Are We in the Middle of a Programming Bubble? - <AUTHOR> https://thinkfaster.co/2019/01/are-we-in-the-middle-of-a-giant-programming-bubble/ <comment><USER2> 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.

<comment><USER3> If anything good programmers are underpaid. If you are making your company a mil, you should be getting 1/2.

<comment><USER4> 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.

<comment><USER3> 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.

<comment><USER5> > 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.

<comment><USER6> > 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.

</comment></comment></comment></comment></comment></comment><comment><USER7> 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.

<comment><USER8> 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?

<comment><USER9> 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.

<comment><USER10> 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.

<comment><USER9> 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.

<comment><USER11> 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.

</comment></comment></comment></comment></comment></comment><comment><USER12> 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.

<comment><USER13> > 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.

<comment><USER14> >= $100K outside of a major city for a green undergrad doesn't seem typical. Do you hang with grads from big name schools?

<comment><USER15> 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.

</comment></comment></comment></comment><comment><USER16> 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)

</comment><comment><USER17> 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)

<comment><USER18> 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.

<comment><USER19> Your argument is based on AGI, something we have no idea if will ever happen, and most likely nearly as close as you think.

<comment><USER20> Oh, If we're getting to AGI then it's either apocalypse-time or post-scarcity- time, ain't it?

</comment></comment></comment></comment><comment><USER21> 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.

<comment><USER22> I think the article's author is just suffering from imposter syndrome.

</comment></comment><comment><USER23> 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.

<comment><USER24> 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.

<comment><USER25> I think barrier to entry for lawyers is way higher than for programming.

<comment><USER26> Can you imagine hiring a self-taught lawyer?

<comment><USER24> 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.

<comment><USER27> 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.

<comment><USER28> California, Virginia, Vermont, and Washington all seem to allow it. There are caveats, of course.

</comment></comment></comment></comment></comment></comment></comment><comment><USER29> 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.

<comment><USER30> 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.

<comment><USER31> 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.

<comment><USER32> 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.

</comment></comment></comment></comment><comment><USER33> 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.

<comment><USER34> #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.

</comment></comment><comment><USER35> 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.

</comment><comment><USER36> >> _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.

<comment><USER37> 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.

</comment></comment><comment><USER38> 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)

</comment><comment><USER39> 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.

<comment><USER40> Ben Horwitz said that. The talk is here: [https://www.youtube.com/watch?v=RF5VIwDYIJk](https://www.youtube.com/watch?v=RF5VIwDYIJk)

</comment></comment><comment><USER41> _> 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.

</comment><comment><USER42> 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.

<comment><USER43> I came to the conclusion too. I was working as a reverse engineer and realized my job was basically just reading. Modern scribe.

</comment></comment><comment><USER44> 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.

</comment><comment><USER45> 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?

<comment><USER46> You have a social safety net and actual workers' rights that make up for at least some of the difference.

<comment><USER30> 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.

<comment><USER46> 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).

<comment><USER30> The people pulling bubbly SV comp numbers (i.e. the topic of the thread) are not part of that majority though.

<comment><USER46> 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.

</comment></comment></comment></comment></comment></comment><comment><USER47> 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.

<comment><USER48> 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)

</comment></comment><comment><USER49> 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.

</comment><comment><USER50> 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.

<comment><USER51> 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.

</comment></comment><comment><USER52> 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.

</comment><comment><USER53> 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.

</comment><comment><USER54> 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?

<comment><USER55> 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.

<comment><USER54> 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.

</comment></comment></comment><comment><USER56> 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.

</comment><comment><USER57> 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).

<comment><USER46> 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).

</comment></comment><comment><USER58> 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.

</comment><comment><USER59> 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.

</comment><comment><USER60> 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.

</comment><comment><USER61> Working at a FAANG Corp is the bubble.

<comment><USER62> So you're saying it's not sustainable?

<comment><USER61> 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.

</comment></comment></comment><comment><USER43> 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.

<comment><USER63> In an irrational market, rational decisions seem irrational? Interesting hypothesis.

</comment></comment><comment><USER64> Cached version since the original is down: [http://archive.is/pm3QU](http://archive.is/pm3QU)

<comment><USER65> ^ mirror

</comment></comment><comment><USER66> 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.

</comment><comment><USER67> > 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.

</comment><comment><USER68> 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)

</comment><comment><USER69> 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.

</comment><comment><USER70> 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.

</comment><comment><USER71> 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.

<comment><USER72> 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.

</comment></comment><comment><USER73> 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.

</comment><comment><USER74> 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.

</comment><comment><USER75> 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.

</comment><comment><USER76> 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.

</comment><comment><USER77> 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.

</comment><comment><USER78> 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!

</comment><comment><USER79> "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.

</comment><comment><USER80> 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.

</comment><comment><USER81> 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.

<comment><USER82> > 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.

</comment></comment><comment><USER83> 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.

</comment><comment><USER84> 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.

</comment><comment><USER85> 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).

</comment><comment><USER86> 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)

</comment><comment><USER87> 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.

</comment><comment><USER88> I think we'd have to ask a similar question if CEOs are currently in a CEO pay bubble.

</comment><comment><USER89> 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.

</comment><comment><USER90> 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.

</comment><comment><USER91> 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.

</comment><comment><USER92> 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.

<comment><USER93> 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.

</comment></comment><comment><USER94> 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?

<comment><USER95> 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.

<comment><USER96> Refreshes are not only on promotion.

</comment></comment></comment><comment><USER97> 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.

</comment><comment><USER98> "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.

<comment><AUTHOR> Early employees who cash out are a bit different than the rank and file.

<comment><USER98> 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.

</comment></comment></comment><comment><USER99> 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.

</comment><comment><USER100> _"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.

</comment><comment><USER101> 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.

</comment><comment><USER102> 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.

<comment><USER103> 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) .

</comment></comment><comment><USER104> 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?

</comment><comment><USER105> 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.

<comment><USER44> 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?

</comment></comment><comment><USER106> 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.

</comment><comment><USER107> 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?

</comment><comment><USER108> 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.

<comment><USER63> I did that once. It was great. Got me to my dream job (spoilers: I do not write code for a living).

<comment><USER108> curious, what do you now?

<comment><USER63> 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.

</comment></comment></comment></comment><comment><USER109> 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.

</comment><comment><USER110> 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?

</comment><comment> 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

</comment><comment><USER111> 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.

</comment><comment><USER112> 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.

</comment><comment><USER113> 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.

</comment><comment><USER114> 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 :)

</comment><comment><USER115> 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.

</comment><comment><USER116> 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.

</comment><comment><USER117> 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.

</comment><comment><USER118> 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.

</comment><comment><USER119> 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.

</comment><comment><USER120> 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.

</comment><comment><USER121> Anyone have an alternative link/mirror to the article? Seems the source site is having issues serving pages...

</comment><comment><USER122> "Maybe with how important software is becoming in the economy this is the new normal"

It is definitely the new normal.

</comment><comment><USER123> He is postulating a programmer comp bubble, not a programming bubble.

</comment><comment><USER124> Yes we are. omg stop the horror</comment>


Saving fuel with software - <AUTHOR> http://arstechnica.com/science/2015/07/saving-fuel-with-software/

<comment><USER2> It is very interesting to see almost every company becoming a software company. Businesses that earlier thought of software as a tool at most, now see the endless possibilities for efficiency and decision support.

An example is UPS, who plans it's routes with a heavily modified traveling salesman optimizer. [http://www.wsj.com/articles/at-ups-the-algorithm-is-the- driv...](http://www.wsj.com/articles/at-ups-the-algorithm-is-the- driver-1424136536)

Personally, I work on a system that tracks food items and makes sure it stays fresh on the store shelves.

<comment><USER3> wow, thats interesting, any paper/links?</comment></comment>


Obama picks Net neutrality backer as FCC chief - <AUTHOR> http://news.cnet.com/8301-13578_3-10187067-38.html <comment><USER2> This is awesome. Of particular interest to YC:

"He's currently a co-founder of LaunchBox Digital and Rock Creek Ventures,"...

Any news on the CTO front? I saw this: <http://www.obamacto.org/></comment>


Have you ever kissed a girl? (1996) - <AUTHOR> http://cryptnet.net/mirrors/texts/kissedagirl.html

<comment><USER2> An abstract or the context might be useful, otherwise it's just some guy going ad hominem on some old mailing list.

</comment><comment><USER3> Funny. Based on the way I write online, I'm often mistaken for a female.</comment>


In-depth look at ECMA TC-39 Committee - <AUTHOR> http://www.aminutewithbrendan.com/pages/20101129

<comment><USER2> tldr: Brendan Eich is seriously considering major syntax changes for ECMAScript Harmony -- something akin to a DecafScript (he says), sitting in between CoffeeScript and JavaScript as we now know it.

The blog post he discusses in the podcast is: <http://brendaneich.com/2010/11/paren-free/></comment>


Comparing  LibreOffice  and  Apache OpenOffice [pdf] - <AUTHOR> http://www.nouenoff.nl/downloads/LibreOffice_AOO_CompetitiveFeatureMatrix_20150318.pdf

<comment><USER2> For all their furious development, either of them still make me want to chew my face off when doing anything that requires the slightest interop with MS Office.

<comment><USER3> I think you mean: MS Office makes you want to chew your face off when doing anything that requires the slightest interop with any other software (occasionally including MS Office for Mac). Which is likely to continue until that strategy becomes unprofitable for them.

The most recent story on this topic in the UK was Microsoft threatening to close down research labs in the UK if the government promoted open standards for office documents. That's how much they care about preventing interoperability.</comment></comment>


The reason so many unprofitable companies are going public - <AUTHOR> https://theweek.com/articles/835726/reason-many-unprofitable-companies-are-going-public <comment><USER2> I don't think he needed to go there - to "network effects" \- when "because VC and founders want to cash out while they can" was cause enough even back in April.

At this point with the economy's decline obvious and hastening I think it's a safe bet there'll be a dearth of unprofitable IPOs at least through 2021.

</comment><comment><USER3> The author also fails to notice that 2019 is a blockbuster year for the tech IPOs because the market is way up. The tech companies aren't dumb - they are trying to get a great position to create liquidity for their owners</comment>