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Comment by blocked_again | Hacker News Reader

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.

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>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?

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.

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