[christopherslee]

I'm never sure what the point of these articles are. It's supply and demand. If there's a crunch, there's more demand then supply. When that happens prices go up.

So really the tl;dr is, companies want more talent at the same price.

[potatolicious]

> "So really the tl;dr is, companies want more talent at the same price."

This is not unreasonable. I know around these parts we like to think that developers are the God-Kings of the universe, but there are real negative consequences to the seemingly infinite geometric growth of developer salaries (currently, in the NYC area anyways, clocking in at least 10% a year).

And I say that as someone who is a huge, direct beneficiary of these insane salaries.

We keep complaining around here about the influence of VCs on the industry, about how everything is oriented around landing the next round of funding. That we think about runways more than we think about creating useful things.

We also complain about how founders are giving up increasingly large pieces of equity just for the capital to get off the ground, and that the dream of tech entrepreneurs changing the world is constantly compromised by all of the above.

We also complain about the power large corporations have over small businesses and can muscle them around in the market.

All of these come down to the price of developers. The more we get paid, the more capital founders will need to start companies, and the more power investors will have over entrepreneurs, their companies, and their employees.

Huge paychecks for developers only plays into the hands of wealthy investors who now consume an ever-increasing influence, and who wind up owning more and more of the fruits of innovation.

The more we get paid, the more it benefits large, established corporations, who have the mature, optimized business models to afford huge salaries, and the more we handicap small, starting businesses who do not yet have the revenue/employee to sustain high burn rates.

The more we get paid the fewer true bootstrapped companies we will see, since there is now an increasingly insurmountable cliff between "founders in a garage" and "first hire".

The more we get paid the more types of businesses will be categorically excluded from existing because they're not profitable enough to pay huge salaries. Just recently I turned down an offer from a company doing tremendous social good - the salary they offered would have been highly competitive a mere two years ago, but the market continues to inflate. I fear businesses that are highly positive to society, but not hugely profitable, will simply no longer exist in the future.

Don't get me wrong, I enjoy being paid a shitload of money to do what I love, but understand that there is a point where increased developer compensation is a net negative for us all, and that we may already be past that point.

The world is bigger than our bank accounts (sad, I know).

[x0x0]

You're aware you don't have to accept the salary offered, right? You can take less, and I even bet few employers will complain. I gonna let you start the trend and I'll hold back though.

I think you misread the complaints: to my ears, they are more about "how on earth is that useful" or "another company solving the problems of young upper middle class urbanites" (viz Breather [1], or the 5 (and growing!) laundry startups respectively) [2].

Finally, businesses need to reach a mutual agreement with their employees. Startups and small companies are amazingly stupid; the standard playbook for creating a business is do things big companies can't that you can because you're small, ie make your smallness a positive instead of a hindrance. Somehow, none of them are willing to do that with employees. So, for example, I'd love to work remotely. Virtually no companies are interested. I've also repeatedly offered to trade 10% of my salary for the ability to 4 weeks of vacation in a row, but no-one accepts the offer. If you choose to compete directly with {goog, fb, etc} then you're competing on their terms and will probably lose.

[1] http://techcrunch.com/2014/09/04/breather-series-a/

[2] I submit, w/o proof, laundry startups are a symptom of how shitty a city sf is. In a real city (ny) there are wash & folds near your apartment; you hand them a hamper and either pick up clean clothes or they drop them off at your apartment. No need for smartphones and deliveries and other bs.

[potatolicious]

> "You can take less, and I even bet few employers will complain. I gonna let you start the trend and I'll hold back though."

Which is why I won't do it. It might be a symbolic gesture, but it'll also be useless.

Expecting people to take voluntary pay cuts is unrealistic, it also overlooks a fundamentally better solution: increasing supply.

Growing the labor pool is good - it means more wealth and more employment all around. It means better lives for more people (as opposed to reducing the quality of your own life for no apparent purpose). It means more people in our community, it means more technologists will exist, and a larger portion of the population will understand what we do.

I will gladly take a pay cut if it means more people have joined the fold and enjoy the upper-middle class income that was previously out of reach.

> "I submit, w/o proof, laundry startups are a symptom of how shitty a city sf is. In a real city (ny) there are wash & folds near your apartment"

Hehe, agreed on all counts. I too am of the opinion that a large number of startups exist solely to paper over what is a civic planning failure of gigantic proportions. SF is not a functioning city, it is an embalmed tribute to the 1940s, kept "alive" solely by the massive and unending injection of cash.

[x0x0]

It would be far from useless for your employer for you to take less money, but fair enough.

Growing the labor pool is far from good when the goal is what passes for leadership in the valley -- pmarca, zuckerberg, larry page, et all -- are really advocating: avoid investing in education, or growing the workforce domestically, in favor of importing cheap foreign-educated labor which can then be exploited via our pseudo-indentured servitude h1b system. Most of these folks already let their ethics show w/ their engineering wage cram-down, along with their tax avoidance schemes which reduce funds to the government which heavily subsidizes their industries via, for example, public support of education of the skilled employees.

There are plenty of good engineers available in the US. You can do any of:

hire remote employees

pay better so that people can afford to live in the valley without making huge financial sacrifices, or use your leadership role to attack any of the things (transport, nimby, lack of housing, lack of dense housing) that make living in the valley so expensive

foster an engineering pipeline and work culture that doesn't systematically exclude women (double your potential employee base alone), plus other minorities

But since they make none of these changes, I oppose any increase in visa allotments.

[dropit_sphere]

>The world is bigger than our bank accounts (sad, I know).

Wait a minute, wait a minute. Why? I mean, seriously, why? Public companies exist to fatten shareholders' bank accounts. Privately owned companies exist to fatten their owners' bank accounts. I submit that the world is no bigger than our bank accounts.

Also regarding founders giving up large amounts of equity to VC's so they can afford developers: there is a very simple solution. Give employees more equity. Take out the middle man.

[potatolicious]

> "I submit that the world is no bigger than our bank accounts."

Sure, but even in that world view ever-increasing developer salaries is sacrificing your long-term interests for short-term ones.

A tightening of the ability for people to start new companies will mean fewer choices in employers down the line, and it will mean less diversity in work environments, cultures, types of work, etc. All of that works actively against you.

Increased investor influence means less authority for businesses to run themselves as they see fit. I'm sure I don't need to explain how that works against you.

An elimination of smaller businesses means consolidation of employment into fewer, larger employers, who now wield more and more power over you personally.

> "Also regarding founders giving up large amounts of equity to VC's so they can afford developers: there is a very simple solution. Give employees more equity."

Equity isn't magic. The amount of equity you have to give to make a $10K discount on salary make sense is a lot.

If you crunch the math you'll realize that even if the founders themselves are perfectly altruistic and literally take no equity, the size of team you can afford to hire with equity, at these current salaries, is very small.

And will continue to get smaller as compensation increases.

The effect is ultimately the same - categories of businesses, types of ideas, become uneconomical to explore because the cost of hiring - whether in hard cash or in equity - simply doesn't add up.

As is often the case, the common good is good for you because - surprise - you don't exist in a vacuum from the rest of society.

[dropit_sphere]

>A tightening of the ability for people to start new companies will mean fewer choices in employers down the line, and it will mean less diversity in work environments, cultures, types of work, etc. All of that works actively against you.

This is getting strange: employees have too much power, and so they will have less power? In this dark future, what is to stop Joe Dev and his four friends from starting a company while living on the piles of money they've stacked up?

Further, in said dark future where only the corporate moguls survive and have beaten-down developers shackled to their cubicles, why do the moguls continue paying through the nose? If they have so much power over developers, don't they as soon as possible cut developer salaries, allowing smaller companies to woo them away?

>Equity isn't magic. The amount of equity you have to give to make a $10K discount on salary make sense is a lot.

I can only conclude that either developers are being exploited or that we're in a bubble, then, because VC's make that exact money-for-equity trade.

>As is often the case, the common good is good for you because - surprise - you don't exist in a vacuum from the rest of society.

I would take this much more seriously if there were a Developers' Union that served to erect barriers to entry. But in fact, there's the exact opposite, with bootcamps, Khan Academy, open-source tools, blogs, and people getting jobs without degrees. I have a hard time conceiving of a less jealous profession.

[hkarthik]

> Also regarding founders giving up large amounts of equity to VC's so they can afford developers: there is a very simple solution. Give employees more equity. Take out the middle man.

That's been tried a lot and is often referred to as "sweat equity". Most people won't go for it when there's 5 jobs across the street that will offer cold hard cash which they have obtained by getting a premium on equity with a VC.

[sheepmullet]

"That's been tried a lot and is often referred to as "sweat equity". Most people won't go for it when there's 5 jobs across the street that will offer cold hard cash which they have obtained by getting a premium on equity with a VC."

How many startups offer the first few employees a reasonable amount of equity (>5%)? Most startups will offer 1% if you are lucky.

[dropit_sphere]

If, as a founder, you don't have the capital to execute your vision, it falls on you to convince people that it will be profitable for them to trade real resources for as-yet-valueless equity. Developers will take equity if they think it's worth something.

I don't understand why the natural response to "can't afford good developers" is "pay them less." Maybe the company just deserves to die.

Founders' fundraising problems are...not my problem.