I think the OPs main point is that salary is as much a function of location as it is talent. Not everyone is fortunate enough to be able to move to Silicon Valley.
I have heard the compensation is a big drag for tech jobs in CA. But I don't really understand why that is. If tech hiring is so brutal, why wouldn't the wages be more in line with what their neighbors just south in the USA are paying? After all, if there is a brain drain and tech works from CA are leaving (in part due to comp, presumably), then why not pay more?
That's the thing. I make a bay area salary working for an east coast tech company. If silicon valley thinks they can pay less they are shooting themselves in the foot and talent will leave. They seriously want to cut salaries in this inflationary market? Lol.
Good thing Babel, Open Source and everything else related to this has nothing to do with San Francisco or Silicon Valley but still the group somehow want to have Silicon Valley salaries. Why use the most expensive place on earth as a benchmark?
Having lived in Silicon Valley for 4 years now, I find salaries here complex. You get really different results depending on where you look. For example, the big, established companies that are competing with each other for talent pay a lot more than startups do.
The author is failing to understand basic supply and demand. Just because the company doesn't care that the developer is in Silicon Valley doesn't mean there aren't a ton of companies that do care and will pay a large salary for it. Either you compete with those companies and offer a high salary, or you will just exclude yourself from higher silicon valley developers.
Just because you don't value location doesn't make the location premium any less real. The simple fact is that there is a lot more demand for developers in the bay than there is in South America.
A company could certainly overpay the devs outside of SV so the numbers look the same, but it's fiscally irresponsible.
Industry average doesn't really apply. What the Silicon Valley local market is does apply, and if there are places that pay better, they'd go there. Why stay at a place where you're underpaid relative to your peers when another place down the street offers more money? I wouldn't.
Besides, I've read that there's a lot of job hopping going on in SV for better pay, and that includes googlers. It's hard to see how one could make systematically underpaying a group of people work.
Then why pay $200k for a software engineer in the valley when the same talent can live outside of the bay area and can do with 1/3rd of the salary? The question I have is what portion of the $200k salary is 1) due to the raw talent of the individual 2) because they live in the bay area.
This forum almost certainly skews heavily towards people in Silicon Valley or working at Bay Area companies. AKA the very highest earning people in tech.
Are you working in Silicon Valley for a large tech company? If so you may be negotiating poorly. Otherwise, you may be getting typical or even good pay for where you are.
Eh that reasoning is weird but the location based income just makes sense to me. Do we really expect everyone to make silicon-valley salaries when they don’t live in such ridiculously expensive areas?
Is this in Silicon Valley? In my area (a southeast tech hub) I’ve seen these type of companies offering jobs in the $100k-$120k range, which is far below Microsoft or any FAANG.
It might be that some companies offer near-SF salaries to make it a slam dunk for the new hire. From the point of view of a Valley giant, they probably churn higher-salaried people in SF/SV all the time, so one more located elsewhere is not a biggie. At 10% less it's still a win, and because of the differential from local prices, the new hire will be super excited to join and stick around, so why not? The more you push down towards average local salaries, the more you have to compete with local businesses and the more you risk getting average performance out of the hire, all for a relatively small cash saving.
Most Silicon Valley companies produce products or services whose revenue does not scale with the cost of living in the area. Yet they pay their employees a lot more than in most parts of the world and they pay a hell of a lot more for office space. Contrary to what is written very frequently here by SV dwellers, it is actually not common for fresh graduates to get six figure salaries--only in Silicon Valley and NYC.
The terrible irony of it is that the over-abundance of high salaries has led to those salaries meaning practically nothing; there have been plenty of threads here on how people can barely afford 1br apartments in San Francisco while still saving for retirement and living a comfortable life, etc. Salaries for very senior folks become so massively inflated due to the cost of living--sometimes in the $200k+ range--that very few startups can afford to hire even just a few of these guys. If they were in a cheaper area where a top salary, rather than a starting salary, was $120k, though, then they'd be in a much better position to hire a range of employees in terms of experience and age.
Several people here are taking it as a given that a technology company has to hire some quota of people from the Valley.
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