The myth of America's missing software engineers

The myth of America's missing software engineers
management.fortune.cnn.com

>To be sure, using data to argue about contentious policy issues should always prompt skepticism.

Death of journalism right there. Data be damned!

On a more serious note:

>"There is, indeed, a shortage of tech workers in the Bay Area."

That's because it's so darn expensive to live in the Bay Area, and almost impossible at the wages that tech companies generally want to pay for talent. They're knotting their own noose and standing on the chair, screaming that they'll kick it out from under them, really, for serial this time guys!, if they can't have cheap, underpaid talent to exploit.

Whereas the reason there are open positions for programmers at high tech companies is that these companies want star programmers

Maybe they should try paying like stars. What percentage of engineers that aren't founders or within the first five employees make over $300,000 a year? The money is in Silicon Valley, Google's 2011 net income was $299,874/employee [1], but the vast majority of engineers aren't going to be the ones to get it. How about paying a market wage, instead of offering a "free lunch" to people that cannot negotiate. I am not interested in playing video games at work, I have a house for that. Last I looked at it, the difference in pay between finance and stem jobs is enough to hire a personal chef to deliver lunch to you at work every day, and cook for you at home, and buy all the games you want, with a bunch of money left over. Apple and Google are both posting ~25% net profits because engineers are willing to work for peanuts, and a free lunch. On top of that, cost of living in the bay area is outrageous, we're talking $35,000/year for housing, unless you want to live like a college student.

An average (median) engineer should be making $200,000 a year, and the "rockstar" (>80th percentile) engineers that everybody is trying to hire for $85,000 and 0.5% of equity, should be making $350,000+. These are hard jobs that few people can do at all, and fewer can do well. Great engineers can create millions of dollars of value a year.

It seems that the industry has shifted focus, now that the collusion agreements have been squashed, toward importing cheap labor. This problem has been solved in other industries through partnerships and professional societies (e.g. in the legal industry, with large partnership firms and bar associations). In the interim, it seems like the best way to capture value is to build companies to flip in talent acquisitions, while planning to leave to do it again as soon as you're vested.

[1] Goldman Sachs 2011 net income was $162,913 per employee. Average pay was $367,057. It's harder to get data on Google, but it looks like the mid-career median salary is $141,000.

Google's Gross Profit (Total Revenue less Cost of Revenue) was $24.7B in 2011, and GS's was $24.5B. At the same time, Google had 32,467 employees to GS's 35,700. Yet, the Google net income was $9.7B compared to $4.4B on the GS side. The difference seems to be made up entirely by the difference in employee compensation.