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by AnthonyMouse 197 days ago
> An optimization coming from an engineer in Taiwan saves you the same money as if it comes from an engineer in SF but the SF engineer gets 8x the reward for doing the work.

Suppose you have a thousand engineers and those thousand engineers generate ten billion dollars in annual profit. How much do they each get paid? They amount they're worth? Nope, the amount they'll accept.

If you live in the US and you have the wherewithal to be an engineer then you could also have been a doctor or a lawyer or some other high paying occupation. And many of those can't be fully remote because they have to see domestic patients or interact in person with local courts or clients. Which means that if you want someone in the US to be your engineer, you need to pay them an amount that makes them want to do that instead of choosing one of those other occupations. Whereas the one in Taiwan doesn't have the option to become a doctor in San Francisco and is therefore willing to accept less money.

So why don't companies just hire exclusively the people in Taiwan? There are all the usual reasons (time zones, language barriers, etc.), but a big one is that they need a thousand engineers. So they and their competitors hire every qualified engineer in Taiwan until Taiwanese engineers reach full employment, at which point the companies still don't have all the engineers they want. And when the average engineer is making the company ten million dollars, paying San Francisco salaries is better than not having enough talent.

So then why doesn't every smart person in Taiwan become an engineer? Because the companies hiring engineers there are only paying Taiwanese wages, and then they're not any better off to do that than to become a doctor or a lawyer in Taiwan. And if they would pay higher wages there, the local economy would have to start paying local doctors and engineers more to keep them all from becoming engineers, and then you would only get a modest increase in the number of engineers for a significant increase in compensation. Which is still what happens, but only slowly over time, until the wages in Taiwan ultimately increase enough to no longer be a competitive advantage. And companies don't want to make that happen faster because then they'd have to pay higher salaries in Taiwan.

1 comments

Not everyone who can be an engineer can also become a doctor or a lawyer. Different requirements and tolls on your mind and work style that aren't interchangeable for everyone.
There are two reasons that doesn't matter. The first is that it's untrue more often than not; plenty of people could do both. And the second is that "doctors and lawyers" are just arbitrary stand ins for high paying domestic jobs. They could also become physicists, commercial airline pilots, Wall St. quants, actuaries, etc.
>plenty of people could do both

Citation heavily needed.

Because here in the real world the barrier to entry in SW engineering jobs is significantly lower than the law bar or med school. Not to mention cheaper.

And yes of course, Americans have the highest salaries in the world for white collar professions, what other new information do you have that we don't already know?

> Citation heavily needed.

Have a look at the scatter plot for math and verbal SAT scores:

https://www.statcrunch.com/reports/view?reportid=21828&tab=p...

There is a significant correlation between higher scores on one and higher scores on the other.

> Because here in the real world the barrier to entry in SW engineering jobs is significantly lower than the law bar or med school. Not to mention cheaper.

The barrier to either of those professions is getting good grades and then scoring well enough on a standardized test, and the entire premise is that the professions pay well which is how people pay back the loans.

I can become a SW engineer without a degree of any kind, it's only helpful, but becoming a doctor requires everything you mentioned
Which is why many medical specialties pay more on average than engineers get. See also efficient market hypothesis.
>There is a significant correlation between higher scores on one and higher scores on the other.

That really doesn't mean SW engineers could be good lawyers or doctors. It's a very superficial evidence.

Your high sat scores won't prevent you from puking at the sight of corpses or diseases.

There's way more to performing in medicine that sat scores.

> Your high sat scores won't prevent you from puking at the sight of corpses or diseases.

Which only applies to a minority of people, and even that minority of people could still become an orthodontist. Likewise, if your SAT scores are 800 math and 450 verbal then that's quite uncommon and you probably shouldn't try to be a lawyer but you could still be a quant, and if you have certain medical conditions then you can't be a commercial airline pilot but you could still be a dermatologist.

It doesn't matter if every individual engineer has every individual option available to them when the overwhelming majority of engineers have a significant variety of alternatives.

> There's way more to performing in medicine that sat scores.

There is way more to performing in <anything> than <any individual thing>. But we use these things as proxies because they're designed and intended to be proxies and they're the thing for which data is available if data is the thing you want to inspect.