Tech Salaries Stagnant Despite Low Unemployment: Survey(insights.dice.com)
insights.dice.com
Tech Salaries Stagnant Despite Low Unemployment: Survey
https://insights.dice.com/2019/01/29/tech-salaries-stagnant-low-unemployment-dice-salary-survey/?CMPID=EM_RE_UP_JS_AD_DA_CP_A_&utm_source=Responsys&utm_medium=Email&utm_content=&utm_campaign=Advisory_DiceAdvisor_A
13 comments
A trend I've seen is using salary consultation services that peg the company compensation to rest of market. When enough of an industry does this it has the same result as price fixing but without collusion.
^^^^ This. There seems to be a built in incentive for these "salary surveys" for corporate sites like Dice to do this which is why actual salaries tend to be higher. It is funny to watch companies that rely on these and low ball surveys struggle to get good people.
Thats not how it works. You cant put prices unilaterally in a market: a single company offering more would capture all talent.
That's not how it works. Educated, creative workers look for more than just salary. Increases in autonomy, purpose, and opportunity for mastery are often viewed as more valuable than money (once threshold levels of income have been crossed)[1]
[1] Drive by Daniel Pink
[1] Drive by Daniel Pink
That is captured by the word 'more'
BS. in a comment about pricing "more" does not include complex concepts like autonomy - it clearly only referred to money.
I don't buy it. FAANG pays X, so other companies know they need to pay 1.3X to hire FAANG level engineers. So the info sharing may help FAANG collude, but it won't suppress wages for those who can be poached from FAANG. That's assuming there aren't any behind the scenes no-poaching agreements.
https://www.cnet.com/news/apple-google-others-settle-anti-po...
https://www.cnet.com/news/apple-google-others-settle-anti-po...
Are there many companies that can pay 1.3x of FAANG compensation? One of the big reasons people go work at the big 5 is the pay.
Just SV unicorns usually, and even then a lot of it is speculated value.
But the unicorns definitely pay if you're above a certain experience level - and if you build the correct professional network you can basically demand it.
But the unicorns definitely pay if you're above a certain experience level - and if you build the correct professional network you can basically demand it.
Decacorns more accurately. Lots of mediocre paying startups out there with 1-2 billion valuations.
Google is famous for lowballing and downlevelling so at least in G case it’s not always the case.
I'm not so sure... plenty of software engineers will gladly accept less than X to NOT work at a FAANG company.
>I don't buy it. FAANG pays X, so other companies know they need to pay 1.3X to hire FAANG level engineers.
no. The rest knows that they can pay 0.3-0.5X to hire the rest of the engineers. C people hire C people and there are always more than enough C people around. Our BigCo has no talent shortage for example(we'll even be cutting 5-10% in the next few months - just fat trimming, the company has no financial issues forcing to do it), and i have hard time imagining what would a FAANG level engineer would be doing around here - try to imagine a Stanford CS MS grad with the thesis in deep learning helping a huge enterprise customer through 6 stages of grief during the escalation call :)
The overall stagnation is only overall. Inside the tech salaries distribution there is a structural change of it becoming strongly bi-modal. So there is very high competition for talent and very high salaries (Google L5/6/7 medians being like 550/650/750 with the rest of FAANG being similar) at the high segment, and the rest just happily chugging along with 2% yearly CPI increase at best which actually means slowly sliding downhill instead of mere stagnation.
no. The rest knows that they can pay 0.3-0.5X to hire the rest of the engineers. C people hire C people and there are always more than enough C people around. Our BigCo has no talent shortage for example(we'll even be cutting 5-10% in the next few months - just fat trimming, the company has no financial issues forcing to do it), and i have hard time imagining what would a FAANG level engineer would be doing around here - try to imagine a Stanford CS MS grad with the thesis in deep learning helping a huge enterprise customer through 6 stages of grief during the escalation call :)
The overall stagnation is only overall. Inside the tech salaries distribution there is a structural change of it becoming strongly bi-modal. So there is very high competition for talent and very high salaries (Google L5/6/7 medians being like 550/650/750 with the rest of FAANG being similar) at the high segment, and the rest just happily chugging along with 2% yearly CPI increase at best which actually means slowly sliding downhill instead of mere stagnation.
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Job market is sort of similar to the real estate market. If you're shopping for a house (or looking for a job), it's pointless to look at the "market as a whole", because that's not the segment you're in: you're shopping for something narrow and specific.
A much better statistic would be to break things down by specialization, seniority, and whether or not a person had a stint at FAANG (which, and this will be deliberately misinterpreted, is a proxy for not completely sucking as an engineer). It's plausible that things have stagnated or gone down in the lower-skill segments with over-saturated labor supply. But anecdotally, on the higher end and in the segment where the talent is relatively scarce, I've never seen it better than it is now.
A much better statistic would be to break things down by specialization, seniority, and whether or not a person had a stint at FAANG (which, and this will be deliberately misinterpreted, is a proxy for not completely sucking as an engineer). It's plausible that things have stagnated or gone down in the lower-skill segments with over-saturated labor supply. But anecdotally, on the higher end and in the segment where the talent is relatively scarce, I've never seen it better than it is now.
Also should be noted that the runup in tech valuations has meant that engineers who joined a few years ago at a fang have seen their stock grants go up a lot in value. Now, to be able to hire experienced engineers from each other, companies have upped the size of their signing bonus and initial grants to match the run up in value of unvested stock.
> Job market is sort of similar to the real estate market.
It's even more straightforward than that; tech salaries, like real estate prices, are heavily influenced by interest rates.
It's even more straightforward than that; tech salaries, like real estate prices, are heavily influenced by interest rates.
You can apply the same reasoning, perhaps in an even simpler way, to the “low unemployment” part of the statement.
“unemployment” is a stat defined at general population level, reaching well beyond the engineering space.
Low unemployment means it is probably harder to hire someone out there, but it does not contain any information about how is now harder/easier to hire engineers, let alone tech engineers.
Absolutely. Talking averages is pointless on most topics where stats are presented. I always want to see both the distributions conditioned on several important variables, as well as marginalized versions thereof for each variable, but such nuance is not commonly available in public discourse. And when it is, people are shocked that it contradicts the simplistic world view they've been sold earlier.
The article doesn't say, but I'm curious about the effect of the changing population has on this. I don't know the exact numbers, but if tech unemployment is low and salaries have remained on average the same, that could also be due to adding a lot of entry-level engineers. If that's the case then saying that tech salaries are "stagnant" could be misleading, because individuals in the population are not generally stagnating.
Wow. In this thread, I am seeing a lot of people severely overestimating the percentage that FAANG employees comprise of the total market.
Just as the Bay Area and New York have real estate markets that are outliers of the rest of the country, so are the salaries outliers for the rest of our industry.
The report covers the industry as a whole, and demand for developers is growing just about everywhere. The questions the report raises can't be answered solely through the lens of Silicon Valley.
There is a lot of evidence that wages aren't rising across the entire economy, even with a tight labor market. I don't know of anyone that has proposed a solid economic theory for why that is, but it looks like our industry is only part of a larger trend.
Just as the Bay Area and New York have real estate markets that are outliers of the rest of the country, so are the salaries outliers for the rest of our industry.
The report covers the industry as a whole, and demand for developers is growing just about everywhere. The questions the report raises can't be answered solely through the lens of Silicon Valley.
There is a lot of evidence that wages aren't rising across the entire economy, even with a tight labor market. I don't know of anyone that has proposed a solid economic theory for why that is, but it looks like our industry is only part of a larger trend.
I'd be curious to see what job descriptions made up the survey. There's easily more than $100k difference between the something like a junior help desk analyst vs a senior sw engineer, and that's not even getting into FAANG compensation levels.
If you mix all of those roles into the same bucket for this survey, it makes the average salary number somewhat useless. Not to mention that geography plays a big role.
If you mix all of those roles into the same bucket for this survey, it makes the average salary number somewhat useless. Not to mention that geography plays a big role.
This link has a pretty good explanation of why the supply-demand model for the job market doesn't work: https://www.bloomberg.com/opinion/articles/2018-04-05/supply...
In tech sales at startups there has been a significant uptick in base salaries and total compensation packages. The most lucrative companies two years ago are fighting to remain relevant (when they haven't updated their compensation packages). It's not all good as it does mean that there's much less margin than there was a few years ago, but as other commentators have pointed out, this data is less than worthless.
I have a pretty good pulse on B2B software sales comp data (because that's my job), but I know nothing about how marketers or engineers or FAANG pay. It's like trying to make a generalization about "Finance" but then putting together a compensation survey that takes in the M&A rainmakers at Goldman Sachs in with retail tellers at Bank of America and gives you an average. Pointless.
I have a pretty good pulse on B2B software sales comp data (because that's my job), but I know nothing about how marketers or engineers or FAANG pay. It's like trying to make a generalization about "Finance" but then putting together a compensation survey that takes in the M&A rainmakers at Goldman Sachs in with retail tellers at Bank of America and gives you an average. Pointless.
That's all with a fairly strong USD. It means that outsourcing buys you more developers abroad than with cheap USD.
The barriers to switch jobs (tech interviews) are so high that people who are willing to switch may not be able to. This reduces their negotiating power in asking for raises.
I wonder how much of this is because students don’t count in unemployment statistics. Most new grads from non-elite schools have trouble finding their first job, but do manage to line one up while they graduate. However, during the time they’re trying to line up a job, they’re effectively behaving as unemployed job seekers, rather desperate and willing to accept low wages for example.
I'd bet it's just a function of what people are willing to do the job for. $93k gives you a very comfortable lifestyle, and tech workers tend to be much more motivated by the work itself than their peers. Those who really care about getting rich will go to SV and do a startup. So there's not as much pressure for increase.
Er...isn't the general agreement that if you want to get rich you absolutely should not go work for or found a startup but instead get a steady job at big corp and live below your means? People are always on about how shares in a startup should be counted as $0 compensation. Not to mention $93k doesn't go very far in places with large populations and high job prospects.
1) I assume the $93k isn't in SV and Seattle
2) The general wisdom if you want to get financially well-off is what you describe. Those who'd prefer to risk it all for a shot at being filthy rich do startups.
2) The general wisdom if you want to get financially well-off is what you describe. Those who'd prefer to risk it all for a shot at being filthy rich do startups.
Some people on this thread think of "comfortable" as:
"Own a decent house/condo within 20 minutes of work", and they're right, Seattle/SF isn't "comfortable" at 93k
Everyone ELSE on this thread needs to learn how to manage their finances. $93k in Seattle is $65k after taxes, call it $50k after putting $15k a year into your retirement plan.
Remainder: $4100 a month post-tax
You can rent a small apartment within 30-60 minutes of downtown for $1500 a month, leaving $2600 for utilities, groceries, entertainment, etc. That's a good $50 a day left over for food and entertainment, easily.
I'd call that comfortable, personally. That said, I wouldn't take an offer in Seattle for less than $200k and I wouldn't take an offer in Silicon Valley for (SeattlePay+$12,000)/0.9 because of the higher rent and state income tax
Everyone ELSE on this thread needs to learn how to manage their finances. $93k in Seattle is $65k after taxes, call it $50k after putting $15k a year into your retirement plan.
Remainder: $4100 a month post-tax
You can rent a small apartment within 30-60 minutes of downtown for $1500 a month, leaving $2600 for utilities, groceries, entertainment, etc. That's a good $50 a day left over for food and entertainment, easily.
I'd call that comfortable, personally. That said, I wouldn't take an offer in Seattle for less than $200k and I wouldn't take an offer in Silicon Valley for (SeattlePay+$12,000)/0.9 because of the higher rent and state income tax
$93k supporting a family (stay at home partner, two kids) is most definitely not comfortable, whether in the Midwest or the coasts. Insurance premiums alone would be ~$15k/year (pretax, but still). Throw in a mortgage or rent @ $1500/month, that's another $18k/year, you've already consumed a third of your wages.
Different people have different definitions of "comfortable", but it is entirely possible to live comfortably in the Midwest on a household income of ~$100k.
I don't really agree with this premise for a few reasons. $1500 a month is insane for the midwest (Unless you're talking about a huge house on a few acres, or a luxury condo in a large midwestern city). You could spend $1000 a month on a mortgage and live comfortably in a nice 3-4 bedroom house in a good neighborhood in most parts of Iowa, for example.
Lastly, if you have a family of 4, there is a Federal Child Tax Credit of $2000 per child, your standard deduction goes up significantly if you're married and head of household and the lower tax brackets cover a larger portion of your income. So the overall tax burden is much, much less than a single guy making 100k a year.
I did a quick calculation and figured someone making 93k a year in Iowa would be taking home $1,332 a week with 4 allowances. That's 5300/mo - 1200 for insurance (Which seems nuts unless your employer doesn't have good plans), and $1000 for housing, and 1000 for food and 500 for transportation/misc bills, that leaves $1600 a month extra. I wouldn't say that's rich but it is comfortable and even enough to save a for retirement.
Lastly, if you have a family of 4, there is a Federal Child Tax Credit of $2000 per child, your standard deduction goes up significantly if you're married and head of household and the lower tax brackets cover a larger portion of your income. So the overall tax burden is much, much less than a single guy making 100k a year.
I did a quick calculation and figured someone making 93k a year in Iowa would be taking home $1,332 a week with 4 allowances. That's 5300/mo - 1200 for insurance (Which seems nuts unless your employer doesn't have good plans), and $1000 for housing, and 1000 for food and 500 for transportation/misc bills, that leaves $1600 a month extra. I wouldn't say that's rich but it is comfortable and even enough to save a for retirement.
I'll work that out for my office, which is right by the beach in Florida. First of all, that pay would likely be for a somewhat junior position. Also, bonuses are common, but I guess I won't count that because it isn't promised.
Insurance is provided. BTW, we also add on a bit more for a 401K, in addition to whatever you might choose to contribute.
I don't know what you'd want for a home, and I don't know your credit score, but throwing some numbers into a mortgage calculator for 30-year mortgages gives me: You could pay $1250/month on a home that is 7 minutes from work, on 1.16 acres, going for $275,000. If you don't mind an older house, one on 1.3 acres (like a football field) is 11 minutes away and is selling for $320,000. That looks like $1455/month, which is almost what you propose. This might be excessive for you though; a smaller piece of land can be had for half that price unless it has a new McMansion or a waterfront.
So I think it's more realistic that housing would consume 1/6 of your wages.
Note also the lack of a state income tax. Fuel is half the price you'd pay in California.
Insurance is provided. BTW, we also add on a bit more for a 401K, in addition to whatever you might choose to contribute.
I don't know what you'd want for a home, and I don't know your credit score, but throwing some numbers into a mortgage calculator for 30-year mortgages gives me: You could pay $1250/month on a home that is 7 minutes from work, on 1.16 acres, going for $275,000. If you don't mind an older house, one on 1.3 acres (like a football field) is 11 minutes away and is selling for $320,000. That looks like $1455/month, which is almost what you propose. This might be excessive for you though; a smaller piece of land can be had for half that price unless it has a new McMansion or a waterfront.
So I think it's more realistic that housing would consume 1/6 of your wages.
Note also the lack of a state income tax. Fuel is half the price you'd pay in California.
Im at a $100k, my wife stays at home with our two school age kids, we live quite comfortably.
I assume you live somewhere rural, with low cost of living, and not a suburb of a major metro. Is my assumption accurate? You might even be remote, in which case you've traded higher wages for lower employment mobility (which is a reasonable compromise to make, but not common).
I am in the process of moving to live 30 minutes from New Orleans and yes I work remote.
> my wife stays at home with our two school age kids
Ah, so she's providing service equivalent to $100k
Ah, so she's providing service equivalent to $100k
We haven't calculated the cost, but we know its up there. Particularly since we make 90% of our meals from scratch. She does all the baking, we share in the cooking and split clean-up.
At 94K, stay at home spouse w/ kids. I live in upper midwest, avg cost of apartment renting $1200 2bd rm. Own a home, $1800/month. You are correct, @ 94K I am struggling to save.
15k/year after the employer contribution?
Yes, although I have colleagues at other companies who pay much less (~$6k-8k year employee cost). Hard to make apples to apples comparison because employer health plans aren't public, but I have seen amazing plans and I've seen absolute garbage plans where you need to go to the open marketplace instead (and in doing so, your premiums are now non-tax deductible and you're paying the entire cost with no employer subsidy). I conservatively round up, because medical costs usually end up higher than expected.
I have 11 kids and I'm not paying $15k/year. It would be sort of negative if nothing happened, since money would accumulate in one of those FSA/HSA things. There is no paycheck deduction.
Even the maximum possible out-of-pocket expense is well below $15K/year. Getting to that point would require major surgery.
Even the maximum possible out-of-pocket expense is well below $15K/year. Getting to that point would require major surgery.
It depends on the state, but I would note that a huge number of states have either free, or highly subsidized healthcare for children under 18.
Only if your family income is so low that you qualify for Medicaid.
> Almost every state has multiple Medicaid programs. But, as a good rule of thumb, if you make less than 100% to 200% of the federal poverty level (FPL) and are pregnant, elderly, disabled, a parent/caretaker or a child, there’s likely a program for you. And if you make less than 133% of the FPL, there’s possibly a program for you, depending on whether your state expanded under Obamacare.
https://www.policygenius.com/blog/a-state-by-state-guide-to-...
> Almost every state has multiple Medicaid programs. But, as a good rule of thumb, if you make less than 100% to 200% of the federal poverty level (FPL) and are pregnant, elderly, disabled, a parent/caretaker or a child, there’s likely a program for you. And if you make less than 133% of the FPL, there’s possibly a program for you, depending on whether your state expanded under Obamacare.
https://www.policygenius.com/blog/a-state-by-state-guide-to-...
$93k does not give a very comfortable lifestyle in SF/NYC.
These are averages. SF/BOS/SEA/NYC/etc all have higher salaries. It also is a bit vague as to what a "tech worker" is, and these articles tend to include all of IT in that.
Presumably that amount is for living in normal places. Even in Austin TX, which has become relatively expensive, I lived quite comfortably on an entry-level salary of $65k in 2015.
Comfortable is subjective. For dual high income household, such as doctors/lawyers/engineers, if you want to raise kids in a neighborhood of similarly successful people, you’ll need to be pulling in a household $200k+ per year, even in medium CoL areas.
It’s always relative, and for those that go to target schools and have lucrative careers, and their network is full of others in a similar boat, then they will be competing with that level of income.
It’s always relative, and for those that go to target schools and have lucrative careers, and their network is full of others in a similar boat, then they will be competing with that level of income.
That's not comfortable, that's socially-competitive. Comfortable means you never have to worry about basic needs, and you don't really have to worry about creature comforts like entertainment and hobbies. As a coworker once put it, "I just want to make enough money that I never have to think twice about getting guacamole on my Chipotle."
I wouldn't say it's _uncomfortable_, but it's liable to leave you struggling from time to time even here in north Texas.
You certainly can is you bought your house 10+ years ago.
So i guess 93k + a time machine would be great for most new grads.
I'm not stating it a solution to any problem. I'm just stating a fact that there are plenty of people who lived here a long time and bought their house cheap by current standards. I've lived in the bay area for a long time and my own unique circumstances made it difficult to build up savings to buy a house for a long time. People think everything was easier in the past but salaries were less also.
SV/SF CoL is still horribly high, NYC/DC and SEA probably little better.
Most of the salary surveys on sites like dice show numbers that are lower than what people who know what they are doing actually end up getting. Sites like Blind etc. tell a better story.
Anyone go from engineering to sales? Everyone talks about high programmer salaries but from what I have seen enterprise sales is where the real money is.