Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds
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@IRJ said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
I just read article again and realized they are specifically saying everyone but technology workers are getting a decrease. So that means IT jobs are getting increased while everything else is losing.
I hate to be thus guy... But it boils down to economics of a specific area. Obviously the demand in silicone Valley is for IT. In area that is so dense with geeks who work long hours, it's not surprising local businesses may have to pay less. The amount of online shopping for everything including things like liquor mentioned on the article must be extremely high.
I just hope the IT in Silicone Valley start paying up for the Sanitation employees or they will be in a deep pile of S%&*! (pun intended)
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@wirestyle22 said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
@travisdh1 said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
@IRJ said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
I just read article again and realized they are specifically saying everyone but technology workers are getting a decrease. So that means IT jobs are getting increased while everything else is losing.
I hate to be thus guy... But it boils down to economics of a specific area. Obviously the demand in silicone Valley is for IT. In area that is so dense with geeks who work long hours, it's not surprising local businesses may have to pay less. The amount of online shopping for everything including things like liquor mentioned on the article must be extremely high.
Interesting, I just read an article that said that IT people (and likely all people working in silicone valley) are paid something like 17% less than they were 20 years ago, even though profits in this same area (profits of the companies in this area) are up something like 70%. I guess the companies gave great starting wages, but then give nearly no raises... but that's only a guess.
That's how most companies I'm familiar with do. If you want to be paid what your worth, you generally have to move jobs often.
Or you can just stop growing and keep your wage where it is. Then you automatically are paid what you are worth. Life hacks
No, if you stop increasing you wage, you are getting paid less.
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@tonyshowoff said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
Nine out of every 10 Silicon Valley jobs pays less now than when Netflix first launched in 1997, despite one of the nation's strongest economic booms and a historically low unemployment rate that outpaces the national average.
Can we clarify something? Wages DO NOT EQUAL Total Compensation.
Wages may be stagnant, but that doesn't mean compensation isn't up! (FWIW mine are not, and the raises for the time I've worked for a Vally Company they exceed inflation).So If my base pay is said 100K, but they give me 50K in stock every year on a 4 year vestment schedule (1 year cliff, quarterly thereafter), then at the end of 4 years assuming the stock doesn't go up or down I"m looking at 300K in compensation tied to me staying there year over year.
Now let us say the stock goes up (Many Silicon Valley companies are hypergrowth companies). Lets say it doubles after the first year. Now that first grant is worth 100K instead of 50K (so 25K per year instead of 12.5K per year). So my first 365 days take home is now 125K at vest cliff. Lets also say the company is doing well and a variable bonus is paid out at 25% of the base so I'm at 150K on that 100K in base wages. Not bad? Now year two, let's say it doubles again. Now that first grant is going to deliver 50K per year, and the second grant will deliver 25K so I'm at 175K before bonus. This can continue to rise as long as the stock goes up (which can be stupid amounts for some companies) or as long as the RSU's keep getting refreshed every year (until whatever the RSU age limit is, so say 4 years). At this point, the base salary is a joke compared to the stock compensation. Now let's say I'm kicking ass and my companies becoming less popular, or the stock isn't doing anything fun and another cool company comes along and wants to hire me? They are not going to pay me 300K a year, but what they will do is offer me an even bigger pile of RSU's to offset the giant pile I have at vestment ( as well as the company is the next big thing so I can ride this mountain back up).
Also if I enrolled in ESPP and maxed it out at 15K for the year, that means if it doubles I got 30K in stock for 12.75K in post-tax money (assuming RSU's are bought at a 15% discount).
Now here's another scam... If I hold those RSU's and ESPP for a year from vestment (not a good idea initially for someone with low diversification, but for senior people not uncommon) then I can get taxed on that at Long-term capital gains rates rather than income tax rates. If I'm in a state that has it's own income tax structure (California, North Carolina) this delta can be massive. This tax dodge right here, and the fact that the company can pay you tomorrow, with a cheaper per $ asset today (Stock) is why wages are not going up. Given the choice between being paid 200K in cash, or 100K in cash, and 200K in stock that costs 50K today what muppet would want higher wages to pay more taxes on, and what company would want to burn more cash now on compensation?
Throw in the fact that companies will report "non-GAAP earnings" where they exclude forward stock liabilities (which is bullshit, but I digress) the company can look to outside investors to be more profitable than it is, but taking the stock compensation method.
@DustinB3403 said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
To be fair, a lot of them likely do make a ton of money, just not for the area. But when a 1000 sq ft house cost $400,000 on the median your 6 figure paycheck is a joke.
Work for a Silicon Valley company, but do it while remote in a low-cost state. The ultimate scam.
The other thing that's annoying here is the use of Wages in this article. Wages are pay per hour. Salary is differnet (It's the pay tied to what is quoted per year and broken down for non-hourly work, or the sum).
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@tonyshowoff said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
Well, I remember when a good engineer could make $125K a year, now they're lucky if they make $60K. In IT it's roughly a similar drop, but even lower, most IT guys I know make around $40K, some as low as $20K. That's just nationally. Obviously certain markets like Silicon Valley, New York, etc will be shift upward, but the difference is seemingly the same
A Good "Engineer" can still make 125K.
As far as software developers the BLS reports a median pay of 103K per year for 2016.
Network and Systems Administrator median pay for 2017 is $81,100.The BLS tracks trending and historical data, and they show that these professions have outperformed the market, and have a forward projection to keep doing so.
I'm not saying the data points you have are anecdotes, but I"m curious why your sample size doesn't correlate with what the federal department whose job it is to track these things?
I will note that pay for SMB IT has gone to crap, but it was never that good to begin with. The majority of IT jobs are in enterprises (because large companies have small armies of people).
And I'm totally disregarding all those people on SW, especially those who threatened to kick my ass for pointing out ITT Tech was a scam, who claim they make $80K+ working at a local doctor's office or credit union
Doctor office IT is disappearing as private practices go away. Many are being absorbed into larger hospital systems (who have large central VDI teams etc), those that don't tend to 100% outsource their EMR, and people like Cerner become their MSP. Now Credit Unions and Regional Banks can still pay reasonable IT wages FWIW. There's a lot of trust and compliance in these sectors and while the smaller ones outsource the core financial platforms, there's still a lot of nitty-gritty stuff that needs to be done right or risk money/fines. 80K there isn't unreasonable.
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@pmoncho said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
I just hope the IT in Silicone Valley start paying up for the Sanitation employees or they will be in a deep pile of S%&*! (pun intended)
Government employees in the bay make decent money, but it's the pensions that are bankrupting some of the smaller cities.
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The stock options idea sounds good as long as the company's value keeps ratching up. That's what makes it a scam in my mind. If it was a sure thing, why wouldn't the company just keep the stock and sell some when it needs cash.
What I don't understand about that whole stock thing - are the employees only allowed to sell it back to the company? If so - well that's still a win for the company - they got to keep the cash while the employee just gets this piece of paper claiming to have value, which it does as long as the company is healthy, but if it hickups or fails, the employee is boned.
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@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
The stock options idea sounds good as long as the company's value keeps ratching up. That's what makes it a scam in my mind. If it was a sure thing, why wouldn't the company just keep the stock and sell some when it needs cash.
What I don't understand about that whole stock thing - are the employees only allowed to sell it back to the company? If so - well that's still a win for the company - they got to keep the cash while the employee just gets this piece of paper claiming to have value, which it does as long as the company is healthy, but if it hickups or fails, the employee is boned.
Happens to all companies, but that is why you sell at vestment, (or a year later tax vs risk depending). You diversify.
Most SV companies like this last beyond the initial vestment period for their stock options.
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@JaredBusch said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
The stock options idea sounds good as long as the company's value keeps ratching up. That's what makes it a scam in my mind. If it was a sure thing, why wouldn't the company just keep the stock and sell some when it needs cash.
What I don't understand about that whole stock thing - are the employees only allowed to sell it back to the company? If so - well that's still a win for the company - they got to keep the cash while the employee just gets this piece of paper claiming to have value, which it does as long as the company is healthy, but if it hickups or fails, the employee is boned.
Happens to all companies, but that is why you sell at vestment, (or a year later tax vs risk depending). You diversify.
Most SV companies like this last beyond the initial vestment period for their stock options.
I'm not sure if you know that Most do or not - I have a friend who got in bed with a company - paid almost entirely in stock, lost his ass when the company folded 2 years later.
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@StorageNinja said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
A Good "Engineer" can still make 125K.
That wasn't an inflation adjusted amount, so technically they're still making less value even if they are making the same amount. Plus if I'm in Silicon Valley or New York or whatever, it's just good enough, but my point was that it was nationally that good, now it's not. I lived in the Bay Area back in the mid-90s and it was out of control back then. You can make a bit more so long as you're living in a place that costs a lot more. So it's meaningless to me how well the jobs there are paying when my point was the loss has been pretty large since then. And @Dashrender already pointed out above there's a general drop of wages, and I even posted about it in News [rhetorical point since you're here].
So what I can get paid the same, possibly a bit more than I did 20 years ago, but because of inflation it's actually still less no matter what and because of the places where I can get it now I'll have to spend almost all of it just trying to live in the area? That sounds like a bad deal to me and all the promises of stock options, profit sharing, etc are just ways to try to make up for the fact they're making more while you're making less.
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@IRJ said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
California has been driving the middle class and upper middle class away for years. You either need to make a lot of money or be government subsidized to be able to live there in most cases.
That's very true. It's all ultra rich or poverty stricken.
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@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
@JaredBusch said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
The stock options idea sounds good as long as the company's value keeps ratching up. That's what makes it a scam in my mind. If it was a sure thing, why wouldn't the company just keep the stock and sell some when it needs cash.
What I don't understand about that whole stock thing - are the employees only allowed to sell it back to the company? If so - well that's still a win for the company - they got to keep the cash while the employee just gets this piece of paper claiming to have value, which it does as long as the company is healthy, but if it hickups or fails, the employee is boned.
Happens to all companies, but that is why you sell at vestment, (or a year later tax vs risk depending). You diversify.
Most SV companies like this last beyond the initial vestment period for their stock options.
I'm not sure if you know that Most do or not - I have a friend who got in bed with a company - paid almost entirely in stock, lost his ass when the company folded 2 years later.
That's pretty common. You only take stock like that if you ...
- Are desperate and are willing to take massive risk just to have a job.
- Really believe in the company and are into being highly at risk.
- Are in a position of serious control and think that you can make a difference.
99% of good people won't consider jobs like that, if the salary itself isn't enough, those "benefits" are considered to be worthless.
Look what happened to the people who took minimum wage and stocks in
.... turns out, they were just minimum wage workers. -
@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
The stock options idea sounds good as long as the company's value keeps ratching up.
Stock options are different. Stock Options are generally given for private companies (like Uber, or Slack) and while there are secondary markets to sell these (or the company will generally buy them back at a valuation rate by a 3rd party, this is typically a LOT lower value than publically traded stock that has access to more investors and the liquidity of the HFT bots etc). Options requires some "risk" on the employee, as he can pay taxes on their current value (which is a lot lower) in advance so he doesn't have to pay the full tax value later (It's actually a bit more complicated and in theory you can do this for RSU's but given RSU's are a lot less likely to shoot up this is a lot it's 100x less common). Yes, in this case you could end up paying taxes on stock that never has a real value (the IRS always wins).
What I'm talking about are Restricted Share Units (RSU's). These are stock that is given at zero cost to the employee, and at vestment, if sold can be sold on the open market (I sell mine on E-Trade). If sold on the day that the shares are released they carry the same tax liability as regular income tax (In fact ESPP sold this way will show up on your W-2 and your 1099-C from your brokerage so if you are not careful you can end up paying double taxes).
@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
If it was a sure thing, why wouldn't the company just keep the stock and sell some when it needs cash.
First off for Options only a Qualified Investor (Someone with over xxx income, or xxx assets) is allowed to invest in a private company's funding rounds. Typically this is done with Venture Capital rounds (or early on with Angel Investors). If you want to see how these deals can go crazy Watch Shark Tank, and read up on what a "Ratchet Clause" is.
If it's a public company the RSU is a PROMISE of future shares assuming the employee stays. It does a few things that are better than paying straight line cash...
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It lets them spend cash today on expansion (Again, Hypergrowth!) as Time Value of Money means a lot to a company growing triple or double digits YoY. Remember the first 1/4 of that 4 year grand isn't due until one year in.
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If the Employee leaves the stock is absorbed back to the company. It's a form of "Golden Handcuff".
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It costs them less than cash. Given my companies stock has gone from a low of ~43 to 149 (today's close) if I had RSU's issued at that dip (or near it) The company can basically have to pay 1/3 today to keep me because it made promises 3 years ago.
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If you want to get uber machiavellian the company can easily track how much outstanding I have and use it to manipulate who stays and goes. The stock gets cut from 80 to 43? and we want to keep Bob? Let's give him some more shares on a two-year vestment to keep him around until it recovers. Want to get rid of Tom? Stop paying him a variable bonus, and stop re-arming RSU's. He'll leave on his own and not ding your unemployment. This actually makes it safer to "make it rain" for key rainmakers because you are not having to spend as much money, and if it turns out you don't need their skills in 4 years, cutting back on RSU's will claw back that ridiculous compensation package.
@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
but if it hickups or fails, the employee is boned
True, but if the alternative is 120K vs 100K + [0 to the Moon!] smart employees who can see the momentum of a company are going to bite on the roll of the dice.
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@StorageNinja said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
Work for a Silicon Valley company, but do it while remote in a low-cost state. The ultimate scam.
That's what everyone who is worth their salt does. Only lower end people not able to qualify for remote work get stuck physically in SV all of the time (for IT/SD folks, investors and such have to be there in person.)
I did this for my time in a SV firm. Worked from Spain and Panama while on a SV salary.
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@Dashrender said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
The stock options idea sounds good as long as the company's value keeps ratching up. That's what makes it a scam in my mind. If it was a sure thing, why wouldn't the company just keep the stock and sell some when it needs cash.
It's not really a scam. It's like saying "we aren't going to pay you", there's no secret here. The stock in lieu of salary is because they have no money and no confidence and are hoping you are desperate and the long shot pay off is better than no change at all. It's not a scam, but rather a developer hoping to get lucky to make much more than he is worth normally, while the company is hoping to get more development than their budget allows. Both parties are hoping to get lucky, while both take a huge risk. But there is no secret, no scam.
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@scottalanmiller said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
That's pretty common. You only take stock like that if you ...
Are desperate and are willing to take massive risk just to have a job.
Really believe in the company and are into being highly at risk.
Are in a position of serious control and think that you can make a difference.99% of good people won't consider jobs like that, if the salary itself isn't enough, those "benefits" are considered to be worthless.
Look what happened to the people who took minimum wage and stocks in .... turns out, they were just minimum wage workers.I'll agree with you mostly on Startups. I think the game is really rigged against the little guy more than ever in that regard.
Publically traded companies where the stock is liquid and risk is a 50x less? That's a different game. Personally, when I evaluated my offer letter I considered the stock compensation and variable bonus at 50% of face value. Now I got lucky and things went the other way but I was still well "in the money" as my new base was still bigger than my old base, but the stock stuff was a fun side gamble that paid off. Note, I also didn't spend more than 5K of my stock comp (vacation), and hoarded it all, diversified it and then used a good chunk of it to buy my new house. The key to variable income is live like you don't need it, and use it for capital purchases that the opex can be controlled.
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@StorageNinja said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
@scottalanmiller said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
That's pretty common. You only take stock like that if you ...
Are desperate and are willing to take massive risk just to have a job.
Really believe in the company and are into being highly at risk.
Are in a position of serious control and think that you can make a difference.99% of good people won't consider jobs like that, if the salary itself isn't enough, those "benefits" are considered to be worthless.
Look what happened to the people who took minimum wage and stocks in .... turns out, they were just minimum wage workers.I'll agree with you mostly on Startups. I think the game is really rigged against the little guy more than ever in that regard.
Publically traded companies where the stock is liquid and risk is a 50x less? That's a different game. Personally, when I evaluated my offer letter I considered the stock compensation and variable bonus at 50% of face value. Now I got lucky and things went the other way but I was still well "in the money" as my new base was still bigger than my old base, but the stock stuff was a fun side gamble that paid off. Note, I also didn't spend more than 5K of my stock comp (vacation), and hoarded it all, diversified it and then used a good chunk of it to buy my new house. The key to variable income is live like you don't need it, and use it for capital purchases that the opex can be controlled.
It's rare to find established companies not paying "anything" and giving all stock. Heavy stock, maybe, but it's above a baseline.
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@scottalanmiller said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
It's rare to find established companies not paying "anything" and giving all stock. Heavy stock, maybe, but it's above a baseline.
Finance can get crazy on variable bonus, or "skin in the game" (I-Bankers, Private Equity).
Public companies only do it for CEO's as a gimmick "CEO makes $1"
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@tonyshowoff said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
A Good "Engineer" can still make 125K.
We pay H1B's 130K base is what I'm seeing for federal stats. A good engineer working for FAANG, or one of the other big players can break 300K TC. You want to see some crazy high offer letters go look on Blind in the spring when offers start going out to graduates.
Back to my original point, TC isn't Wages.
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@scottalanmiller said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
I did this for my time in a SV firm. Worked from Spain and Panama while on a SV salary.
The real fun is getting them to pay for the travel
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@StorageNinja said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
@tonyshowoff said in Nine Out of Every 10 Silicon Valley Jobs Pays Less Than In 1997, Report Finds:
A Good "Engineer" can still make 125K.
We pay H1B's 130K base is what I'm seeing for federal stats. A good engineer working for FAANG, or one of the other big players can break 300K TC. You want to see some crazy high offer letters go look on Blind in the spring when offers start going out to graduates.
Except, again, I'm talking pre-inflation since then. Let me know when they're paying engineers $190K+ because that's what it would be now. It sounds like a lot now because they've kept wages down against inflation.
