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Businesses The Almighty Buck

Talent War in Silicon Valley Demands High Salary (axios.com) 189

An anonymous reader writes: Employees at Google's parent company Alphabet earned "a median pay package of more than $197,000" in 2017, around 18% lower than Facebook's median salary of $240,000, the Wall Street Journal reports. Per the Journal, this illustrates the competitive "talent war in Silicon Valley, where talented engineers are in limited supply." These two salaries were more than $100,000 above Amazon's median pay, which sat at $28,446. The median price for a home in Silicon Valley is upwards of $1 million, in Seattle the median home price is just under $800,000.
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Talent War in Silicon Valley Demands High Salary

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  • Median Salary (Score:5, Insightful)

    by Talderas ( 1212466 ) on Monday April 30, 2018 @07:08AM (#56528263)

    There's nothing valuable or sane about comparing Amazon's median salary to that of Facebook or Alphabet. When either of the latter two start employing thousands of low wage workers you'll see their median salary plummet to Amazon levels.

    But hey, I guess we can't expect the Wall Street Journal to apply basic critical thinking skills.

    • Re:Median Salary (Score:5, Insightful)

      by kenh ( 9056 ) on Monday April 30, 2018 @07:33AM (#56528439) Homepage Journal

      I'd be curious to see Amazon's median salary minus the warehouse workers. They compared two marketing/advertising giants with a retail enterprise, and we're supposed to feel bad that Amazon's tens of thousands of warehouse workers don't earn a quarter-million dollars/year like top-talent programmers and technology specialists?

      Puh-leeze.

      • I'd be curious to see Amazon's median salary minus the warehouse workers. They compared two marketing/advertising giants with a retail enterprise, and we're supposed to feel bad that Amazon's tens of thousands of warehouse workers don't earn a quarter-million dollars/year like top-talent programmers and technology specialists?

        Puh-leeze.

        Exactly. Having a lot of lower wage employees is going to drag the median way simply do to the numbers. You're comparing two populations that are not the same and drawing a conclusion from it. Unfortunately, I'd wager many of the people reading the WSJ won't recognize the fallacy.

        • Re: (Score:2, Informative)

          Having a large number of lower range salaries will lower the _average_. It need not have any effect whatsoever on the median salary, which is the salary where half of the personnel make more, and half make less income. If there are "classes" among the employees, the clusters of income for those classes can profoundly distort an analysis of the wages.

          • Having a large number of lower range salaries will lower the _average_. It need not have any effect whatsoever on the median salary, which is the salary where half of the personnel make more, and half make less income. If there are "classes" among the employees, the clusters of income for those classes can profoundly distort an analysis of the wages.

            As you point out, a large cluster of employees will distort the median. Amazon has a lot of low wage warehouse staff, who's numbers dwarf those of higher wage employees. Those, the salary distribution is not a bell curve but has a very fat tail at the lower end, thus driving down the median wage. If you compare Amazon's median wage to a company that doesn't have the same wage distribution, as the WSJ did, you are making an invalid comparison. If you want to compare Amazon to SV companies you need to use sim

          • Having a large number of low salaries workers can distort the median.

            For a hypothetical, let's say each company employees 9 workers.

            Alphabet's employees are paid ( 100,000 | 120,000 | 130,000 | 140,000 | 197,000 | 200,000 | 200,000 | 200,000 | 210,000 ).
            Facebook's employees are paid ( 100,000 | 150,000 | 170,000 | 210,000 | 240,000 | 260,000 | 265,000 | 270,000| 275,000 ).
            Amazone's employees are paid ( 23,000 | 24,000 | 26,000 | 27,000 | 28,446 | 30,000 | 100,000 | 110,000 | 120,000).

            Alphabet's mean is 166,

          • What if two-thirds of your workforce are warehouse pickers? What does that do to your median salary?

      • We have college students that intern at Amazon starting between $90K-$100K, right out of college. They work long hours (10-12/day), but none of them would say they're not compensated well for a starting job.

      • I'd be curious to see Amazon's median salary minus the warehouse workers.

        From what I've heard, the salaries are comparable albeit a bit lower.

        But even then, base salaries are useless by comparison. A useful comparison requires the inclusion of benefit packages, PTO/vacation, hiring (or annual) bonuses (and in the case of STEM companies, college reimbursement.)

        Base salaries do not make apple to apple comparisons, and it is a near-fatal yet common mistake that techies make (specially when they consider going into consulting.)

      • > and we're supposed to feel bad that Amazon's tens of thousands of warehouse workers don't earn a quarter-million dollars/year like top-talent programmers and technology specialists?

        No, but maybe you should feel bad that whatever their salary is it dragged the median down to $28,000 so they're making much less than that, all the while not being able to take a break long enough to use the can so they're pissing in bottles and working in cold in winter, boiling hot in the summer. All so you can save an e

        • No, but maybe you should feel bad that whatever their salary is it dragged the median down to $28,000 so they're making much less than that

          Median literally means middle. It's not an average. It just means as many workers make less than 28k as make more than that. The lower half can all have salaries of 27.9k and the upper half can have salaries in the billions, and the median stays the same.

          • > The lower half can all have salaries of 27.9k and the upper half can have salaries in the billions, and the median stays the same

            Mathematically that is correct but do you seriously believe that's the case? Especially in light of the multiple articles published on the minimum wage pressure cookers that are Amazon Fulfillment Sites?

    • Yes, but it is proof that it is MAXIMUM WAGE, not MINIMUM WAGE, which drives inflation.

      • Re: (Score:3, Insightful)

        by omnichad ( 1198475 )

        That is a huge leap in logic. Inflation is primarily driven by prices on commodities that poor people spend most of their income on. More income at the bottom means more demand for those commodities, driving up prices.

      • Re: Median Salary (Score:3, Interesting)

        by phantomfive ( 622387 )
        That is a rather ignorant way of looking at things. Inflation is caused by printing too much money. The federal reserve is largely in control of inflation, and can usually get as much or as little as they want. Inflation is not controlled by either the maximum or minimum wage. For more information on this topic, look up the monetary equation mv=pq. Raising the minimum wage doesn't affect inflation, but it increases unemployment as some businesses won't be able to afford the new higher wages, and will hire f
        • That is a rather ignorant way of looking at things. Inflation is caused by printing too much money. The federal reserve is largely in control of inflation, and can usually get as much or as little as they want. Inflation is not controlled by either the maximum or minimum wage. For more information on this topic, look up the monetary equation mv=pq. Raising the minimum wage doesn't affect inflation, but it increases unemployment as some businesses won't be able to afford the new higher wages, and will hire fewer people. The labor pool has its own supply demand curve. Again, if you don't understand why it is called a curve, please don't waste your time arguing. To really understand this topic well it would be helpful to get a good economics book.

          You are oversimplifying a bit: https://www.moneycrashers.com/... [moneycrashers.com]

          Inflation is also impacted by increased demand. If people have more money but the supply of the goods they want to buy does not increase, we have inflation due to more demand than supply (item 3 in the link). If products become more expensive to produce (having to pay workers more), we have inflation as companies pass on this cost (or hire less people as you mentioned), item 4 in the link.

        • A "good" economics book? Here's a better money equation for you; Income = Expense = existing money * velocity + bank lending [+ government deficit + trade surplus].
          • Why is that one better?
            • Because new money also contributes to economic activity and inflation. Yet economics textbooks completely ignore the capacity of banks to create that additional spending power out of nowhere. Or suggest that government surpluses will magically make the economy grow, when the opposite is true. Trade imbalance also explains why Germany is doing so well, while Greece is doing so poorly.

              Every boom is accompanied by unsustainable growth in bank lending, every collapse linked to a reduction in money creation. Th

              • Yet economics textbooks completely ignore the capacity of banks to create that additional spending power out of nowhere

                If you take a macroeconomics 101 class you'll spend a couple weeks on this exact topic. In mv=pq, which really is the most helpful model for understanding inflation, it's covered under m.

        • Comment removed based on user account deletion
          • It would if it triggered a larger issuance of debt

            How exactly are you thinking that would that happen?

            Economics books are rarely helpful.

            Uh, stop posting while drunk.

            • by dcw3 ( 649211 )

              You're funny. Economic predictions are about as good as those of a typical meteorologist...fifty years ago.

              • You're dumb. You get your knowledge of economics from politicians and people who are trying to manipulate you. Take a class and become smart.
                • by dcw3 ( 649211 )

                  You don't know squat about me or where I get my economic education, and yet claim that you do. Clearly, you're the moron.

                  • I know about your education because you've revealed it. You never took an economics class, or if you did, you didn't learn from it. Economics makes plenty of predictions accurately, but you don't realize it because of your information sources.
    • When either of the latter two start employing thousands of low wage workers you'll see their median salary plummet to Amazon levels.

      This. There's no sane way to take the entire group of people and compare them using a normal statistical mean, or median. That alone should be evident by the fact that Facebook has some 25000 people, Google has 70000 people. Amazon has 566000, checking the number of zeros.... yes I wrote it correctly.

      Comparing employees between these companies is asinine.

  • by Austerity Empowers ( 669817 ) on Monday April 30, 2018 @07:09AM (#56528279)

    ...the sillycon valley. It's always going to be the center of tech, but there's a large hunk of america that costs a tiny fraction where anyone can live like a king on $100k/yr.

    It's a nice place, I spent the past week there, but I am glad to have left too. Paying 33% more in gas, 50% more in food, 30% more in groceries and the crowding and density didn't really endear it to me. To get an equivalent size house there to what I own would have cost almost 20x the price, and I know damn well I'm not going to get 20x the salary.

    I'm just not convinced that in the digital era that the silicon valley created that we all need to pile in there anymore. Video conferencing works well, email works well, networks work well. Let's spread out some.

    • by AmiMoJo ( 196126 ) on Monday April 30, 2018 @07:27AM (#56528395) Homepage Journal

      People have realized that if they go and earn big bucks for a few years and then bail to somewhere cheaper, that mega salary will help them get above the going rate anywhere. Recruiters don't look at a $200k salary and think "oh but that was Silicon Valley, this person will take $50k out here and maintain the same lifestyle", they think "well I had better offer at least 100k to get someone like that!"

      • by Anonymous Coward on Monday April 30, 2018 @07:35AM (#56528449)

        Not really. Years ago I worked in the Midwest and weâ(TM)d laugh at the people coming from California demanding similar inflated salaries.

        • by Salgak1 ( 20136 ) <salgak AT speakeasy DOT net> on Monday April 30, 2018 @07:59AM (#56528543) Homepage

          And that's the flip side of it: The so-called "Golden Handcuffs". We have it, to a lesser extent, in Metro DC as well. The pay is significantly higher, and you adjust your lifestyle to it. And then. . . .companies outside "the bubble" cannot offer that level, even if the cost of living is low enough that it's a defacto lifestyle IMPROVEMENT. . .

          • I'm not sure how much a lifestyle improvement a $200,000 a year salary would be when you're losing half of that to taxes and paying $4,000 a month for a friggin one bedroom apartment.

            • by imgod2u ( 812837 )

              Half of 200k is more than 3/4 of 100k. But realistically, 200k is just salary. Compensation involves much more than that so you're talking about possibly *saving* 200k/year in equity+cash.

              Do that for 5 years and you can go live without worry elsewhere.

            • I'm not sure how much a lifestyle improvement a $200,000 a year salary would be when you're losing half of that to taxes and paying $4,000 a month for a friggin one bedroom apartment.

              Even if there is some lifestyle cuts between location and payroll, the main takeaway is that the amount you save for retirement will probably be a similar percentage of salary. So after retirement, those with lower saleries in lower cost areas can essentially stay where they are. Those with hire salaries could stay where they are or retire to the lowercost areas in style.

          • by mikael ( 484 )

            They call it "Golden Jail" in Los Angeles as well. You've bought a house there, want to trade up to a bigger home, but can't really afford the prices. But you certainly don't want to move to a smaller home or somewhere further out. So you're trapped in a Golden Jail.

            Similar thing in the UK. Salaries tend to be higher down South especially close to and in London. People in the North of the country would always go "down South" to advance their careers or when there were layoffs. Then they get a payrise. But t

        • Oddly we make the same or close to the same inflated salary outside of Ca, and actually do live like kings. Maybe it depends on industry.

        • I never left the midwest and worked up to $140k. Having never had to deal with any housing crises or the congestion that comes with a metro area.

        • by Junta ( 36770 )

          I think the assertion that some places would only offer $50k underestimates the state of affairs in the rest of the market. Sure, having a *median* of over $200k is unlikely outside of California, but 100k isn't too outrageous, regardless of whether the person came from one of the "big names" or not.

      • > they think "well I had better offer at least 100k to get someone like that!"

        No, they think "get a load of this guy, who the hell does he think we are? Google?" The reason a lot of tech people don't move elsewhere to live cheaper is that the salaries are also smaller. Live in Silicon Valley and put away even 5% of your salary for retirement will set you up for success more than a job in the midwest and setting aside 15% of that salary. Plus the relative ease of job mobility, if that's your thing.

        • > Live in Silicon Valley and put away even 5% of your salary for retirement will set you up for success more than a job in the midwest and setting aside 15% of that salary.

          ^^^
          What he said. Figure out how much you can afford to save and then save like crazy. It makes for an exit strategy by or before 60 that's entirely acceptable.

    • Comment removed (Score:4, Interesting)

      by account_deleted ( 4530225 ) on Monday April 30, 2018 @07:33AM (#56528441)
      Comment removed based on user account deletion
      • Um, no ?

        I'm 48, have been working for Apple for the last 14 years or so, and live and work in the Bay Area. Sure, things are expensive, and once I stop being paid we'll bail to the Oregon coast or similar for retirement, but life is pretty good.

        My wife is a full-time mum, my kid goes to a nice school (better than I ever had), the mortgage will be paid in 5 years or so, and we've just got a puppy (a Newfie :) I'm intending to stay until retirement. I'm hardly the oldest in my group (R&D) either, and I wo

      • by crgrace ( 220738 )

        I live in San Francisco and am raising a family (three kids) in the City. It's a nice place to raise kids. Lots of educational opportunities, entertainment, playgrounds and the like easily accessible.

        The cost of living is high, yes. But if you're in tech (like me) the salaries more than make up for it. Do you know what metro area has the largest disposable income on average? The Bay Area. So, even taking into account the higher cost of living, you STILL end up with more money in your pocket than most other

    • ...the sillycon valley. It's always going to be the center of tech...

      In my experience, any statement that contains "always" that's not based in scientific and repeatable observations, especially those that are speaking of some future state of things, usually turn out to be incorrect. I'm not saying this one is, only that it's very likely wrong.

      Detroit used to be the center of automobile manufacturing, but today "motor city" is awash in urban blight and poverty while the manufacture of automobiles has moved away.

    • ...the sillycon valley. It's always going to be the center of tech, but there's a large hunk of america that costs a tiny fraction where anyone can live like a king on $100k/yr.

      Subject to living with a very shallow employer pool. I know people who have taken gigs in the middle of nowhere, relocating family and all, and then they are stuck with 2-3 employers. That's the reason many of us prefer the expense of living in a, no pun intended, expensive metropolitan area. Should shit hit the fan I know I have about 2-3 dozen possible options (some great, some good, most mediocre, but having that many options is much better than just plan A and plan B and shit there is nothing else.)

      . Video conferencing works well, email works well, networks work well.

      When

    • But are any of the places you're talking about the kinds of places that people like the talent in question want to LIVE?

      For instance, I wouldn't live in Lawrance Kansas if you gave me a 2300 sqft house for FREE as well as any vehicle I wanted.

      There's nothing interesting to DO there. There's no prospects for a relationship I'd be interested in (most girls there are really proud of their church attendance, according to my sister) It's not near anything remotely interesting.

      Cost of living varies for REASONS.

  • We have just recently learned that accounting pays so much better than IT: https://ask.slashdot.org/story... [slashdot.org]

    So, how big are accountant salaries in Silicon Valley?

    • by AuMatar ( 183847 )

      First off- whoever posted that put no evidence in at all. Secondly- the vast majority of people at those companies are not IT. They're programmers. Totally different payscale. The actual IT people are probably paid well, but not anything like the numbers above.

  • by DeplorableCodeMonkey ( 4828467 ) on Monday April 30, 2018 @07:36AM (#56528451)

    Is that that average salary includes data scientists, AI researchers, etc. which command higher salaries than typical software engineers. I would be very surprised to find that the median salary of a SWE at Facebook is $240k unless they bring a very impressive resume with them. The SWEs who just build out new user-facing features with Hack and React are likely not anywhere near that.

    • These are almost certainly "total compensation" numbers including salary, bonus and notably equity.

    • Is that that average salary includes data scientists, AI researchers, etc. which command higher salaries than typical software engineers. I would be very surprised to find that the median salary of a SWE at Facebook is $240k unless they bring a very impressive resume with them. The SWEs who just build out new user-facing features with Hack and React are likely not anywhere near that.

      It's not clear what "salary" means in the Wall Street Journal article. Is that base salary, or does that include stocks and other bonuses? Certainly the sampling of salaries on glassdoor and payscale are not consistent with the numbers in the WSJ article. From my experience, the glassdoor and payscale numbers are more believable than the WSJ article. For example, payscale says that the median age and tenure at Google are 29 years old and 1.1 years, respectively. If the median salary is $197k, that mean

  • Captain Obvious strikes again!

  • isn't always gold as the saying goes.

    Those salaries look pretty decent, until you factor in the cost of living out there. I get a good laugh from folks who are paying $1M+ for homes and need four room-mates just to make it work. I would love to see someone track / post their expenses for a few months just to compare how outrageous things really are.

    I would post mine, but don't want all the California types moving here as they tend to bring all the silly ideas that caused them to move away in the first pla

  • > Employees at Google's parent company Alphabet earned "a median pay package of more than $197,000" in 2017, around 18% lower than Facebook's median salary of $240,000, the Wall Street Journal reports. Per the Journal, this illustrates the competitive "talent war in Silicon Valley, where talented engineers are in limited supply." These two salaries were more than $100,000 above Amazon's median pay, which sat at $28,446.

    Typo alert. Amazon's median salary is probably $128,446, based on context .. and reali

  • Amazon's salaries are notoriously low because the majority of their compensation is in the form of stock. So you could get 2/3rds of your "total comp value" in the form of stock instead of a cash bonus/salary like in other companies.

  • But in Silicon Valley, War earns a salary, a fat one on top.

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