What Silicon Valley gets about engineers that traditional companies do not

I have worked in this field since 1980. The first time I was given the title "Software Engineer" was at Apple in 2001. Was I really a trained, licensed engineer in the traditional sense? Of course not. But it sure made me feel flattered and empowered. Silicon Valley HR execs use strategies like this to manipulate their employees, particularly the youngest ones.

Why do people keep pretending like Silicon Valley engineers aren’t one of the single highest paid demographics in the entire country?

Initially this was true, certainly SV would use higher salaries to draw developers and engineers to the valley. But cost of living has exploded since then. A modern developer living in SV does not command a higher standard of living as food and housing costs are significantly higher than most of the rest of the country. A similar trend plays out on the east coast so it’s not just SV.

It’s balanced by the CoL adjustment. In short, SV engineers are not better off, and haven’t been for the past decade. This is apparent by the observed exodus in the light of Covid forcing a shift to primarily remote work. Engineers are trying to reclaim their wage advantage by moving to cheaper locations, and companies are fighting back by reducing compensation accordingly.

Pay is nowhere remotely close to being proportional to impact on revenue though. Many engineers are much more offended by unmeritocratic pay than by absolute value of pay being low - hence why you can convince amazing engineers to work for peanuts at start-ups.

I want the greatest share of the returns of my own labor I can get. If that results in very high salary, great, it’s earned. If I take a risk at a place where that translates to much lower salary, that’s fine too - as long as it’s very objectively meritocratic.

If I am making $200k per year as a top, top performer, while my employer is paying far more mediocre performers $175k (perhaps based of geolocation), or where both of us are bringing in ~ millions of revenue, that’s super unacceptable.

As time goes on, the surplus of my labor productivity that a big corporate employer can capture beyond my total compensation should be decreasing heavily - and expert software labor is one class that has the negotiation power to actually push that issue.

So I’d flip your question on its head. Why do we pretend that rent-seeking executives deserve the surplus revenue generated by rare talented engineers? Why (with complete sincerity) aren’t many, many, many more software engineers paid on the order of what Hollywood actors are making, while executive salaries simply have to come way, way down in these lines of business?