| There is one point where the article asks why programmers seem to get compensated well compared to other professions. > The second most common comment that I hear is that, of course programmers are well paid, software companies are worth so much, which makes it inevitable. But there’s nothing inevitable about workers actually being well compensated because a company is profitable. If we look at this list of the most profitable companies per employee, we see companies that pay well, like Alphabet (Google) and Facebook, but we also see hardware companies like Qualcomm, Cisco, TSMC (and arguably ARM now that they’ve been acquired by SoftBank) that don’t even pay as well software companies that don’t turn a profit, and that the compensation between the software companies that are listed isn’t very strongly related to their profit per employee. The relevant barriers to entry perhaps aren't to programming-the-skill, but programming-the-business-activity. In other words, the barriers to entering business of profiting from programming. And that makes software engineers higher priced commodity because there is higher competition from other companies, but also self-starts. Hardware companies don't have pay their engineers as well because those engineers have a harder time leaving for other businesses. There are fewer capitalized companies, and self-capitalizing a chip HW business is very difficult. (and arguably the many smaller company options in that industry are rapidly consolidating - so employer options are going down rapidly). So in the end software is paid well perhaps because the software profession deals with business areas which yield high value return on the labor, _and_ the low capital business barriers to those activites supports higher competition for software labor. |