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Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

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Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#41

Post by danachow »

silisili wrote: post #18
dalyons wrote: post #8

Earlier quoted context omitted.

What 1980s fantasy is this 3x rule? Median household incomes to home price ratios have risen to ~8x across the US as a whole , not just crazy house price areas like SF/NYC. Canada and Australia are far worse again, pushing 15x in some cities. 3x, if it ever was a rule, has been dead for a long long time.

There's no way in hell it's close to 8x. Just crunched the numbers, and an 8x mortgage would exceed my monthly take home. I felt pretty uncomfortable at 2.5x. I feel a lot of people are probably extending out to 4 or even 5, but 8 would be irresponsible and I doubt you could even find a lender for that.

Maybe you miscrunched?

A 5x mortgage over gross pay should be just over 30% of monthly gross take home. Maybe too much for some, but not absolutely irresponsible - especially if you choose to stay in a stable housing market.

2.5x is completely ridiculous to expect - that’s going to be far below rental payments in most places that anybody would want to live. Its definitely not the norm. It’s obtainable in some areas of the northeast like Pittsburgh and the Midwest. But usually the catch is property taxes are outrageous.

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#42

Post by indecisive_user »

missedthecue wrote: post #26
indecisive_user wrote: post #5

>the average tech worker’s salary [will] reach $104,566 in the U.S. — a 6.9% increase since 2020, the report found. But inflation is over 11% since 2020. This isn't an increase. The average tech worker is making less than they were 2 years ago according to the Dice salary report. Why do tech workers feel underpaid? Many companies posted record growth and profits over the pandemic, but still give out paltry 3-5% raise…

Annual raises doesn't have anything to do with being over or underpaid, strictly speaking. To clearly illustrate my point here, if fortune 500 CEO pay is up less than 11% on avg since 2020, I don't think that's an argument they're underpaid.

I don't think that's a good analogy. The value of a CEO should be relatively well known before hiring into a company. CEOs are rare, and at the endgame of their career, so you're already pricing in the present and future value you think they will add to your company. CEOs generally can't job hop every couple years for a large double digit raise.

Most good engineers(especially early in their career) will be an order of magnitude more productive after a couple years at the same company, as they build up both domain knowledge in their tech space, and institutional knowledge that can't be learned outside of the company. And companies know the value of this experience. That's why you can switch jobs after 2 years for a 20-40% increase. When the market rate for your labor is 1.2x your current salary, I think that's called underpaid.

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#43

Post by fxtentacle »

I wonder how much of the effect is average vs. median. If you have a team of 10 people and you give a big raise to one of them, then the average will go up. But 9 out of 10 people will feel underpaid, because you did not give them a raise like their 1 teammate.

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#44

Post by mijowi »

silisili wrote: post #18
dalyons wrote: post #8

Earlier quoted context omitted.

What 1980s fantasy is this 3x rule? Median household incomes to home price ratios have risen to ~8x across the US as a whole , not just crazy house price areas like SF/NYC. Canada and Australia are far worse again, pushing 15x in some cities. 3x, if it ever was a rule, has been dead for a long long time.

There's no way in hell it's close to 8x. Just crunched the numbers, and an 8x mortgage would exceed my monthly take home. I felt pretty uncomfortable at 2.5x. I feel a lot of people are probably extending out to 4 or even 5, but 8 would be irresponsible and I doubt you could even find a lender for that.

Prior to a recent promotion I was at ~6.7x. I still had some frivolous spending on going out and such, but I’m a bachelor. This was also before the recent inflation rise. Now I’m at 5x. Do I feel comfortable? Mostly… I work for the government so I’m not worried about losing my job, but rising inflation has eroded away the safety buffer I hoped to have with the increased salary. I’m concerned about how an expensive emergency situation could affect me.

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#45

Post by EnKopVand »

xcambar wrote: post #12
bigcat12345678 wrote: post #3

Earlier quoted context omitted.

Where does 3X salary rule come from?

It's a rule of thumb that your total debt should not exceed 1/3 of your income. It has no economic foundations whatsoever. Yet, banking institutions use(d?) this rule to reject whatever application they were not comfortable with.

> It's a rule of thumb that your total debt should not exceed 1/3 of your income.

Unless tax deductions work very different in the US than they do in Denmark, that is pretty bad advice.

Here, sitting on a 60% mortgage loan that is many times higher than your annual income is genuinely a good idea for most people because of tax law. It’s not until you have assets that are worth more than your house that it becomes a good idea to pay off the entire loan.

Meanwhile having even a small “quickloan” that is 0.1% of your annual income is a very stupid idea.

I mean, if you don’t know finance at all then maybe it’s a good rule of thumb as you’ll never bury yourself in debt, but loans aren’t just loans.

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#46

Post by alexchamberlain »

brabel wrote: post #33
silisili wrote: post #13

Earlier quoted context omitted.

I don't feel underpaid, but I definitely feel like I've lost tons of ground in the last 2 years. The floor has risen big time. Entry level jobs are paying up to 60k these days, whereas they were closer to 30k a few years back. Good for them, seriously. But watching the floor rise closer to you is never a great feeling.

That's a strange concern you seem to have... why does it bother you that fellow programmers are getting salaries close to yours? Do you think it would feel better if your salary could be 5x higher than theirs? Why? That will not actually affect you negatively in any way! Unless you're being actually underpaid compared to your peers with the same experience and skills, there's only good things about people with lower…

If you're a senior delivering 10x the value of a grad, does it not feel fair to offer more than 2x the salary?

I'm torn tbh - there are various ways that a salary can be set, including the value people are delivering, market forces and in reference to others in the career ladder. There's a balancing act to be had, but I can see where the GP is coming from.

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#47

Post by Thorrez »

xcambar wrote: post #12
bigcat12345678 wrote: post #3

Earlier quoted context omitted.

Where does 3X salary rule come from?

It's a rule of thumb that your total debt should not exceed 1/3 of your income. It has no economic foundations whatsoever. Yet, banking institutions use(d?) this rule to reject whatever application they were not comfortable with.

I think you mean 3x of your income, not 1/3 of your income. If it was 1/3, then someone making 100k would only be able to get a mortgage loan of 33k...

Or are you saying payments on debt (mortgage payments)?

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#48

Post by missedthecue »

indecisive_user wrote: post #42
missedthecue wrote: post #26

Earlier quoted context omitted.

Annual raises doesn't have anything to do with being over or underpaid, strictly speaking. To clearly illustrate my point here, if fortune 500 CEO pay is up less than 11% on avg since 2020, I don't think that's an argument they're underpaid.

I don't think that's a good analogy. The value of a CEO should be relatively well known before hiring into a company. CEOs are rare, and at the endgame of their career, so you're already pricing in the present and future value you think they will add to your company. CEOs generally can't job hop every couple years for a large double digit raise. Most good engineers(especially early in their career) will be an order o…

My point here has nothing to do with CEO pay. Or engineer pay.

My point is that dev pay being off a few percent since 2020 because of high inflation does not by itself decide the question of whether they're overpaid or not.

Patrick Mahomes doesn't get a pay raise adjustment every year for inflation. That doesn't mean his $500m football contract makes him underpaid.

The grandparent comment reads as if devs are underpaid because their pay isn't fully keeping up with some unusual inflation since 2020.

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#49

Post by slyall »

silisili wrote: post #18
dalyons wrote: post #8

Earlier quoted context omitted.

What 1980s fantasy is this 3x rule? Median household incomes to home price ratios have risen to ~8x across the US as a whole , not just crazy house price areas like SF/NYC. Canada and Australia are far worse again, pushing 15x in some cities. 3x, if it ever was a rule, has been dead for a long long time.

There's no way in hell it's close to 8x. Just crunched the numbers, and an 8x mortgage would exceed my monthly take home. I felt pretty uncomfortable at 2.5x. I feel a lot of people are probably extending out to 4 or even 5, but 8 would be irresponsible and I doubt you could even find a lender for that.

Ratio is usually calculated on household income. So it assumes closer to two incomes per household.

Where I live (Auckland, New Zealand) the average household income is just over $NZ 140k, while the average house price is around $NZ 1.4m.[1]

https://www.stuff.co.nz/life-style/homed/real-estate/1278031...

Re: Tech Salaries in 2022: Why the Six Figure Pay Makes Techies Feel Underpaid

#50

Post by DocTomoe »

tjansen wrote: post #10

It also makes us Europeans feel underpaid :) I have 20 years of experience and don't even make six figures. $350000 base pay sounds like a different world.

Be aware that if you include the taxes and mandatory insurances you have to pay (and your employer has to pay), you'd usually pass the six figures easily.

It's easy to be a millionaire if the state takes fuck all from the paycheck.

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