The figure 779,000 makes sense if you could take a programmer today and have him travel back in time to 1999. While the programmer was back in 1999 he(or she) would have access to everything that is available in 2014. The programmer would have access to the frameworks, the infrastructure(AWS), and everything else that we have available.
The reason average programmers today don't make on average 779,000 dollars a year, is because like many things, programming hours and talent have been commoditized. There are many people that can learn how to perform these programming tasks. It's easier and more accessible than ever.
An easily commoditized skill can still generate a tremendous amount of value. However, the worker is unlikely to capture most of that value. In fact, if a worker captures all of the value, there would be no benefit to the employer.
The point of the post is that we aren't in a labor bubble, because the amount of value created by a programmer is much higher than the programmer's salary. For instance, suppose that a contractor installing marble countertops on luxury houses out in the desert gets paid 100k a year. It turns out that the value of those countertops is below 100k a year. This could be used to suggest that the jobs themselves will disappear (or salaries must drop dramatically), as the value they generate isn't sufficient to justify that pay.
Now suppose installing those countertops generate 200k a year in value, but that it is relatively easy. That would suggest that salaries could drop even though there is a surplus of value in the existing salary structure. However, it wouldn't suggest that salaries need to drop because value generated isn't sufficient to justify the pay level.
I think that's the point here - that the amount of value generated is so great that programmer salaries could remain high. It doesn't necessarily mean then will, just that we aren't in a salary bubble where salaries are higher than value generated.
because like many things, programming hours and talent have been commoditized.
True. We should have fought it. We should still be fighting it. If commoditization is doomed to happen, then there's a structure (called a union) that enables it to happen on our terms rather than theirs.
The most obvious flaw, a programmer is only worth 5.7 times their 1999 salary if their work is generating 5.7 times as much revenue as it would have in 1999. I see no evidence that this is the case. If it were the case, and the vast majority of programmers are earning 1/6 of what their work is worth, then there is a huge opportunity that you can exploit to get rich. Go for it, and let us know how it works out.
Didn't a lot of major corporations get in trouble recently because they colluded to stop engineers from correcting this imbalance?
Your argument seems to ignore that market forces agreed that engineers were underpaid, and it was only by illegal collusion that their wages were kept to what they were.
To me, the strongest evidence that programmers are worth considerably more than they are typically paid comes form the absolute insistence from silicon valley companies that there is a "shortage" of programmers at the market rate (or well above the market rate).
It's even worse because you might code up a storm and not add any value. You might work a dead project and only loose the company money. I have seen many a John Henry try to save a project from technical failure when it was a business failure.
It's even worse because you might code up a storm and not add any value. You might work a dead project and only loose the company money.
Very true. We have the value-add potential that, on paper, would justify upward of $700,000 per year. Unfortunately, most of us are managed ineptly and so much of that value is squandered. There are plenty of ways that the surplus generated by our talents could be spent (expansion, higher salaries) but right now it's wasted on a high tolerance for mismanagement.
With all due respect, you're interpreting what I say in the most negative light possible, and I don't think you understand the point that I'm trying to drive through.
Programmers can add immense value relative to the cost of employing them. There are many ways in which this surplus could be reinvested. Unfortunately, it tends to be invested in tolerance of mismanagement.
We're capable of adding value at 5x our base salary (and that's a low estimate; 20-100x is defensible) but this gives corporations an excuse to run us at ~20% efficiency.
It sounds to me like the value is coming more from management than the programmer. After all, you admit that few people have the skill to deliver that value and the programmer can't deliver it themselves.
I would argue that many programmers can deliver that value directly. However, most corporate management filters get in the way.
The percentage of managers in technology/software who add more than they take away is small: maybe 5 percent. Another 15 percent or so are essentially neutral, and the other 80 percent do more damage than they add.
