A quick google search finds that law school students have around a 14% chance
of making BigLaw (the legal equivalent). The odds of getting into a medical
school is between 2-5% on average. So no, I don't think we're in a bubble, the
majority in the situation described would simply exist as the elite
compensation class elsewhere as well, but maybe with even better odds.

~~~
akhilcacharya
> Each FAANG will have on average, 10k engineers?

That's..really low. FB has around that many, Google has like 50k, and from
what I've heard Amazon has about the same number or more.

Considering that everyone I know got >= $100k base out of undergrad regardless
of location I don't think it's as uncommon as you would think anymore.

~~~
howard941
>= $100K outside of a major city for a green undergrad doesn't seem typical.
Do you hang with grads from big name schools?

~~~
ams6110
Agree, in the Midwest USA for example even very experienced developers are
barely into six figures.

Of course cost of living is a fraction of what it is in SV. And quality of
life is (subjectively) better.

------
agentultra
I think Simon Peyton Jones has the right idea (paraphrasing): _programming is
one of the most difficult, complex engineering efforts undertaken by humans.
At the scale we do it one can 't help but be amazed that it works at all, let
alone that it works so well._

I think the reason these compensations get that high is because it does take
5-10 years to become good enough to lead a team that manages something so
complex and to do it well so that the results are reliable and consistent. I
think the difference with doctors and lawyers is that we're not licensed to
practice. We're not a capital-P profession. However we still have to attend
conferences and stay relevant but the expense and requirements to do so are on
us or the companies we work for: there's no professional obligation to do so.

I don't think we're in a programming bubble if the author means we're in a
compensation bubble and that programming is over-valued.

I think the real bubble is complexity. We're seeing a deluge of security
breaches, the cost of software running robots in the public sphere on
unregulated and very lean practices, and a lot of what we do is harming the
public... though by harm I don't necessarily mean only harm to human life --
but harm to property, insurance, people's identities, politics, etc... and
we're not accountable yet.

If anything I think we need to up our game as an industry and reach out for
new tools and training that will tame some of the complexity I'm talking
about... and in order to do that I expect compensation to remain the same or
continue to spread further out and become the norm. Being able to synthesize a
security authorization protocol from a proof is no simple feat... but it will
become quite useful I suspect.

[0]
[https://www.youtube.com/watch?v=PTSE779n0nI](https://www.youtube.com/watch?v=PTSE779n0nI)

------
cheez
As someone who hires programmers, no. It is difficult to hire good people. The
only way I can successfully hire low-cost programmers is by building a
system/machine for creating and releasing software that does not require a
high level of intelligence/creativity. The only people that can make high
margins in programming-heavy industries are those who can do this or some sort
of defensible moat.

As a programmer myself, yes. There is no way I can continue to make this much.
I'm a dumbass. (I say this having worked on, in the last year, a compiler,
trading algorithms, and 3D object analysis)

~~~
zackmorris
I am still basically an entry-level developer even though I've been doing it
for 30 years (20 for money).

The way I see this playing out is, something like behavior-driven development
(BDD) where the business folks describe the functionality they desire, and
programmers write up the backend logic. Then as AI progresses to AGI, a higher
and higher percentage of that backend code will be generated by machine
learning.

So over the next 10 years, I expect to see more specialization, probably whole
careers revolving around managing containers like Docker. There will be cookie
cutter solutions for most algorithms. So the money will be in refactoring the
inevitable deluge of bad code that keeps profitable businesses running.

But in 5 years we'll start to see automated solutions that record all of the
inputs, outputs and logs of these containers and reverse engineer the internal
logic into something that looks more like a spreadsheet or lisp. At that point
people will be hand-tuning the various edge cases and failure modes.

In about 10 years, AI will be powerful enough to pattern match the millions of
examples in open source and StackOverflow and extrapolate solutions for these
edge cases. At that point, most programmers today will be out of a job unless
they can rise to a higher level of abstraction and design the workflows better
than the business folks.

Or, we can throw all of this at any of the myriad problems facing society and
finally solve them for once. Which calls into question the need for money, or
hierarchy, or even authority, which could very well trigger a dystopian
backlash to suppress us all. But I digress.

~~~
hackandtrip
Your argument is based on AGI, something we have no idea if will ever happen,
and most likely nearly as close as you think.

~~~
CraneWorm
Oh, If we're getting to AGI then it's either apocalypse-time or post-scarcity-
time, ain't it?

------
icebraining
A few thoughts:

\- Just because a value is high and may very well go down, doesn't mean it's a
bubble. FAANG are making real money from those workers, not just inflating an
asset and selling it to other investors.

\- Just because it doesn't involve long hours, doesn't mean it's not hard. A
lot of my college colleagues really struggled, and many more didn't even get
in. Don't discount natural ability - in the land of the blind, the one-eyed
man is king, even if seeing is effortless for him.

~~~
jiveturkey
I think the article's author is just suffering from imposter syndrome.

------
sharkweek
I dunno about a bubble, implying it will pop in some catastrophic way.

But will market forces correct the above average salary? I think so.

More young students than ever are learning to code, which is naturally going
to increase the labor pool. The supply of software engineers is going to go up
in the next 10-20 years (as will the demand, though! But I still think supply
will outpace). This seems like it would mostly affect new hires, as some 15
year veteran is going to have valuable experience that (most) companies will
always be willing to pay for.

It feels like finance to me. People who got there early made a killing. Then
salaries, while still pretty high, fell considerably as everyone rushed there
to get rich.

As a counterpoint to the author's comment on doctors (maybe not lawyers, still
plenty of law students in the pipeline). It does appear that the number of
people going after medical degrees is decreasing, so I would predict their
salaries to jump considerably in the next 20 years.

And last, and a totally aside point, I have exactly one friend who skipped
college and over the last 12 years worked his way up the electricians union
and now runs his own small business doing residential electrical work. He's
making more than most of our social circle. He doesn't know many people his
age doing this type of work either, so as the old guard retires, he's going to
charge whatever he wants.

~~~
rch
Lawyers have been around for a while, there doesn't seem to be a shortage of
them, and the average salary is still relatively high. However the
distribution of starting salaries has trended towards being bimodal
([https://www.nalp.org/salarydistrib](https://www.nalp.org/salarydistrib)).

I could imagine the same thing happening for programmers over time, if it
hasn't already.

~~~
peteradio
I think barrier to entry for lawyers is way higher than for programming.

~~~
jenscow
Can you imagine hiring a self-taught lawyer?

~~~
rch
I believe some states will let you simply take the bar exam and start
practicing.

Of course, one would probably get started by clerking or working into a
paralegal position, both of which would require independent study and
coursework.

Sometimes people just need a cheap lawyer to take a look at a simple will or
divorce papers, etc.

~~~
dlp211
I believe Washington is the only state that allows this anymore. Even then,
you still need to be an understudy before you are allowed to take the Bar in
Washington.

~~~
jki275
California, Virginia, Vermont, and Washington all seem to allow it. There are
caveats, of course.

------
BjoernKW
First, salaried rank and file software developers on average certainly don't
make 300-400k per year. Those working at Silicon Valley FAANG companies still
account for only a minute percentage of software developers in the US and
certainly in the world.

How that is supposed to constitute a bubble is beyond me.

Then, payment for work isn't (or shouldn't be) about (perceived) equality and
it isn't about compensation for suffering or even mere inconvenience either.
It's about the value created by the work, which is why the work being hideous
or insanely long work hours shouldn't be contributing factors that justify a
high salary. Now, this of course is an idealistic notion. Often work is still
valued in terms of time wasted instead of value created. Moreover, in the case
of some not so well-paid but still important jobs the salary attached the them
often is only tenuously related to the value created.

All that said, while probably few professions will be able to match the
leverage and hence the value created through software development in the near
future, perhaps the more reasonable hours and better work environments in
software development should serve as a model for other work environments and
industries rather than as an indicator that something's amiss.

~~~
esoterica
Pay is about the intersection of supply and demand, which is influenced by but
not purely a function of the value created by the work. Insane work hours
props up wages by decreasing supply since lots of people don't want to work 90
hours a week.

~~~
rohansingh
Insane work hours also reduces demand for workers, though. If it's a norm in
an industry for employees to work 80 or 90 hours, an employer might hire fewer
people than if folks only worked 40 hours.

~~~
humanrebar
That assumes a 90 hour work week produces more value than a 40 hour work week.
In programming, I'd bet the other way on average.

------
ttcbj
I think there are a number of caveats to this article:

1\. The amount that a company can sustainably pay you is dependent on how much
value your efforts have in its industry. Software has significantly higher
margins than medicine, law, or almost anything else. As long as those margins
are sustained, it is possible to pay high salaries. (As buffet says: I'd
rather work for a mediocre company in a great industry than a great company in
a mediocre industry).

2\. But companies don't want to pay high salaries, so they will look for
substitutes. Substitutes could be technology (RDS instead of DBAs) or
increased supply of quality programmers. So far, it seems like these big
companies haven't been able to find good enough substitutes to force down
wages.

3\. If you are looking at FAANG salaries, you are looking at the top of the
income spectrum. The top of the income spectrum for lawyers and doctors is
quite high.

4\. Market economies reward value (outcomes) not merit (hard work). Hard work
is correlated with outcomes, but it is not always a perfect correlation. So,
looking at programming and saying it is less 'hard' than law or medicine
doesn't say much, the question is how much value the person can generate, and
how much of it the company can capture.

~~~
Consultant32452
#4 is a lesson I'm still struggling with in spite of nearly a decade in
"leadership" roles. I've been discouraged from coding beyond tiny
situationally dependent snippets to teach a more junior programmer something.
My value is no longer in producing things directly, my value is in being the
guy on the conference call where the customer says "If Consultant32454 says it
will work, it will work.". I understand this is valuable, but not having a
"thing" I built with my own hands at the end of the day is difficult for me. I
wonder if this is a result of low class upbringing or something... Plenty of
people in the management/executive class seem to be able to accept
credit/responsibility for things they managed into existence rather than
produced into existence... It's hard to accept being a force multiplier rather
than a force, if that makes sense.

------
BucketSort
Everything is code nowadays. Infrastructure as code, circuits as code, etc.
Maybe the code we write will change overtime, but the practice of rigorously
describing things in a formal language will never go away as long as people
are doing intellectual work. What is intellectual work anyhow and is it not
isomorphic in some respect to writing code? Isn't it about construction? Maybe
the functional community, where they talk about equivalences between proofs
and programs and amazing things of that sort, has a better grasp on what the
future of programming and its rightful place in human endeavors is.

------
tylerl
>> _Rank and file programmers at the top tier tech companies now make $300 to
$400 thousand per year._

That is absurdly false.

To be generous, let's pretend he's only talking about FAANG programmers,
rather than startups. According to Glassdoor, average compensation for
"Software Engineer" positions:

Facebook: 121K Base + 15K Addl = 136K

Apple: 122K Base + 10K Addl = 132K

Amazon: 103K Base + 20K Addl = 123K

Netflix: 121K Base + 20K Addl = 141K

Google: 124K Base + 20K Addl = 144K

These numbers are slightly inflated (by 1k to 20K/yr) because I counted base
and additional pay independently, while Glassdoor calculates an average total
combined comp, which is always lower; I'm taking the larger numbers to give
the author the benefit of the doubt.

Since Google is the highest, let's drill down on them a bit: With 1yr of
experience you're looking at 121K+16K (or 125K total claimed, not doing my
independent math thing), with 15+ years experience you're looking at 140K+24K
(or 161K total claimed).

Again according to Glassdoor, to break 300K at Google on the average you need
to be a Senior Staff Software Engineer or higher, which is exceptionally rare
-- bit o' Googling suggests they're around 1% of the workforce, give or take.

In other words, the author is literally calling "The 1%" the _Rank and File_
of programmers. Which is an exaggeration, I think.

NB: What Glassdoor doesn't account for is past stock performance; since SV
traditionally pays a large chunk of its compensation in restricted stock
units, and since the stock in each of these companies has increased by 50% to
150% in the past 4 years, by the time those stocks vest your "additional"
compensation may have grown quite a bit due to market performance. But that's
not a compensation bubble, it's just the stock market.

~~~
m0zg
Personal experience from GOOG 3 years ago: Staff SWE, 220K base, ~200K stock
grant per year (if you ship something really impressive, numbers go way up
from there). This is with "exceeds" perf reviews which is a baseline to stay
in good graces. That is, in short, why startups have trouble hiring Staff SWEs
from Google. From what I heard from my FB peers, comp is better there by about
15-20%, but work is more boring, and there's more politics. Why did I leave,
you might ask? From a realization that you can't make all the money in the
world, and intense desire to get off the treadmill. And make no mistake,
Google puts you on a serious treadmill when you join.

------
csmeder
Or another way of looking at it: maybe programmers are one of the few
professions that aren’t being extremely underpaid when taking into account:
inflation, macro productivity and their scalable impact.

Inflation: A $180k starting salary is equivalent to a $100k salary in 1990
dollars (The 1990s is probably the period when many of us 30 year olds started
to hear about salaries and learn that a “six figure” salary was impressive.
With $100k being the absolute bottom of a “six figure salary”.

Productivity: for every hour worked (on average) the American worker is about
50% more productive - when compared to 1990. That takes $180k to $270k. [1]

Scalable impact: increases in worker productivity are not distributed evenly.
Let’s say a programmer is contributing double what the average worker is to
the increase in productivity. This brings us above $300k and if we look at the
real numbers maybe closer to $500k or more in value compared to that 1990
worker bringing in $100k of value.

Thoughts? Poke holes in this but it adds up in my mind. Now this doesn’t prove
companies won’t find a way to under pay programmers but it at least makes me
feel less surprised salaries are so high. And sad that for other industries
workers are getting the short end of the stick compared to how workers were
compensated in the previous century.

[1]
[https://m.huffpost.com/us/entry/us_4501830](https://m.huffpost.com/us/entry/us_4501830)

------
pcstl
As long as the demand for skilled programmers stays as high as it does, I
don't see this alleged "bubble" popping. And it does not seem like software
will stop eating the world.

In fact, as someone (I think it was Marc Andreesen) said, we're just at the
"end of the beginning". Software is in the final stages of eating the media
industry and will now progress toward heartier fare. This will be accompanied
by further growth in programmer demand - specifically, programmers with
skillsets which are niche right now.

Even as CS enrollment reaches an all-time high, I do not believe the supply of
developers with appropriate skills will come anywhere near the demand in the
next few decades.

So, no I do not think this can be called a bubble - except in the specific
case of FAANG workers. They might see their salaries go down in the next years
- but programmers as a whole are unlikely to have a hard time finding jobs
with decent pay in the foreseeable future.

~~~
why_only_15
Ben Horwitz said that. The talk is here:
[https://www.youtube.com/watch?v=RF5VIwDYIJk](https://www.youtube.com/watch?v=RF5VIwDYIJk)

------
ummonk
_> Usually one of the easiest ways to succeed is by doing things that other
people are unwilling to do, meaning that if you choose a path with long hours,
lots of stress, and lots of hardship, not many people will accompany you, and
you will get compensated accordingly._

That's one way. The other way is to do something that other people are unable
to do. Software engineering is highly dependent on raw talent / intelligence,
and hard work is unable to bridge the talent gap in our industry the way it is
in other industries. The high paying companies in our industry are just the
ones smart enough to pay 2-3x compensation to get 10x programmers.

------
_bxg1
1) I think part of this can be explained by the disproportionate living
expenses on the west coast, especially in The Valley. I wonder how those
numbers on doctors and lawyers would play out if you constrained them to San
Francisco?

2) I do think there's a partial bubble, though. What I tell people is,
programmers today are like literate people in the middle ages. You can do hard
things with reading and writing, but reading and writing aren't inherently
hard. It's just that they weren't taught to the masses back then, so you could
be hired as a scribe simply because you knew those basic skills. I think once
public education catches up (or affordable education; the bootcamps you see
everywhere now are starting to close the gap), the basic ability to code will
quickly drop in value. There will still be high value placed on skilled
programmers (the poets and technical writers of the programming world) -
though their salaries will probably see a bit of a correction too - but I
think the bottom will drop out beneath them, and you'll have to do more than
just learn JavaScript to be valuable.

~~~
TACIXAT
I came to the conclusion too. I was working as a reverse engineer and realized
my job was basically just reading. Modern scribe.

------
hacknat
I understand where this guy is coming from, but his instinct to say that
tougher career paths should elicit more compensation is misguided. Certainly
there is some correlation, but he could have added social workers and teachers
to his list, but nobody wonders why those two professions don’t make a lot of
money.

You can sort of count on most organizations paying something resembling a cost
of living salary (though even that is becoming less true), but after that
everything, ever-y-thing, always, is market driven.

We get to have our cake and eat it too, not because it is harder to become a
software engineer than a doctor, but because it also isn’t trivial to become
one AND the demand for our talents keeps outstripping supply every year.

There are still lots of divisions at lots of Fortune 500s that are just now
starting their journey in adopting software to solve their problems, and they
all create market pressure somewhere in the supply curve.

Look at medicine. Doctors make less than they used to because cost controls
(not very effective ones, but still) have been introduced into the system. So
even though demand for doctors is high a doctor can only generate so much
revenue for a provider.

The demand for a service only roughly correlates to a markets ability to pay
for it. There is a ton of demand for services in our economy that go unmet,
because the market can’t or won’t bear the cost.

Edit:

Also, the returns software can generate for an organization are simply
astronomical in a way that even other engineering fields can’t rival. If an
organization is embarking on a software project that they know will either
make or save them 10s of millions of dollars they aren’t really going to bat
an eyelash at 300k a year.

------
jdmoreira
Well. I live in Sweden and I don't make anywhere close to these values. Not
even remotely close. I have been programming for 12 years and I like to think
I'm not half bad at it.

So is peak programming just in the valley or should I be worried as well?

~~~
pmiller2
You have a social safety net and actual workers’ rights that make up for at
least some of the difference.

~~~
esoterica
I would rather make $500k a year and have "no rights" than have strong labor
rights protecting me from being fired from my $50k/year job.

~~~
pmiller2
Well, do you make 500k? If not, then why not? It’s possible in the US, but the
median US _household_ income is 1/8 that. The vast majority of workers,
probably including most software engineers, ate better off at $50k but not
having to worry about insurance if they get laid off, and getting 3-6 weeks
notice when being let go (among other things).

~~~
esoterica
The people pulling bubbly SV comp numbers (i.e. the topic of the thread) are
not part of that majority though.

~~~
pmiller2
My guess is that a huge majority the software engineers in the Bay Area are
making less than half those numbers. If you value pre-IPO options at the
proper discount, I would guess a majority make less than $250k. That’s a high
total compensation, to be sure, but, given the cost of living, and the value a
good engineer can create, it’s not absurd.

Full disclosure: I work at a public company (not FAANG) and my TC is under
$250k.

------
CaptainJustin
I view it more as a gold rush. Creating the future has never been more
accessible and companies are in a terrible rush to find their 'plot' and start
finding nuggets.

Software engineers are the people who can do the work and so demand go up. The
returns (value) these ventures produce warrant continued competition in
winning decent talent and the price gets pegged in some range for some region
in some category / industry.

~~~
typetehcodez
To further add to your point: developers now have control over the means to
production and, unlike the industrial revolution, we programmers do not need
access to capital and expensive manufacturing equipment to build a product. We
just need some technical skills that are essentially free to learn. And as the
best of us figure out how to add the entrepreneurial talent stack into our
own, existing corporations have to pay us as consultants or continue to
increase pay to keep that talent. In time, I think we will see it is the
corporate structure that is in a bubble. (See "Developer Hegemony" by Erik
Dietrich)

------
bateman_
Due to the nature of programming interviews many programmers self-select
themselves out of a shot at these "bubble" salaries. Look at recent threads on
HN, many folks with valuable experience refuse to prepare for the modern day
FAANG-like programming interviews out of principle or whatever, and thus
aren't putting themselves in a position for these $250-300k jobs.

These companies have actually devised a pretty decent scheme to select
candidates, you gotta be someone either smart enough off the bat or dedicated
enough to study to pass their interviews -- either way it's a VERY strong
signal that you're going to be a solid hire.

Tech companies are going to continue being some of the most valuable companies
in the world, if they aren't we have a lot of other pressing issues (like the
decline of civilization) to worry about. Even amongst a downturn and/or
recession I'm very confident that programmers at the FAANG type companies will
continue to be paid very well relative to the rest of the population.

------
booleandilemma
Yes.

I’ve met people in marketing calling themselves programmers because they once
wrote a PHP script.

I’ve overheard high school-aged kids at the Starbucks talking about the
differences between a developer and a designer.

I’ve interviewed self-described “programmers” who struggle to write a for loop
and “DBA”s who don’t know what the normal forms are.

My family, none of whom are the least bit technical, casually throw around
words like “algorithm” and “server”.

The guy who works at the deli outside my apartment has asked me what my
opinion on Python is.

We are definitely in a programming/CS/IT (whatever you want to call it) bubble
- the level of general interest and enthusiasm for this stuff is unlike
anything I’ve seen with other fields.

~~~
bradenb
To add another data point: I've never experienced any of these things, not
even close. The closest I've come is a DBA brother-in-law that wanted to code
full time asking me how I liked a particular language. Outside of work, I
rarely even encounter other software developers.

------
thegabez
Since 2008 the Federal Reserve has been keeping interests rates historically
low. Low interest rates generally provide favorable conditions for stocks to
go up, many companies will even buy back their own stock. Tech stocks have
been growing faster than most sectors since 2008.

You mention other companies offered same salary but could not compete on
equity. I'm assuming many of the big tech companies buy back their stock and
then draw from this pool to give to new employees, which other companies
cannot do, giving them an advantage in getting the best talent.

So are we in a programming bubble? In some sense yes, but it's being driven by
low interest rates. I would guess that once rates normalize we will see a
decrease in overall compensation from the tech giants as providing equity will
become much more costly. However, moving forward the demand for strong
information technologists will only increase.

------
captainbland
Without being able to read the article, I'd say there's good reason for
programmer value. It is one of the few professions that really grants a kind
of leverage for effort to a business - because programmers don't just program
something once, they program and it works over and over again. Yes, that
requires some degree of maintenance, but the fact remains that you simply
couldn't accomplish many things which businesses take for granted without
programming.

In fact, even with a flooded market of programmers, the production of new
tools actually affords programmers even more tools to work with and even more
leverage for the business by employing them. So there remains a strong case
for programming.

Mind you, the silicon valley area as a specific thing may well be a kind of
bubble given how much more you can be paid there as a programmer compared to
just about anywhere else in the world.

------
dt3ft
Ironically, the website is down. Perhaps that bubble is only in his mind or
maybe he should look into hiring a dev worth his while to look into that?

~~~
Tehchops
Yep.

Since it's down, I can't actually read the content, but I too find no small
amount of irony in a claim there is any kind of bubble in knowledge work, when
the site said content is hosted on doesn't even appear to work.

~~~
dt3ft
The article had a several good points, but it tends to generalize. One
statement was that devs are not under stress. He lost me right there.

------
paulsutter
If you’re writing software used by billion people, your employer can probably
afford to pay you more than if you’re writing software used by a million
people. Or 100,000, or 1000, or 10 people.

Market multiples will go through ups and downs, and they’re high now for the
major tech companies, but it’s not entirely surprising that the major
companies pay well.

------
pascalxus
Great insights, but let's not forget, at most companies being a programmer is
no picknick. Some places like amazon, things are so bad employees cry (that
amazon article).

Also, don't forget, FAANG employees are the exception not the rule. Those are
probably the top 5% in terms of engineering compensation, so it shouldn't be
used as an average case for software engineers. You have to be a top 5%
engineer or at least top 5% lucky to be in one of those companies.

And, let's not forget 400K isn't so much when your employer chooses to be in a
location where housing costs an average of 3M to 4M and day care costs 30K per
year (if you're lucky enough to get it).

~~~
pmiller2
You don’t have to be a top 5% engineer. You just have to pass their leetcode
interviews and be good enough to not get fired and also able to deal with
working for a massively evil company (except possibly for Netflix and Apple).

------
godot
Perhaps one way of thinking about FAANG pay level is where the money is coming
from. FAANG can pay engineers a lot because they make a lot of money (in a
very indirect way, it's like what people always said about "If I make my
company a million dollars, I should get a portion of that", just very diluted
through many layers). FAANG makes a lot of money because they're huge
companies that make money from the entire world. This is unlike most startups
and smaller/mid-size tech companies in the US (where FAANG originated). In a
way, they're companies who've globalized successfully. The money that they pay
engineers, come from money they made from other people all around the world.
(maybe citation needed -- I didn't do any research on this claim, don't know %
of money a Google/etc would make from the world vs from the US.)

When you think about it this way, FAANG pay isn't truly a bubble, it's more of
an effect of their globalization. In that sense, I don't think they would
"pop" per se on a timer (although they may eventually pop if their business
falls over for one reason or another, like how AOL/Yahoo/Pets.com etc. did
back in the 2000).

It's also a little bit unsettling that when thinking about it this way, it's
somewhat of a transfer of wealth from people across the world, to a small set
of people in Silicon Valley. True, the companies are providing something of
value to the world, so maybe it's not so much a transfer, but the end result
is still that money was collected from people in other countries, and paid to
SV engineers/employees.

Again note that I may be completely wrong in my framework of thinking. Just
something I thought up while reading the article, no reference or research on
any of the claims.

------
psoots
The only bubble I see are of programmers who work at Google and Facebook
thinking most programmers have lives like theirs and make as much as they do.
Most surveys of programmer salaries do not conclude that they routinely make
$300k-$400k.

And when talking about just the top-tier tech companies, of course the economy
around them is bubble-like. That is the danger of allowing them to maintain
nearly monopolistic reign of their markets.

------
muzani
Bubbles happen when prices are much higher than the actual value. Usually
they're propped up by someone trying to resell the thing to a higher buyer, or
package it as an investment.

Real estate bubble is visible when the apartment ads say "good ROI" instead of
"nice place to live". Crypto bubbles appear when people are talking about
market cap more than they use it.

But right now programming is in an optimal situation. It's hard to do, making
supply low. Demand is very high; while we have all kinds of startups there are
more to do. That creates high prices. IIRC FAANG makes about $400k per
employee. In those situations paying $200k for a senior is far more
sustainable than other tech fields which operate at a much smaller margin.

------
dentemple
Working at a FAANG Corp is the bubble.

~~~
mac01021
So you're saying it's not sustainable?

~~~
dentemple
I'm saying that someone who works at one of those companies is living in a
bubble.

Most of us don't make such extreme salaries. But also, most of us don't worry
that our paychecks will suddenly pop.

If anything, most devs outside of SV and Seattle are underpaid rather than
overpaid.

------
TACIXAT
I've always wondered if the salaries in the industry are just keeping pace to
what all salaries should be at. What if they're not the bubble, but instead
everything else is just lagging? I guess that depends on if you think workers
should be able to purchase a home where they live, pay for child care, and not
live paycheck to paycheck.

~~~
moate
In an irrational market, rational decisions seem irrational? Interesting
hypothesis.

------
kevsim
Cached version since the original is down:
[http://archive.is/pm3QU](http://archive.is/pm3QU)

~~~
Maledictus
^ mirror

------
asabjorn
Paying a programmer 300-400k is marginal cost compared to the value generated
by their work, so no. Comany downside is controlled by most of the
compensation being company stock, in case this doesn’t hold.

The programs created make the companies that hire the programmers extreme
profits, in a way that scales by machines to serve an arbitrary amount of
customers.

Even small maintenance changes make millions or tens of millions, but when
they are done wrong they bring down systems they cost billions. That is why
skilled craftsmen are worth their weight in gold.

------
Ologn
> doctors, lawyers

Doctors only book so many patients a day. Lawyers are also working for a
limited number of clients.

An app I did myself (on top of a FOSS base), released independently, was
downloaded millions of times within a year.

Google back in 2011 had one billion MAU. In that context, a $150k+ a year
salary (plus equity etc.) for helping provide the content for those one
billion MAU is plausible.

Also Google is a web intermediary for web sites with content for consumers. So
Google benefits from the work of anyone who puts up a web site, contributes to
Wikipedia etc. as well.

------
OlafM
I reckon there are 3 factors here that determine the salaries, one being
mentioned in the article:

1\. Equity Most high "salaries" are more sharing of the profit or stock then
mere salary. Lawyers become partners and thus share in the profit the firm
makes (same goes for consultants)

2\. Supply and demand There are way more positions than people willing to do
the work.* So the ones who do, can pick 'n choose there employer. Thus work
conditions improve, as do salaries. Most other professions mentioned are high
stake jobs, but with more willing to do it * * . So once you're in, it is
still possible for the employer to demand hard work, because you're more
replaceable.

3\. Scalability The work of a doctor is limited to the amount of patients.
Lawyers can do large cases (then they get paid much), but most of them will do
work that effect a limited amount of people Code (especially at the big 5)
reaches literally billions of people. So the values you can possibly add is
huge.

* I think it is still kind of weird how many people don't even try to learn how to code (or scripting) while working in excel all the time, it's a magical barrier, few dare to cross.

* * I don't know why, but I would guess it's because (i) The sciences are viewed as arcane or simply unreachable for many people (self-claimed "I just can't do math") (ii) those job tend to have more social status (think Suits for lawyers & Grey's Anatomy for doctors, to name a few)

------
mrdodge
What was the salary of mechanical engineer vs an average American worker a
hundred years ago? I saw this a while ago and I don't remember the exact
numbers, but the multiple was far higher than it is today (something like
10x). Software Engineers are ultimately underpaid all things considered if we
consider Software to be a critical part of the economy.

I don't think Mechanical Engineers back then were managed by Project and
Product Managers though. They had much higher status.

------
sershe
I make in the ballpark of these numbers for the last couple years, and while
the giant stock grants have run out will still break or approach $300k for a
few years I suspect. My take on this is as such...

On the one hand, I have outrageous impostor syndrome - nothing I do seems
terribly complicated to me and I definitely don't put in 80 hour weeks unless
I'm on call; many people I work with seem to be smarter than me.

On the other hand, I do usually acquire a reputation of being very productive
everywhere I work, and having freelanced before I've seen loads of
outrageously bad code - literally every other project I was
"rescuing"/"optimizing performance" with an existing codebase could supply
thedailywtf with material for a month or two, and some could just be zipped
and published there. So it seems like the bar is (was? that was a long time
ago) actually pretty low.

Also, it's not necessary to be 3x as productive to make 3x as much - if there
are 1500 NFL players, then the best (more or less) 1500 football players are
going to get NFL salaries, whether they are "3x" the next guy or 1.3x the next
guy. If there are 100000 openings in companies that can make $1m per engineer,
100000 engineers are going to be rather well paid, even if the IBMs of the
world can only make $500k per engineer and thus don't pay so well.

On the fourth hand, I cannot see market not responding, like it demonstrably
did with lawyers (I have a couple lawyers in the extended family), with
oversupply of labor for such lofty salaries - especially as unlike with
doctors and to an extent lawyers, there are no medieval guilds in place
artificially restricting said supply.

On the fifth hand (sortof a duplicate of the third), as some have said above,
and as with lawyers, it's still possible to have elite earners with oversupply
of labor.

On the meta level, I'm not good at predicting the future (and I grew up in a
chaotic country), so I'm considering this an unique streak of luck and
treating it accordingly. In particular, saving a lot for thinner days ahead
should they materialize; not buying as much house as I can afford; and
postponing the two-year sabbatical I've planned to take, while the going is
good. The way I see it, if the luck never runs out I can retire early; if it
does at least I will be somewhat prepared.

------
debt
Sure why not? We’re also in an AI bubble, a cloud bubble, a blockchain bubble,
a machine learning bubble and a tech bubble. It’s getting super foamy.

~~~
porpoisely
Housing bubble, car bubble, etc. 10 years of economic growth and 0% interest
rates and a few trillion dollars of QE will do that. Once interest rates rise
sufficiently and the bubble pops, it'll hurt, but we get to get back on the
ride again. Rinse, repeat.

------
stevebmark
We're in a machine learning bubble for sure, it's what engineers are flocking
to for higher salaries. 90% of it isn't useful, but companies haven't yet
learned there's almost no return on investment.

------
woodpanel
TLDR: the answer might be
[https://en.m.wikipedia.org/wiki/Software_crisis](https://en.m.wikipedia.org/wiki/Software_crisis)

I‘m coding for almost 20 yrs now and used to think the same: „when will the
bubble pop?“, then it was „how long can this go on?“ until I ended up with
„ok, that’s weird, what the heck is keeping this bubble from popping?”

I was told throughout these two decades that I’ll be replaced by some offshore
developer from India within the next 5 yrs max. It never even came close.

To me it was against common sense, to climb up so much the social ladder like
I was fortunate enough to do, just by being exposed to programming.

Then, I saw a talk given by Uncle Bob where he spoke about the history of
software development. It was interesting throughout (like that the rate of
female programmers was almost 50% before the dawn of CS degrees), but he also
touched the “bubble” issue briefly.

He turned my perma-bearishness into ongoing curiosity: That we’re not in a
bubble but in an ongoing “software crisis”. A crisis existing basically since
the invention of programming languages. The theory has it that here aren’t
enough developers available and may never will be. Is it demand-side economics
on steroids what’s behind it? I don’t know.

But what struck me maybe the most is that I’ve never even heard about this
theory, and never did any of my much more experienced and better programming
friends and colleagues. The fact they didn’t knew kind of underlines the
theory: there is so much demand that there is simply no time nor need to even
tinker with the history of our craft.

------
aristophenes
I think this is being overthought a bit. Good programmers can generate a huge
amount of value, or reduce a lot of cost. Someone who is a little better can
double those values. Someone who is a little worse can make them 0 or negative
by decreasing the quality of the code. Therefore, good programmers are worth
paying a lot for. The amount of money available may change, the amount of good
programmers that are needed will change, but this formula will remain the
same. As long as average programmers are worth something, the best programmers
will be worth a lot.

Whether or not the best programmers actually get paid a lot depends on how
efficient the market is and I have no idea about that. When crap programmers
are getting paid a lot, then its probably a bubble.

------
jahaja
SV Bubble? Maybe. But looking at it more long-term, aren't all the incentives
there for programming to become a blue-collar (as in more modest pay) job?

* Good to great pay both attracts more people and makes employers supportive of policies to increase the labour supply.

* Cultural acceptance.

* Widespread access to computers and the internet. This was not the case just ~15 years ago.

* Low risk of automatization gets it promoted by governments all over the western world.

* Low barrier of entry. I mean come on, let's not pretend that work on most apps/websites today necessarily requires a CS degree.

* Remote work, in all its glory, may however increase competition for jobs.

I'm just worried about how far this will go given the currently rather
widespread anti-union sentiment - even after years and years of game industry
bullshit.

------
chrischen
Let's be honest: programming and another field of expertise are not mutually
exclusive, just like how being proficient in English is not exclusive to
whatever other job it is you're doing.

The longer people treat it that way the more money they will continue to leave
on the table for these Google/Facebook engineers.

You don't have to be a master programmer, just like you don't need to do four
years in college studying English, but unlike English, most non-technical
professionals still have absolutely no idea how a computer works even though
the world revolves around it. If any universal second language is important,
it's not English, it'll be a programming language.

------
midhir
I wonder about this.

It might be a huge bias but I would imagine a significant amount of
productivity gained in the economy, and thus new wealth created, over the last
couple of decades has been software driven. So it _should_ pay well, right? It
doesn't really matter that it's considered easy or hard, just scarce.

I've heard it, perhaps jokingly, stated that more than half of software that
gets built fails; it never finds a market or never meets completion. In that
case high-salaries are also a good thing as it increases the funding, and thus
social proof, required to start a new software project.

So, perhaps we have a way to go yet!

------
enthalpyx
"stress"

Being the engineer on-call when the website/service/app is down and the
company is losing $xMM/minute while you debug the problem is the very
definition of stress.

Some companies like Google cordon this responsibility off to SREs. While
Amazon has started developing a similar job family, the burden of supporting
critical services still largely falls to software engineers.

While software engineering is certainly not the worst job from a stress
perspective, my experience (particularly with operations at Amazon) is far
from the zen-like state the author describes. It can also be pretty exciting.

------
onyb
Meanwhile in Paris, you might be having a double masters in International Law,
but still be earning 25% less than an entry-level Software Developer with just
a Bachelor's degree. In most organisations, simply sort the employees in
increasing order of age, and qualifications; and decreasing order of salary;
and you're likely to find software developers top the charts.

Of course, the precondition is that you should be worth your salt, but finally
I have come to realise that salaries are dictated by market dynamics. Your
compensation is based on how difficult it is to replace you.

------
isthispermanent
Bubble, no. Supply is going up for engineers, traditionally trained or not. So
it all rests on demand, which I don't see calming. The real cliff for
programmers is when code starts to write itself.

~~~
idontpost
> The real cliff for programmers is when code starts to write itself.

Meh. People have been claiming that will happen since the first LISP machines.

Writing code isn't a technical challenge, it's a social one. Until self-
writing code can figure out how to extract business requirements from the mind
of hungover MBA and turn them into a technical design that can be repurposed
to meet what turn out to be the real requirements a year later (with zero
overlap with what the MBA came up with), I think my job is safe.

------
tabtab
Another factor is our tools are becoming more complex than necessary. I do a
lot of "internal CRUD" programming, and the GUI IDE's of the latter half of
the 90's took far less key-and-mouse-strokes to use, had more UI options, and
used screen real-estate better. (They were clunky at first, but got better
with time.) One could spend more time on analysis; you _didn 't_ need an army
of coders.

The Web bleeped that up. Everyone hoped HTML5 would fill in the CRUD gaps, but
it didn't. Thus, we still waste lots of time because the Web was not designed
for CRUD and shoehorning CRUD into it is like backing an 18-wheeler truck into
a parking slot. In the old days you just pointed your sadan steering wheel
into the parking slot and DONE. JavaScript-centric UI's have proven too
fragile. It's great for eye-candy, but not reliability.

Yes, I know there are some good Web stacks out there that can mostly overcome
this, but they are rare and/or hard for managers to recognize. Their urge is
to "keep up with the Joneses" even if the Joneses are doing something that
doesn't help typical CRUD. Nobody can tell fads from good stuff.

One good invention and/or new standard could wipe out half of CRUD coders. I
propose the industry experiment with a standard GUI Markup Language designed
to do desktop-ish things out of the box and be more stateful. Mobile-friendly
UI's are nice for mobile devices, but not good for regular office
productivity. Desktops and mice still rule work.

------
dehrmann
I was hoping this would go into how the demand from programmers is temporarily
high because X. Maybe AI learns how to program? Maybe we're just seeing
investment because of the smartphone revolution? Instead, it basically argued
that other jobs are harder. While true, that doesn't hold economic water. The
wages he's talking about are part supply and demand, part market conditions
and RSUs. All he really convinced me of is that wages will go down in a
recession because RSUs won't appreciate.

------
sam0x17
It would only be a bubble if there is some conceivable chain of events where
suddenly companies would want less programming than what they currently pay
for. That's just not going to happen barring a literal collapse of the
internet. That said, average programmer compensation is inevitably going to go
down as more and more programmers enter the workforce (though the high-end
salaries are going to continue to go up, as exceptional programmers become
rarer the more juniors enter the market).

------
tsumnia
No, nor does the United States' Congressional Research Service[1]. In a 2017
report, John Sargent projects that Computer Occupations will "see the largest
increase in the number employed (546,100), the largest annual average number
of labor force exits (75,800), and the largest annual average number of
occupational transfers (217,300)". In total, 58.6% of all science &
engineering jobs will be computer occupations.

Now, "is there a bubble"? Again, no. If we look at those numbers as hard
deadlines, then let's see how many students are leaving college with CS
degrees? The National Center for Education Statistics reports that only 60,000
bachelor degrees were conferred in 2015 [2]. Enrollment is still at its
highest point, but no where near the amount Sargent says we'll be needing by
2026.

I think the biggest concern to a programming bubble is the capacity challenges
we face in training these new developers. If you look at historical trends,
there is no dot-com crash right now. Maybe people getting scared because of
data analytics, but nothing as severe as 2003's web companies over-estimating
their worth.

Instead, I think this looks more like the bubble from the 1980's [3,4].
Roberts and Henn try to explain the cause for the drop in enrollment. Henn
focuses predominantly on gender representation in the media making females
feel like CS was "boy's only". Female enrollment is only now beginning to
return. Roberts, on the other hand, looks at how institutes handled the
increase in CS enrollment. Since there were only so many qualified
instructors, colleges began to make harder and harder qualifying requirements
for enrollment. Students, as a whole, got the point and sought out other
degrees.

So "is there a bubble?" maybe/maybe not; but it would be because there are not
enough qualified instructors to teach the need.

[1]
[https://fas.org/sgp/crs/misc/R43061.pdf](https://fas.org/sgp/crs/misc/R43061.pdf)
[2]
[https://nces.ed.gov/programs/digest/d16/tables/dt16_322.10.a...](https://nces.ed.gov/programs/digest/d16/tables/dt16_322.10.asp)
[3]
[https://cs.stanford.edu/people/eroberts/CSCapacity/](https://cs.stanford.edu/people/eroberts/CSCapacity/)
[4]
[https://www.npr.org/sections/money/2014/10/21/357629765/when...](https://www.npr.org/sections/money/2014/10/21/357629765/when-
women-stopped-coding)

------
mempko
If they paid you 'what you are worth' they could not make a profit. Since they
make obscene profits, by definition, they are not paying you what you are
worth.

------
rhacker
I think we'd have to ask a similar question if CEOs are currently in a CEO pay
bubble.

------
dzonga
Maybe programmers and a lot of workers are underpaid. If a company is making a
profit of at least $2mil per worker, paying that worker 300k$ seems like
theft. Though, we do have a problem not every company makes $2mil per worker,
but most of these corporations are robber barons, if you look at Executive
compensation vs average worker, difference is at least 21x. Most average
difference is 100x in the real world.

------
yholio
A key issue beyond the supply and demand of programmers is the wider
technological transformation of the economy. Programmers are highly
remunerated because they provide massive market value to the capital owners
and they do that essentially by automating, by teaching machines to do things
previously done by people. This activity seems to create significant capital
accumulation and machines don't usually forget what they learn or need to be
reprogrammed from scratch: once a problem is solved, its solution is
frequently made available to other programmers who can build on it to solve
even more complex problems previously thought intractable for computers.

If this continues unabated for the long run and we don't hit an intrinsic
automation plateau, it can logically have two possible outcomes: either
programming will become the main employment of humans and source of income,
which seems unlikely, or the capital owners with the help of programmers will
manage to make large swaths of the population unemployable.

Another feature of technological capitalism is that it highly conducive to
monopoly rents, walled gardens and strong barriers of entry. The early mover
advantage of Microsoft on the operating system market still earns it billions
in pure rents. So competitors who would like to change and equalize the
earnings distribution, for example by employing programmers in another
country, will be in general unsuccessful.

I know it doesn't seem like that now, on the contrary, the tech industry seems
like a wild west of endless possibilities and opportunity for all, but it's
worth pondering if the apparent "tech boom" isn't really a massive economic
shift for a very different, highly polarized and almost feudal society, with
the programmers acting as the samurai, the sell-swords used by capital-owning
rulers.

------
ltcoleman
No. I do not believe we are in a bubble. At least for skilled professions that
keep learning, the likelihood is the reverse. As more layers of abstraction
make it easier to produce business value, a smaller number of skilled
professions will be able to generate more and more revenue with less time.

Programming is different than doctors or lawyers. Programming in terms of
value can scale. Doctors can only see a certain number of patients or perform
a certain number of surgeries. A lawyer can only take a certain number of
cases. They produce value based on their time in each of these tasks. That
amount of value is somewhat fixed.

However, a skilled software professional can complete one project that
produces a large amount of business value, or the coder can develop a new
product that generates a long-tail stream of revenue over time.

For example, a coder that built the Google Ads Platform has helped generate a
tremendous amount of revenue for Google, and that revenue keeps pouring in.

The bubble is real, but for IT/SD professionals that tend to get complacent
with their skills. Traditional IT is getting abstracted away entirely. SD is
getting more and more complex as many more frameworks/knowledge is needed on a
yearly basis to do modern software development. Building a simple monolith is
no longer acceptable for many companies. One must learn modern distributed
systems.

The sad truth is that it will continue to take less and less resources to
accomplish the same business goals in the future. One must stay on top of the
latest technologies to climb on top of the coding pyramid. Luckily, this
pyramid is starting to segment based on Front-End, Back-End, DevOps, etc.
which means the truly skilled professions in those domains will rise to the
top and command salaries much higher than currently seen.

------
wonderwonder
Could not read the article, site is down; with that said I don't think we are
in a bubble. Software is essentially eating the world, replacing non software
jobs. Just look at grocery stores and the proliferation of self checkouts.
Then look at Amazon's concept stores where you just walk out with whatever you
want and your account is charged. All of these technologies lead to reduced
non tech jobs but an increase in the need for software engineers.

Self driving taxis and trucks are another example of the potential of software
to replace non technical jobs. As automation and technology increases it
appears that the need for non technical workers will decrease and the need for
skilled engineers will continue to increase. The future is coming and software
/ hardware engineers are it's architects. Unfortunately the chances that non
technical workers will lose jobs goes hand in hand with that.

~~~
gizmo686
It might not be a bubble, but what you are describing (which I agree with) is
not stable. At the moment there is a boom in software development because
there is a lot of software to build. But, as the industry stabilizes, we will
find that once we have built the software, then the software is already built.
At some point in the future, there will be an inflection point where there is
simply less software work to be done today then there was yesterday. I don't
know when this inflection point will happen, but it will happen.

------
tinktank
I didn't understand the bit of the refresher grant. If his grant is $50K a
year on joining, wouldn't it be 50K a year on refresh? Or is he making the
point that as you remain you get more refresher stock?

~~~
eloisant
Your initial grant is not "$50K a year". It's for example, "200k over 4
years". And it's not actually in USD, it's in number of stocks. So if the GOOG
stock is $1000, your grant would be "200 stocks vesting over 4 years".

Now when you get a promotion, you'll get a new set of stocks vesting over 4
years. If you get the promotion before the 4 years expire (usually the case)
it will overlap with your initial grant.

~~~
davidgay
Refreshes are not only on promotion.

------
01100011
There are many forces at play and I think it is impossible to say how things
will progress. However, the biggest worry I have is that the elimination of
maintenance and bug fixing tasks will dramatically reduce the need for
engineering hours. I don't see it happening in the next 10 years, but at some
point someone is going to figure it out.

If an ML system is able to extract the intended structure from a block of code
and somehow translate that into a known-good pattern you could see things
shift. I see it as being somewhat akin to human language translation.

------
jimbokun
"But the fact that it’s only happened in the last 5-10 years makes me wonder
if it will last forever."

This is absolutely false. There was a lot of talk about "Microsoft
Millionaires" in the 80s and 90s.

~~~
swimorsinka
Early employees who cash out are a bit different than the rank and file.

~~~
jimbokun
No, "Microsoft Millionaires" referred to a large percentage of Microsoft
employees becoming millionaires and how they changed the Seattle economy.
Stories like, don't kick the poorly groomed guy in shorts and flip flops out
of your expensive sports car show room, because he might be there to pay full
price in cash for a car and drive it off the lot.

------
conterio
The answer to this question is easy. It's all about supply and demand. The
demand for programmers is ever increasing with the way we are advancing as a
world. So the demand is extremely high for good developers. This will continue
to be the case going forward as become of a digital world. I suppose most of
the workforce in 50 years will need at least a basic programming skill set
like reading and writing. The ice block isn't freezing anytime soon, it's
outside in the snow, in Antarctica.

------
matchagaucho
_"I just wonder if these numbers are sustainable."_

How many Apple Engineers received their stock refreshers in Q3 at a $220 per
share strike price? (now at $150 share)

Like all equity components, the answer is market driven.

------
hellofunk
People look at these huge salaries but often forget the living costs around
them. I interviewed two years ago for a company in the Bay Area, was offered a
180K position. I was excited and it was very tempting. After I did the math, I
realized the money I have left over each month was higher where I was at,
which was not California. I decided not to upend my life for less financially
rewarding circumstances. There might have been other benefits, like being a
part of the tech culture there, etc, but just wasn't for me.

------
quotemstr
I remember the same phenomenon in 1999. It's absurd to imagine that supply can
continue increasing indefinitely without price being affected. Look at what
happened to the legal profession.

~~~
sct202
The starting salaries for bootcamp grads aren't really much to write home
about ($50k-$70k) except at a few select bootcamps; plus a fairly significant
fraction of the grads don't seem to get jobs from some of these places. A
bunch of bootcamps publish their data at
[https://cirr.org/data](https://cirr.org/data) .

------
mlinksva
Don't know whether high total compensation of programmers at some elite
companies and locations is a bubble or not, but interested in flip side of
question: how has and how will it spread? Have any of the many efforts to copy
Silicon Valley included a systematic effort to increase the compensation of
programmers in the Silicon _ region? Perhaps through a combination of
jawboning by boosters and leading employers or investors making a bet that
large increases in programmer compensation will pay off?

------
dev_throw
My take on this is that: yes, a small minority of devs are substantially
overpaid for their work right now. I don't think it will stop, since even if
there is a glut of new developers, the ones with production experience at
scale will always stand out from the fresh devs, and will be more prized for
that reason.

What may end up happening is the funnel narrowing at entry, that is the
salaries for brand new developers collapsing, while only a select few make it
to the top. It reminds me of professional sports.

~~~
hacknat
What does it mean to be overpaid? There are certainly professions that provide
more overall value to the world than software engineering and yet make less
money. So in a sense you could say every software engineer is overpaid.
Otherwise what does this mean?

------
bashwizard
I get the feeling that a lot of programmers (especially the older senior ones)
are overestimating their significance. It's like people don't want to accept
the inevitable future of AI and automation and be like "oh, code is never
going to write itself! nope, it's never going to happen! herp derp my job is
safe!".

Give it 10-15 years and the bubble is going to burst whether we like it or
not. If you're not into machine learning or deep learning at that point you're
screwed.

Change my mind.

------
MichaelMoser123
I think its because we saw this big consolidations and growth around the big
players. If the big guys happen to saturate the market then we will see a drop
in bonuses.

Is this run on big companies might be because of the end of Moores law: this
event brought some kind of stasis that benefits big established players, as
the big guys are now less afraid of disruption (as it is easier for the
upstarts to plan ahead if they know that you have two times the horsepower
within a year) Is that right?

------
dominotw
four ppl from my extended family have quit their jobs and joined "code school"
to become programmers this year. None of them have any programming background.

~~~
moate
I did that once. It was great. Got me to my dream job (spoilers: I do not
write code for a living).

~~~
dominotw
curious, what do you now?

~~~
moate
I work for a gaming/toy company managing RPG related miniatures (among other
things). It's not a very technical role, but the tech background helps in a
lot of ways.

------
DylanBohlender
There is a lot of bubble logic in these replies - things like "salaries are
destined to go up forever because they've gone up since the dot-com days",
"smart people in other fields are baffled by things we find trivial",
"programming is incredibly hard so it's obvious we should be paid more," etc.
There's probably a kernel of truth to some of these statements, but there are
eerie parallels to past bubbles here.

It is my opinion that we are not in a _programming_ bubble, but in a _venture
capital_ bubble. The latter causes the appearance of the former. Let me
explain the meat of how I think it works.

1) A well-to-do person decides to start a VC fund. This person recruits a few
high net-worth friends and convinces them to invest a sum of money in the new
fund. Let's say, hypothetically speaking, that this person gets $1m to play
with in total from 10 individual investors.

2) This new fund does around 10 unpriced seed investments with its $1m
(convertible notes). 50% of these companies do not go on to raise more money,
and thus the money spent on them is written off. The other 50% go on to raise
a priced A round, whereupon some bigger funds lead the rounds and mark up the
price of each company's equity by between 50% and 150%.

3) Our seed investor is now sitting on equity roughly worth $1.25m. This
person has made a 25% return on the capital under their management. They take
a 5% fee off the top - for a handsome payday of $62,500. The investors are
pleased.

4) Then, this thought crosses our brave new fund owner's mind: "Boy, I'm
really good at this." So our owner goes out to a wider network and solicits
$10m this time, with the intent to participate in A rounds instead of seed
rounds. They cite their successful 25% returns in seed stage companies, and
people scramble to hand them money to manage.

5) Goto step 2 (but increase the numbers and change up the preferred
investment round occasionally)

The sums get bigger, the paper returns get bigger, and the management fees get
bigger. But what brings this all to a crashing halt? Where does all that VC
money come from?

I believe that this is all a consequence of the zero-interest rate environment
in the United States throughout the last decade. People with assets have
largely had no attractive places to put their money, so they were forced to
chase riskier and riskier investments. Venture capital was the perfect target
- the compelling narrative of technological progress makes for a feel-good
investment avenue, and the general opacity of tech concepts to non-technical
people makes the mystique that much more compelling. Plus - there's a
mathematical strategy here! Why buy bonds and get a lower rate of return than
inflation when you can chase unicorns? Why not take the probabilistic and
"scientific" approach by investing in 100 companies - expecting 90 to die, 9
to do okay, and 1 to be a mega-success that makes your investment worth it?

The hunt for the fabled "unicorn company" is this economic cycle's equivalent
to "housing prices are always going to go up." _But the models work!_ you say.
_The success and failure probabilities are accurate!_ So were the models that
led to mortgage-backed securities - if we bundle enough of these loans
together, on average they will have to be profitable - right? The problem
then, as now, is that such a model is only accurate when the broad
macroeconomic conditions underlying it remain true. When you run out of money
coming in, the music stops. Loan defaults started to spike and the MBS model
fell apart. Likewise, I suspect that less money entering the VC world will
presage the whole thing falling apart - and as interest rates climb, it's only
a matter of time until debt is more profitable again and the easy-money faucet
turns off.

I've ranted for a bit, so you're probably wondering - how in the hell does
this relate to the OP's article? Let's now address the other side of the
equation here - where does all that VC money _go_? Well, that money that was
invested in all those failed startups (or the successful ones) gets spent on
something. But what? It clearly doesn't all get spent on catered lunches and
ping pong tables (much to the chagrin of our industry's critics). But it does
get spent somewhere - and I'd hazard a guess that the most popular targets for
that spending would be Facebook Ads, Amazon hosting, Apple hardware, Google
Ads, Microsoft software, etc. _The VC money gets spent on stuff the tech
giants are selling, fueling the dramatic increase in their share prices over
the past ten years._

Given that OP's article makes the point that compensation is huge and
_primarily driven by share price increases_ , it's easy to see how VC money
could be actively impacting this situation. But as a gut check - if all of
this talk of "US economic conditions fueling a domestic venture capital
bubble" does have a grain of truth to it - what would you expect economic
conditions for software engineers to look like in other parts of the world?

London: [https://www.glassdoor.com/Salaries/london-software-
engineer-...](https://www.glassdoor.com/Salaries/london-software-engineer-
salary-SRCH_IL.0,6_IM1035_KO7,24.htm)

Paris: [https://www.glassdoor.com/Salaries/paris-software-
engineer-s...](https://www.glassdoor.com/Salaries/paris-software-engineer-
salary-SRCH_IL.0,5_IM1080_KO6,23.htm)

Berlin: [https://www.glassdoor.com/Salaries/berlin-software-
engineer-...](https://www.glassdoor.com/Salaries/berlin-software-engineer-
salary-SRCH_IL.0,6_IM1020_KO7,24.htm)

Interesting, right? Proximity to the nexus of Sand Hill Road does appear to
have an impact. I'm no data scientist, but I imagine there's enough publicly
available data about venture rounds and salaries that a more rigorous
assessment of this general thesis is possible. If anyone knows of existing
studies, please let me know.

------
sovietmudkipz
I bet compensation in the US will go down once businesses figure out a way to
really outsource to programmers around the world.

The last push failed but businesses will adjust their conceptual models and
try new things. Eventually, something will stick.

Heck, maybe the last round failed because the technology culture needed to
develop more in different areas. If so, how long before local geeks do to
their area that has apparently already happened in the states?

------
d--b
There's only one way salaries go down: over-supply.

Demand is super high because of 2 things: 1\. Tech companies are very
profitable 2\. There is a lot of cash in the economy (thanks to QE) a lot of
which got invested in big tech and startups.

And supply of high quality senior engineers is not there yet.

When the wave of young kids who chose to do MIT instead of Harvard Law School
gets older, things should get more in line.

At least that's how market theory is supposed to play out

------
mcfunk
It would be very instructive to see a studied comparison of what factory work
looked like during its peak as a well-compensated profession in the US, and
what is happening in software development now. Certainly there are meaningful
differences, but I am pretty driven by a concern that we are the factory
workers of the future -- people whose profession used to guarantee a
comfortable wage, but no longer.

------
utopcell
The comparison is between senior (5-10 years of experience) positions at
FAANG, not all software companies, and doctors over all hospitals. How much do
doctors make at the top 5 hospitals after 5 years ? How about top lawyers ?

In terms of job difficulty, I see no argument there: I can't imagine the
stress a surgeon has during an operation; especially compared to a computer
scientist such as myself.

------
licebmi__at__
Will the demand of software in the economy go down? Unlikely.

Could the economy itself go down? I'm betting it will.

My take is that we currently have bullshit economy, and that the software
industry is a big part of that bullshit economy, almost funded entirely by it.

Of course there's a lot of essential software, but if the bubble of bullshit
software pops, then the industry as a whole will suffer a lot.

------
darepublic
I often think this (we are in a bubble) and feel a mild sense of dread. It is
time consuming and difficult still to make top notch websites, but I don't
think it will always be that way. Eventually we will be able to churn them out
like little plastic toys from China, thanks in part to all this nice
functional composable programming :)

------
cambaceres
The question is really: will the (value/time unit) a programmer can generate
for a company increase or decrease in the future? Since the world keeps
getting digitalized and connected, I think the answer pretty clearly is that
it will increase.

------
hintymad
IIRC, $100K a year before 2008 was considered pretty high compensation in the
valley, and things started to change around 2009. The total compensation of
software developers started to increase by double-digit percent almost every
year.

------
purplezooey
I know it sounds simple but local city councils have much of the blame here.
They are underpowered to deal with the influx of workers for the past two
decades making the salaries necessary to attract people.

------
shkurkin
Bit off on the law salaries - big law is pretty locked at ~190k to ~450k for
associates base bonus (most firms entirely dependent on year). For partners,
many making 1M /year.

------
Hithredin
About the last sentence: If only we will still need developers in the coming
10 to 20 years... I hardly see how 'AI' (note the quotes) could not replace
them.

------
stackzero
I think the high wages are due to a lack of understanding from non-
programmers. Non-technical folk see it as scary or hard to understand so would
rather pay someone else to handle that stuff. We're on the inside looking out,
not everyone wants to understand. As I'm sure we're all familiar with- i.e.
the conversation killer of explaining our day job or even mentioning I'm in
software/IT/programming etc.

------
aerophilic
Anyone have an alternative link/mirror to the article? Seems the source site
is having issues serving pages...

------
sprsimplestuff
"Maybe with how important software is becoming in the economy this is the new
normal"

It is definitely the new normal.

------
microdrum
He is postulating a programmer comp bubble, not a programming bubble.

------
jbverschoor
Yes we are. omg stop the horror

