I think this would be an interesting hypothesis to entertain if it wasn't already falsified by the observation that FAANG (& similar) pay much more than a 30% premium over the "median" tech job not just in the US, but in pretty much every market where they compete.
An instructive example would be India: TC for senior engineers at Google, Amazon, Uber, etc is already north of $150k there. Note that this is _already higher_ than the median tech salary _in the US_. Meanwhile there are still places in India paying new grads $10k.
You see something similar in Ukraine, where 40-50k was a reasonable rate for senior engineers, and then Lyft enters the market and starts giving seniors 6-figures.
I think the answer, as always, is that there are just not enough sufficiently talented & qualified engineers, even taking into account the global talent pool, to balance the rapidly increasing demand for those engineers. If it was just one or two companies paying this level of outsized compensation I'd be skeptical of the long-term trend, but it's not - this is pretty much all modern tech companies, because the unit economics of software businesses make good developers extremely valuable.
I was curious what the story looked like for South America, and, hey, turns out these tech companies already pay 6-figures there too. Heck, Coinbase is offering _mid-level_ engineers in Brazil 6-figures for remote roles.
> An instructive example would be India: TC for senior engineers at Google, Amazon, Uber, etc is already north of $150k there. Note that this is _already higher_ than the median tech salary _in the US_. Meanwhile there are still places in India paying new grads $10k.
Keep in mind these companies are really trying to get the 1% of developers in that market. Anything below the 95th percentile is unemployable. [0] [1] [2]
I would be wary of the 95% figure. Another user on HN (who currently works at FAANG) pointed out that he took the test used in that survey and failed. The interface for the coding test was not reflective of how actual software development is done (ie no syntax highlighting, memorization, etc). Even accounting for the diploma mills and the private universities with underresourced CS departments, the 95% figure seems unusually high.
Even if we assume for the sake of argument that that's true, I think that only enhances my point: there aren't enough engineers that these companies are willing to employ such that they would tip the scale on the supply/demand balance sheet and push compensation down (in real terms; obviously every additional marginal engineer pushes down compensation in counterfactual terms).
An instructive example would be India: TC for senior engineers at Google, Amazon, Uber, etc is already north of $150k there. Note that this is _already higher_ than the median tech salary _in the US_. Meanwhile there are still places in India paying new grads $10k.
You see something similar in Ukraine, where 40-50k was a reasonable rate for senior engineers, and then Lyft enters the market and starts giving seniors 6-figures.
I think the answer, as always, is that there are just not enough sufficiently talented & qualified engineers, even taking into account the global talent pool, to balance the rapidly increasing demand for those engineers. If it was just one or two companies paying this level of outsized compensation I'd be skeptical of the long-term trend, but it's not - this is pretty much all modern tech companies, because the unit economics of software businesses make good developers extremely valuable.
I was curious what the story looked like for South America, and, hey, turns out these tech companies already pay 6-figures there too. Heck, Coinbase is offering _mid-level_ engineers in Brazil 6-figures for remote roles.