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Comment by econo_girl | Hacker News Reader

I think this really comes down to basic economics. Talking about a "shortage" of something is equivalent to saying the market isn't clearing: that there's more demand than supply. And having more demand than supply is equivalent to the price being too low. Salaries for developers, inflation-adjusted, have remained essentially the same since the dot-com boom. Meanwhile, salaries for bankers and consultants and lawyers have exploded. The results of this should be obvious.

You guys want people to major in computer science? Pay them to. I'm sure that the DoD and Google and Microsoft would all like to hire top people for $50,000 a year. But that isn't the way markets work. If I want a Ferrari, I can't refuse to pay more than $10,000, and then complain about a "Ferrari shortage" because no one will sell me one at that price.

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Yeah, I don't have data to back this, but my gut tells me that big software companies' consumer surplus on payroll is significantly higher than it is in other knowledge industries, i.e. Microsoft/Google/etc. aren't paying you nearly as much as they'd be willing to.

I think that's part of the reason talent acquisitions are becoming increasingly common -- you can't just pay new hires 50-200% more than what everyone around them is making, because that would infuriate existing employees. But if you pay them that same figure via a talent acquisition, none of your current employees will care much because they can mentally file it under "special cases".

There's an implicit "smart & passionate" qualifier on the title of the article. There's a shortage of smart and passionate geeks. It's not about cramming more people into the Computer Science pipeline. That will make absolutely no impact on the actual problem.

The principles of supply and demand apply just as much to the market for "smart and passionate labor" as "all labor". If demand exceeds supply, the price is too low.

Even if you assumed that the ability to program was purely the result of some genetic mutation, so that there were X programmers in the world and there could never ever be any more, there still wouldn't be a shortage if prices rose enough - because there would be less demand. If each programmer had to be paid twice as much, companies would hire fewer programmers, and there wouldn't be a shortage.

I was mainly responding to the, "Pay people to go to college for CS" statement.

My point: Disqus has been hiring for QUITE a while, very vigorously. I know for certain they are getting a ton of applications. I'm really quite sure they're offering market value for the kind of talent they're looking for. So, what's the problem?

I'd wager they're having trouble finding people talented enough and who make a good culture fit.

Then again, when I think programming I don't think cubicle-wage-slave cranking out Java or something. I guess you could quadruple the number of code monkeys in the world to fill all THOSE positions. I wouldn't want to work with the people who came out of that factory, though.

> I'm really quite sure they're offering market value for the kind of talent they're looking for. So, what's the problem?

The OP seems to suggest that offering _significantly above_ the market value would be the solution.

If you were a smart and talented computer programmer and you saw a headline on HN, "Disqus doubles salaries, and still looking to hire", you might be more inclined to check them out than if they were just offering market rates.

A weird thing about programmers is that they aren't used up when they are bought. They aren't consumed. There is just a minimum benefit that needs to be perceived before it becomes worthwhile to switch from that well-paying and comfortable job.

If you're having a shortage, double your salary/benefits. It should get you a lot more interest from talented people who might otherwise be off the market to you.

Paying above market salaries is also a slippery slope. If your salaries are too high, you can send the wrong message about the quality of the work environment.

I live in Dallas and over here the shops that pay a lot tend to overwork you, they have mostly uninteresting problems, and they use outdated technical environments. For them, the high salary just helps them slap on the golden handcuffs.

Aren't they by definition not offering market value if they're having a hard time finding people?

No.

> The principles of supply and demand apply just as much to the market for "smart and passionate labor" as "all labor".

The supply and demand curves can be proven to have an intersection under the assumption that they're monotonic in different directions. But with regard to "smart and passionate labor", that assumption is flawed. Offering people more money for labor doesn't necessarily enable more of them to become passionate about it. So it's entirely possible for the market to fail to clear.

That's not what's happening now, of course.

You are assuming that most people follow their passion, disregarding the economic aspect.

PS: what about the smart and passionate people interested in cs that choose another career because of the perceived social and economic status?

Whenever I read "smart & passionate," I see "smart & willing to work for less."

Demanding equitable compensation falls under the rubric of "smart." If you're willing to work for pay below market value, you're not smart, therefore don't meet the "smart and passionate" condition.

If we follow that reasoning, all early-stage startups are screwed since they don't have any smart people working for them!

Nah, they're working for so little with the promise of big dividends down the road.

They still have to be okay with the significant probability that they end up having worked below market value. Many of the smart people I know working at startups are perfectly okay with this because they love what they're doing and the potential big dividends is just a really nice bonus.

It would be really hard for me, in the current stage of my career, to justify working for a startup unless I knew the expectation value of the returns aren't at least comparable to traditional jobs. The investment money wouldn't be there either.

I wouldn't really be a smart rational economic actor if I hadn't judged it to be profitable over my other options, though I admit there is more to it than just money.

That assumes that the market price is the same (as it would be with e.g. milk).

In this case, part of the salary is your working environment which would be significantly better in a start up.

Maybe they just want more people to go into STEM so their price will drop.

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