Software workers are starting to experience a reality that other professions have been feeling for a long while. Market downturns benefit the rich at the expense of the poor.
Yup. See plenty of people here in the UK gleeful at the prospect of falling house prices onset by higher interest rates.
Overall housing affordability for the average person who needs a mortgage is still worse now because house prices haven't fallen enough to offset the rate hikes.
Literally the only people who will benefit are cash rich wealthy who don't need to borrow, and landlords who can use high rates and high inflation as an excuse to put up rents.
>> landlords who can use high rates and high inflation as an excuse to put up rents.
Is that really just an excuse? Why shouldn't rents increase in an inflationary environment? What makes them more special than food products for example?
People also use "working-class" to mean someone doing blue-collar labor at a below-middle-class income.
Both views have their merits. A software engineer and a nanny both sell their labor... on the other hand, the fact that the former can employ the latter and the reverse is not true suggests their position is not entirely the same.
Yeah, terms like "middle class" and "professional class" exist for a reason.
If you insist on reducing all of us to only two classes, then working vs owning is one way to do it... but not the only way. One could also divide the "paying" class from the "charity" class, for instance.
And a software engineer at Microsoft with a 401k and a portfolio of stock grants has one foot in the ownership class, even if they still work.
General observation: Anyone who says "there are only two X..." is trying to make you view the world in reductionist terms, and they're choosing the terms to make you focus on the issue that they want you to focus on. But the world has a lot more nuance than that, and some of the other nuances also matter.
I suppose it would be hard to lump billionaires in with arbitrary people who generate capital through investments and business, as well as people who do both or just run small businesses. But, I do think software engineering is a working class job. For a long time it's been awkward to say it, because yes it can be extremely lucrative compared to any given other career, but yet unless you're very lucky, it's a path that doesn't excape the drudgery of whatever else you could be doing.
I put my best effort into waking up for bullshit 6am scrum meetings with my global team a few times a week, eventually with the constant stress of some bug being discovered and having to hold for the next sprint and dreading 1-on-1s with this asshole manager who'd consume the entire time with me having to justify why I "wasn't coding faster"; eventually getting laid off during the worst downturn in the tech job market I've ever seen.
How do you think retired people are classified by Marxists? The class distinction does not mean "work until you die" , it means "you need to/have needed to work to live". So no, you're not a "demi-capitalist". You're still a worker. Because you had to work for that capital. You didn't inherit it/exploit it from the surplus value you extracted from laborers
What good is this sort of binary differentiation? Someone like Zuckerberg would technically be working class because he worked for his money, despite his negative effects on the world.
It's a starting point to my understanding, not an end all be all categorization. It helps get across that the only useful distinction worth making is between those who work, and those whose capital does the work for them
I don't know Zuckerberg's biography but I'd wager to say he didn't have to work or starve ever in his life. And I'm no Bhaskar Sunkara but I'd also wager to say >50% of zuckerbergs wealth is due to the surplus labor value his employees create, not his labor. So in a material examination of Zuckerberg you'd say indeed the issue is not the phase of his life where he worked for a living, but the phase where he is extracts maximum surplus labor value from his workers. That phase constitutes X-99.9% of his wealth, so he is not exactly some hard to pin down edge case
This isn't to say that any company that derives a profit is an evil exploitation factory, it's just an idiots understanding of a useful jumping off point for material analysis.
No, but the average tenure at Microsoft is around 5 years. Depending on their career moves before and after their tenure, they aren’t necessarily rich.
I always figured pay was based on market condition for finding employees, not a companies specific profit.
If a trucking company is losing money, they still have to pay market wages for drivers if they want any trucks to move.
If a trucking company is making large profits because of the types of trucks they bought, their niche, their sales teams, they still basically pay market prices for drivers I would assume.
that's shortsighted. I can understand adjusting the pay raises but not freezing pay altogether.
freezing the pay sends the message of: "we don't really care about the workers and we will extract as much value as it's possible for the lowest possible fee". The problem with knowledge workers is that sometimes it literally takes years to build the skill needed and if you don't actively work on retaining people you will end up with empire building and the minimum work not to get fired instead of exceptional people that can move the needle - the brain drain is real.
to drive this point home: if you have 100 people that you are paying 100 dollars you are paying 10k. if you give them a raise and now you are paying them 105 dollars you are not paying 10.5k. if you don't give them a raise and you tell them to suck it up, 20 people leave and now you need to hire 40 people to be able to pickup the work they were doing, now you will pay 14k. So while in theory you are getting a bargain keeping the comp at 100, you in reality are paying more. Even worse, you may get ideas that you don't need 100 people and layoff 30 people with the remaining people doing the work of 100 people - so in effect you are getting more work for that 100$ and people are actually taking a paycut relative to how much they are working.
> freezing the pay sends the message of: "we don't really care about the workers and we will extract as much value as it's possible for the lowest possible fee".
It’s not a charity. Neither are we as engineers - the job hopping we’re famous for is evidence of that.
We need to move away from thia feudal way of seeing knowledge work. My guess is that all big corporations that fucked around amd jerked people around are going to enter the finding out phase shortly. Watch them struggle hiring decent people for the next few years because of their shortsightedness
Also, you don't like people wanting to make more money? That's like capitalism 101. What's next? People volunteering to work for free and living outdoors?
Everyone wants to make more money. But if you are already making more than you would if you had to leave for another company, hence paid above market, then that is basically greed and nonsensical thinking. That is what I am against. People who are paid above market, wanting more, instead of writing a thank you letter to their CEO.
Pay is usually based on the least amount of money a company can pay you to work for them.
I call this "business as usual". Whenever I need to choose between prioritizing myself vs prioritizing my employer, I try to use the "business as usual" philosophy in which I understand that the employer would fire me if they had to choose to save money (rather than for example cutting CEO's salary or in any other way looking at employee's interests). So I prioritize myself. I learned this lesson when I was contracting for a client and the client told me, on Friday afternoon that starting from next week he doesn't need my services anymore. Basically he fired me on the spot. Next week I noticed that someone was still making programming changes to the site. Seems like he hired a bunch of inexperienced inexpensive developers to do the work. Needless to say, a year later he asked me to jump back in, and I did for double the price. He, in his true "business as usual" style, didn't even blink. He needed the job done and was willing to pay the price I offered. Business as usual. Great life lesson.
> I always figured pay was based on market condition for finding employees, not a companies specific profit.
It has parallels to this Doordash delivery person who expected their tip to be based on the price of the customer's house rather than the price of the order.
I find delivery prices based on either to be weird. Delivery prices should be based on the complexity and difficulty of the delivery. If I get an iPhone delivered I don’t expect to pay a percentage of my house value or my iPhone value, likewise I expect to pay more for delivery of 10 gallons of milk than an iPhone. The price scale percentage is for restaurant service where the price of the food scales with the quality of the restaurants service. Delivery service more or less is entirely fungible and doesn’t vary in general with the price of the delivered item. The only thing I expect to vary with the cost of my house is my property taxes.
The idea that tips are based on price in general is weird. It only makes sense to me if I think about them less as compensation, and more as a power play. Given the history of tipping in the US (where it didn't gain traction until emancipation, where it became the way to pay some former slaves), this power play reading seams plausible.
> Given the history of tipping in the US (where it didn't gain traction until emancipation
There isn't great evidence for this. There was a burst of anti-tipping laws in the 19th century as aristocratic Americans imitated the Tudor English where modern tipping originated. It only became endemic in America during Prohibition, when a lack of alcohol-based income and the, ahem, two-way desire for favors, increased.
This still needs adjustments when your profits can vary based on your employees. For instance if your trucking company asks the drivers to optimize delivery routes or act as salesmen to the other companies, cutting them from profits means no incentive to expand those.
Microsoft's play here is that even if their best engineers go look for greener pastures their profits won't be affected. It might be true, but that feels like a bold move.
>I always figured pay was based on market condition for finding employees, not a companies specific profit.
It is. Anything an executive or company spokesperson says to the contrary is lying. If Microsoft really wanted to retain someone who said they were going to walk if they did not get an increase, then they would pony up.
Remember a "pay freeze" is a pay cut. Inflation does not stop just because the executives tie large amounts of their compensation to short term stock moves.
> Inflation with money printing is a round about way of raising taxes it seems.
Inflation in principle has "value" to the economy as it ostensibly reduces the cost of debt over time.
Of course it's kind of moot if the inflation is primarily a product of profiteering and price gouging - haven't multiple studies in multiple countries now shown that 50+% of the current "high inflation" is the result unwarranted price increases in monopoly and semi-monopoly industries?
This is ignoring things like published inflation rates not including inflation of the single large expense for 99% of the populace. The idea that inflation only just hit 8%, when year to year rent increases for the same property were routinely in excess of 10% for a decade is absurd. As is the value of a property (for the purpose of property taxes/council rates) not increasing at the same rate - which means offloading costs onto tax payer vs property owners, Yay!
Exactly. It's actually a pretty smart move by the feds.
New/increased taxes are extremely unpopular. This way they get all the benefits of shiny new social programs spending without getting the bad press of higher taxes.
oh yeah, or "we made the work environment shitty to save money, and a bunch of your coworkers left" so now you have more work _and_ a shittier environment.
i think it ebbs and flows. if the environment becomes shitty enough eventually you will go out of business. so you will see corrections or correction attempts if things are bad enough. the tragedy of software development is that a small investment upfront could prevent massive investments down the road, yet nobody will try to do the corrections upfront.
If you want to reap the rewards of corporate profits, go form a worker's collective, or at least find a company that will pay you in total comp that is weighted toward stock options or RSUs. Agreeing to work for a salary, and then being upset that the MBA sharks aren't sharing the profit with you out of pity? Highly-intelligent software developers should know better.
> The Fed/Corporations are aligning trying to stop inflation.
That's a big claim to make without any evidence. Do you have anything to suggest that big companies in fact are colluding with the Federal Reserve to keep employee salaries down?
Feds raise interest rates and the stock market demands layoffs. The reward is a stable or increased stock price which is a proxy for growth. This keeps money in the stock vs pulling it to get 4% interest. So the layoffs are done in anticipation of (or even perhaps precipitate) a recession which helps reduce inflation since people reduce spending when they lose their jobs. Laid off Microserfs won't be remodeling their homes or buying new ones and what not.
I don't think that points to companies colluding with the Fed, that's just companies adjusting to market forces the Fed created (the difference being coordination).
I don't even know if an anticipated recession is in play here. The simple explanation is that safe investments are now pulling 4% returns (pre-inflation), so now riskier investments like stocks have to return more than 4% to account for the risk. Nobody wants stocks where the best outcome is matching inflation (unless safe investments are returning less than inflation).
If companies were involved in the discussion, I suspect they'd be most interested in getting interest rates back down to 0 because it pushes money into the stock market and raises their share price.
>I don't think that points to companies colluding with the Fed, that's just companies adjusting to market forces the Fed created (the difference being coordination).
You are a programmer, right?
You understand the concept of indirection?
The only way I can imagine this wooshing is if you don't realize that indirection isn't just a technological mechanism. It is, in fact, near omnipresent, and reached for constantly by people in management positions. It's a sociological tool that imbues the wielder not just with great power to get things done while detaching themselves from the suffering created by doing so, but also gives them enough plausible psychological distance that even the masses tend to cut them a check when in reality, a bit of thought on the arrangement of things boils things down to "actor creates signal, signal hanfler handles"
It was a landmark year in part due to freezing pay. I don’t know, everyone likes more money, but having been in leadership positions and now being an owner it’s not as simple as most “individual contributors” tend to imagine. For non-trade/non-service industry jobs, longevity or inflation are never good things to peg pay rates to, imo. Market rates and individualized retention considerations are good. For all we know, the “pay increase” budget was used to fund higher premium costs on the backend to keep ee benefit costs flat. With the glut of industry layoffs and supply of talent theoretically seeing a bump, a pay freeze doesn’t sound absurd to me. IME, the reality is that most higher level employees don’t jump over single digit percentage pay increases. If they dislike the environment they’ll go in any case unless you’re paying an absurd nuisance fee to keep them. If they like the environment and job, it’s worth more to them to stay in that environment and ride out these intermittent policies. I’ve never worked at a company where I felt entitled to an annual cost of living pay raise. If you feel you’re getting a fair deal for the important work you’re doing, keep doing it. If it’s a raw deal, jump. But the entitlement attitude is one I stereotypically associate with lower-value cattle employees. Do more, get paid more. Take on more responsibility, get paid more. Career and talent progression isn’t simply pegged to time for everyone, and so neither is pay.
I don't come from much, had a successful if scrappy startup and am at FAANG now. I feel ya. This is a blinkered view, though I appreciate it.
The key to the negative vibe is the absurdity of it all: the expectations set swung _rapidly_, MS is clocked $18B in profit right before announcing these freezes, and no, revenues don't go up from freezing pay. Note also the savings from the pay freeze haven't happened yet - they're saying no raises until December 2024, so savings starts in December 2023.
Yeah, guilty of not reading article detail, was assuming their net was landmark, and no, not assuming revenue is impacted by reduced expense. Also assumed pay freeze was presently in effect, meaning immediate cost avoidance and predictable expense though term of policy. Either way, I have some sympathy for the business interest and would be as interested in the internal rationale, at least as much as the reactionary injustice take/assumption.
It's the experience of being responsible for a broader whole. Hard decisions are required in that context. It all seems simple from the outside - I know because I've been there too.
I'll grudgingly second this. at a certain point, you simply run out of options. you have fixed cash flow, bills to pay, people (service providers) wanting more, and growth is genuinely hard. The thing that disgusts me about it, is we're not more clear about these sorts of things in terms of manager/employee relations.
In situations like this, why does HN seem to be such a crab bucket? I see so much "ah yeah well tech workers are finally getting a taste of reality." We have to fight to pull up other industries, not just laugh when tech "finally" takes a beating.
> Why would an increase in revenue be an implicit reason for salary increases?
Because increasing salary when revenue increases is a positive way to ensure employer-employee relationship is reciprocal to some extent. Otherwise people will take or not take actions to ensure that relationship gets balanced back into reciprocity. Have you heard of quiet quitting?
Yes, you absolutely can. Executives get it ALL the ways. Your statement sounds like you've been conditioned, it is absolutely possible to have it both ways.
