Are Silicon Valley’s Engineers Underpaid?

BY: FARHAD MANJOOFebruary 16, 2011
Call off the lottery, argues FARHAD MANJOO, and raise the salary bar for all programming talent.

Google’s Eric Schmidt must have watched a few late-night infomercials before dashing off a memo to his employees last fall. The memo, which might as well have been advertising a new gizmo called StayPlease, gave workers at all levels of the company a 10% raise. But wait, there’s more!Google would be permanently transforming a portion of the employees’ annual bonuses into their base salary. Identify yourself as a Googler when you call the toll-free number (888-PLZ-STAY), and Schmidt would also give everyone an extra $1,000 bonus — tax free! He closed his pitch by thanking people for making Google “a place where magic happens,” but it wouldn’t have been a surprise if he’d thrown in his latest amazing discovery, the FacebookEraser (a $50 billion value).

Schmidt’s seeming desperation stems from a number of high-profile defections to Facebook: Matthew Papakipos, head of its Chrome OS team, and Lars Rasmussen, a cocreator of Google Wave, to name two. Although Silicon Valley’s official unemployment rate hovers around 11%, which is higher than the national average, those grim numbers don’t apply to top engineering talent. Four companies in particular — Facebook, Google, Twitter, and Zynga — have been waging a fierce battle for their services. Tech blogs abound with tales of six-figure — and even seven-figure — offers and counteroffers for the best software minds.

But these tales of high-rolling nerds mask a greater truth, one that actually threatens to hurt the tech industry over the long term: Software engineers in the Bay Area are underpaid when you consider the billions in wealth their work creates. In interviews with several engineers — and after scanning the boards on Glassdoor.com, which lets people post anonymous salary info for all to see — I found that a programmer with a few years of experience can expect to make somewhere between $100,000 and $150,000 a year at one of the Valley’s powerhouse companies. In most parts of the country, that is a great salary. But in Silicon Valley, 13% of households make more than $200,000 a year, and single-family homes frequently sell for more than $1 million. An engineer in San Francisco told me that he could never dream of buying a house in the city on his pay; another said that it would be impossible to pay off his student loans anytime soon. Compare their salaries to those of the lawyers, doctors, bankers, consultants, VCs, and other professionals who populate the neighborhood.

If the big tech companies were smart, they would begin to reverse this era of underpaying their most valuable employees. For one thing, it’s draining the talent pool because the comparatively middling salaries push smart people toward other careers. “The cream of my computer-science students don’t become engineers; they go to Wall Street or become management consultants,” says Vivek Wadhwa, a professor at the Pratt School of Engineering at Duke University. A decade out of college, a consultant could be earning nearly a million dollars a year, while an investment banker could make many millions, he says.

The current salary level for programmers also promotes a gambler’s view of work, which hurts established companies’ long-term stability. People often leave steady jobs at companies with lots of resources in order to join startups that hold the promise of an acquisition jackpot. Several young engineers said that this was, in fact, their life plan. “I’m a little young for a retirement plan,” one 22-year-old engineer told me, “but to be honest, I have to say that I count on that happening in my lifetime.” Living in Silicon Valley without making a bundle in an IPO or acquisition just doesn’t seem possible.

Of course, this situation benefits pre-IPO companies like Facebook and Twitter. Still, that’s only in the short run. Before long, they too will see workers fleeing for the next great pre-IPO darling. Less-noble startups aren’t above taking advantage of programmers’ stock-option dreams, either. “They use the excuse of ‘We don’t have much money, and you’ll be getting stock’ to be really stingy with pay,” one engineer told me. Need-less to say, the vast majority of these startups fail, leaving their workers in the lurch.

The Valley’s tech giants aren’t hurting for money. Google alone has more than $33 billion in cash. That suggests an obvious way to stem the tide toward Facebook, Twitter, and tomorrow’s buzzed-about startup. Eric Schmidt should open up his checkbook even further. Operators are standing by.

http://www.fastcompany.com/magazine/153/engineers-to-the-valley-pay-up.html

What about the engineers right here in Austin, Texas? Are they underpaid as well? Would love to hear what the masses think on this.

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Learn Something New Every Day

Indeed I have.

This is what I’ve learned today. You can all be jealous later:

Counterfactual Theories of Causation

First published Wed Jan 10, 2001; substantive revision Sun Mar 30, 2008

The basic idea of counterfactual theories of causation is that the meaning of causal claims can be explained in terms of counterfactual conditionals of the form “If A had not occurred, C would not have occurred”. While counterfactual analyses have been given of type-causal concepts, most counterfactual analyses have focused on singular causal or token-causal claims of the form “event c caused event e”. Analyses of token-causation have become popular in the last thirty years, especially since the development in the 1970’s of possible world semantics for counterfactuals. The best known counterfactual analysis of causation is David Lewis’s (1973b) theory. However, intense discussion over thirty years has cast doubt on the adequacy of any simple analysis of singular causation in terms of counterfactuals. Recent years have seen a proliferation of different refinements of the basic idea to achieve a closer match with commonsense judgements about causation.

http://plato.stanford.edu/entries/causation-counterfactual/

And what have you learned today?

Email Address: Professional v. Personal

I came across this article today and really liked what it had to say about email addresses. As cool as it is to have the really funny personalized email’s [please insert heavy amount of sarcasm here] like princessglittersparkle@bedazzled.com at some point it is time to grow up and realize that your future employer does not need to know that you partyhard@beerpong.com or that you have an obsession with all things bedazzled and sparkly. Keep your personalized emails around to terrorize your friends with and go get a professional email address for job applications.

What Does Your Email Address Say About You To Employers?

One thing that I had noticed when I was looking to hire people in the past was that some candidates would use email addresses like RockAndRoll@domainname.com or PartyAnimal@domainname.com.  Although these may be great email addresses for personal use, they may not be the right one for you to use in a professional environment.  Think about the post I did on Managing Your Online Brand, we talk about how you appear to potential Employers and companies.  When you think about managing your online brand, think about how your email address can appear to a potential Employer and if it is how you really want to present yourself.

Although loving Rock and Roll or going to parties isn’t a bad thing, it might not be something that an Employer needs to know about.  It could also come across as a negative or that you don’t know how to present yourself professionally.  It does share some of your interests socially which isn’t always a bad thing, but what if those aren’t things that the Employer sees as valuable or being good within the company’s social atmosphere.  Using an email address like YourName@domainname.com is much more professional and also keeps your name in front of their face.  Even if you use your personal email address for friends, I always recommend setting up a professional email address for business.

There are tons of free email services out there like HotmailGmail and Yahoo.   Even if your name isn’t available you can try variations like:

  • FirstInitialLastName@domain.com
  • FirstNameLastInitial@domain.com
  • FirstName.LastName@domain.com
  • FirstNameLastName123@domain.com
  • FirstName-LastName@domain.com

Each of these email addresses helps to clearly show your name and keep it in front of the Hiring Manager.  They are also free and more importantly, professional looking.  You can also set up professional profiles on Social Media sites where Employers will be looking you up related to this email address.  That way they only see positive things about you and professional pictures when they try to do some research on you.  One other option is to buy a domain name and set up your own email at your own site.  This is not only great because you’ll have a great email address like yourname@yourname.com, but they may go to your site and you can brag about all of your achievements.

Presenting yourself professionally is a huge part of landing an interview and your email is one of the things that Hiring Managers look at.  It is one of the ways they contact you and one of the things that you may include at the top of your resume.  I highly recommend you use a professional looking email address so that the company knows you are serious and that you know how to separate your professional life from your social life.

http://blog.jobfox.com/blog/what-does-your-email-address-say-about-you-to-employers/

And on another note entirely – I thought I’d add in what The Oatmeal (www.theoatmeal.com) has to say about email addresses and your computer skills. As a tech recruiter I do actually pay attention to these things and I have noticed a distinct difference in candidates based on what email service they use.