| Well, not GP, but I do. Let’s look at the numbers: Median senior SWE salaries in SF: https://www.levels.fyi/t/software-engineer/levels/senior/loc... Median income in metro areas: https://www.cnbc.com/2024/07/11/the-median-salary-for-the-25... Engineering salaries are significantly higher than nearly every other industry on average and on median. Much of this is driven by VC funding rather than sound, profitable, bootstrapped businesses with sustainable profit margins. Engineering salaries have also been driven upwards significantly the past ~10 years (since the post-2008 crash recovery), while wage growth in the US is mostly stagnant. I don’t have a source handy for that, but there are plentiful studies. Outside of the US this may be less true, but I took GP’s “most of us on HN” to mean people who work in US tech companies which are primarily concentrated in high COI areas. |
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| ▲ | marcyb5st a day ago | parent | next [-] | | Isn't salary a proxy of how hard to replace one person or a group of persons is or how valuable they are? There was a surge in demand for SWEs and scarcity brought salaries up. Are them too high? Hell no. On average, my colleagues and me generated ~2M$ each in 2025 for our company, while we get payed a fraction of that (grants and bonuses included). If you look at net income per employee we are at around 700k each in 2025. Additionally, employers try their hardest to drive costs down (eg. offshoring as much as possible, everyone doing layoffs at the same time, ...) and average/median salaries remained high. If the salaries were overinflated those numbers should have came down I believe. The fact that they didn't makes me think that it still is a scarcity problem not an overinflation one. | | |
| ▲ | gruez a day ago | parent [-] | | >There was a surge in demand for SWEs and scarcity brought salaries up. Are them too high? Hell no. On average, my colleagues and me generated ~2M$ each in 2025 for our company, while we get payed a fraction of that (grants and bonuses included). If you look at net income per employee we are at around 700k each in 2025. So by that logic, housing in coastal cities also aren't "overinflated"? After all, like SWEs, they're they're also scarce and in demand. They're also providing enormous value to the people buying/living in them, otherwise they'd be living in Oklahoma or whatever and paying a fraction of the cost. | | |
| ▲ | marcyb5st a day ago | parent | next [-] | | Maybe we give different meanings to the overinflation word. I see it as something that is speculative/shady in nature. Is housing overinflated? Probably in some places for sure because those who already have a house or invested in real estate wants to cut down supply to raise prices. Is the same on the job market? I don't think so. I never heard any SWE saying "let's scare people away from a CS career so we can bargain for higher salaries". The opposite is true though. Companies participate in career fairs, pre-uni events to make people gravitate towards a CS careers, ... so with a higher supply each employee loses a bit of bargaining power. Small excursus, this very fact was taken to the extreme in 2022 when everyone did layoffs at the same time despite the numbers being still great. If you put 300k people on the street at around the same time you can hire some of them for way less money as they now lost all leverage (since there are other 299.999 people waiting in line for a job). | |
| ▲ | B56b a day ago | parent | prev [-] | | Ya, that sounds right to me. Coastal city housing is very supply constrained, part of why it's so expensive, but it is hugely in demand and provides tons of value to many by letting them live near high paying companies. Unless by "overinflated" you mean a constrained supply/demand curve? |
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| ▲ | rileymichael a day ago | parent | prev | next [-] | | > Engineering salaries are significantly higher than nearly every other industry on average and on median now compare the profit per employee at tech (software engineering) companies and those industries.. | | |
| ▲ | fcarraldo a day ago | parent [-] | | At the top end (say, top 100 tech companies) it’s pretty high indeed. Public companies, for sure, as otherwise their stock price would tank. It’s not uncommon in this industry to have margins above 70-80%. But there are thousands if not tens of thousands where the profit per employee is minimal or negative. I can’t find a source for all tech (the data wouldn’t exist for private firms anyway) but I think it’s telling to look at this list, scroll down to about the middle and look around at salaries you or your colleagues are pulling. Software revenues are certainly high but the industry is afloat because of these high margin businesses creating returns so that low margin businesses can exist. Without the massive infusion in upfront capital, very uncommon in other industries, it’s simply not sustainable. Typically a market that’s buoyed by its top performers but has significant amounts of capital tied up in under performers is called “a bubble”. https://www.trueup.io/revenue-per-employee |
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| ▲ | infecto a day ago | parent | prev [-] | | Thank you for saying it better than I could have. It’s probably an unnecessary jab but I know how well I benefited financially in an industry where not much was expected in terms of output, lavish perks and huge base salary and stock compensation. Absolutely some companies are extremely profitable per headcount but I look at the sea of failures and how well engineers have generally done. It sets the tone for this massive negativity I see around AI when so many of us have benefited from VC money that failed. |
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