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It's been interesting so far to see almost every prediction about the future meet unforeseen obstacles.

"We'll have flying cars!" (Need runways, air traffic control, can't let drivers steer their flying car themselves, too dangerous, etc.)

"Work will be outsourced and we will lose our jobs!" (Your comment)

"Artificial intelligence will replace humans and revolutionize everything!" (AI is really hard and nowhere as promising as once believed)

"With gains in productivity, we'll all work 10 hours of week and spend the rest of time writing poetry and traveling!" (We'll just increase total economic activity by making you work the same number of hours)

"The Internet will put an end to ignorance by giving everyone free access to the total sum of knowledge in existence" (Human biases are really entrenched and can't be changed by any amount of information)

I wonder how many other futuristic predictions being made right now will age like milk.

Maybe Indian tech labor isn't that cheap. But Silicon Valley tech labor is very expensive (perhaps overpriced!). Maybe the latter is the key factor...

I would argue there is no such thing as overpriced labor when its the market that sets the price. You will never get a Mercedes for the price of a Honda.

So be skeptical when a politician or mega corp manager utters the words "labor shortage" - there is no such thing.

Sure, though it takes a bit of time for the actors to become conscious they'll get the same value at a lower price.

They've had plenty of time and they were plenty conscious. And here I am getting paid well for writing code without a comp sci degree.

Things have changed a lot though. Covid is pushing us to a remote-heavy world and that's changing how people understand the value of labor. I can imagine, for example, good skill in peripheral areas will get paid more, poor skill in less peripheral areas will be seen as overpriced.

There is definitely a shortage of good quality Engineers in SF. That's the key reason why the engineering salary is so high. Also the weird housing laws.

The same engineer who is making 30k in India makes 5 or 6 times the salary when moved to the SF office. Similarly the Engineer who makes 200k+ in SF gets 4 or 5 times less when moved back to India.

Comparing Mercedes to Honda is not the right comparison. There are good and bad engineers in both the US and India. So why pay 150k+ for a Honda in US when you can get the same Honda in India for 30k.

Sounds like African automobile tariffs when you put it that way

Let me put it this way.

Is the reason why a 1 bed room house price in SF is 5 times or more higher than that of a similar house in Kiev or Bangalore because it's 5x+ the quality?

No. It's mainly because the supply of housing cant keep up with the demand.

As you can see, the housing price started to drop as more and more companies are going remote.

>There is definitely a shortage of good quality Engineers in SF. That's the key reason why the engineering salary is so high.

Do we say there's a caviar shortage because it's expensive? Or say there's a CEO shortage because CEO compensation is high?

Good CEOs in good companies makes much more than the average CEOs in average companies.

Every company in the USA wants a good CEO. But there are only very limited number of CEOs in the USA that has a good track record of running a successful company. So companies are willing to pay more and more for the top CEOs.

It's the same reason why drivers are paid very low. If there were only 100 drivers in SF who were capable of taking you from point A to point B with a reasonable amount of certainty they would be also be paid in millions.

Everything is supply and demand.

In case of SanFrancisco, the supply of good engineers that are available to be hired used to be limited compared to the demand.

Once you remove the restriction of being able to be physically present in SF, the supply increases much more than the demand. Which results in the reduction of salaries.

> In case of SanFrancisco, the supply of good engineers that are available to be hired used to be limited compared to the demand.

If this were the case, salaries would rise until the supply equaled demand.

People have been calling this "shortage of engineers" for decades. A shortage means that demand exceeds supply at a given price (salary). If the market were free to adjust there can't be a long-term shortage. Salaries would quickly rise to the point where supply and demand were equal. If there is really a persistent shortage, why hasn't this happened?

When you talk about goods, long-term shortages can happen when either the supply is artificially constrained or there are some kind of price controls in effect. Which one is causing this shortage? There is no labor cartel in software. Nothing like the AMA keeping the supply of doctors limited. Anyone can learn from online sources and become proficient, and universities graduate truckloads of developers. So there's no artificial labor constraint. There is also no externally-mandated maximum salary for developers. So how can there be a long-term shortage?

You literally could buy mercedes for price which could have 2 times difference based on location.

So what concept is the word "shortage" supposed to communicate?

"The best people applying for our open positions keep rejecting our salary offers and turnover is high despite regular 2% pay rises."

No, I mean, non-sarcastically, what concept is it intended to communicate?

Is it not possible for a market economy to have a food shortage? Just a price of food at which some people happen to starve to death?

No programmer shortage, but just a price of programmers at which some business opportunities fail to be profitable?

More remote work, and hire outside of SV then. There's a pretty big benefit to keeping the dev teams in time zones with a good amount of overlap. Probably the second biggest factor in our difficulty getting good results from our dev teams in Hyderabad is the 12 hour offset. The single biggest is that if you go to India looking to save money, you're going to be in for some pain. Good talent has a cost no matter where in the world it is.

Wonder how long it takes for the company to move the entire/majority engineering team to India or Eastern Europe to avoid the time difference issues.

Time difference issues aren’t just between engineers. You have to deal with time difference issues between engineering and other areas of the business. (Like product)

There will be a very large lag time between ideation and solid implementation unless you have an extremely verbose product team.

A family member works in Inda from 3+ years as management / engineering in an Indian branch of an European company. The upper management thinks a worker is a worker, except in India they are cheaper. Pro-tip: it’s not. You get what you’re paying for. The local standard of professionalism is way from away of the Western one (baseline: Germany). An example: recruiting. Indians, because they live in a very competitive society, will have no shame ok cheating on certification and lie on résumé.

Normal Western approach: take everything at face value. Local background-aware people approach: understand everything as two-three level below what they are pretending. Not that they are not skilled workers, but you have to count for the lying inflation (e.g. 30% of Pakistanis fly pilots got their license thanks to someone else).

> Finally, there might be a lot going on right now, but why haven't companies outsourced sooner when there was nothing stopping them (even visas were easier to come by before Trump)? I believe they have contemplated it, and changed their minds for good reason.

Outsourcing to India is not trivial. It's a bit like outsourcing to China, where you _must_ have a deep understanding of the market and the players, so you don't get, well, duped. I have already gone through three different ventures where outsourcing to India didn't go too well, and it was commonly because the layer of management you end up dealing with, will say yes to whatever you ask them to do, regardless of time constraints or engineering talent.

Now, you made an interesting point regarding the current visa situation. See, I am myself a visa holder who came here from Europe, to work for a startup. The whole process was painfully hard. Even renewing the visa is a complex matter. Costs have gone up, and so have hurdles to get even the supposedly "easiest" kind of visa, which I believe must be a J1. My employer sure spent a lot of money on my L1.

It seems that some US engineers believe that their jobs are being "taken" from them by "unqualified", or "substandard", or "underpaid" immigrant engineers, and that getting a work permit in the US is something almost "trivial".

In reality, companies like Uber, Google, Microsoft, etc., will be shifting more jobs abroad, not because it is cheaper, as I think we must agree that the inherent complications of foreign teams may outweigh the potential savings, but because talent is _global_. And if they cannot have the required talent in home, they will surely look elsewhere.

It seems that some US engineers believe that their jobs are being "taken" from them by "unqualified", or "substandard", or "underpaid" immigrant engineers, and that getting a work permit in the US is something almost "trivial".

You(or others) may be getting mixed up between complaints of legal vs illegal immigration. Illegal immigration does tend to displace American workers for forms of manual labor like on farms, roofing, etc. Legal immigration like H1B tends to be gamed by large corporations to get cheaply paid workers for contacting companies. If talent was truly global, they wouldn't do this.

> You(or others) may be getting mixed up between complaints of legal vs illegal immigration. Illegal immigration does tend to displace American workers for forms of manual labor like on farms, roofing, etc.

Let's say that it is true, and that the US job market is larger for blue collar vs. white collar work seekers. Then one must ask why there isn't a ban on seasonal workers yet.

> Legal immigration like H1B tends to be gamed by large corporations to get cheaply paid workers for contacting companies.

That's not true. Large IT outsourcing companies, yes. FAANG, no. H1B salaries are publicly available, so it is easy to prove it.

> If talent was truly global, they wouldn't do this.

Quite literally the opposite. Since talent is global, there simply are good engineers everywhere, and bringing them to the US market is an advantage.

That depends. I work with great people in India, but they don't understand the US customers like I do, even though some have been with the company longer (this generalization is false in some cases, but overall it is true enough). As a result I can often make a good decision about some unclear requirement without asking for help, where they need to ask. Of course we are also trying to break into the India market and there it is the reverse, they understand the customer in India better than me.

We are now outsourcing development to Mexico, not only is it cheaper, but they are in similar timezones so if there is a question they can ask directly not send an email that they won't get a response to until the next day.