This was a particularly interesting article. You had to spend some time to look through it to find some good take-aways.
- Physicians and dentists are not only a large number of the 1%, the proportion of dentists and physicians who become part of the 1% is extremely high - about 20% combined.
- I was struck by the seemingly high number of secretaries on the list. Yes, I know the chart represents "1% households", but this made me smile, since I figured it means a lot of powerful men are marrying their secretaries.
- For the ridiculous amounts of money that athletes seem to earn (and I don't have a problem with them earning that much), they are a very small share of the 1%, and the chances of a professional athlete becoming a 1%er is low too, only 2% of them.
- And since this is a tech/programmer site, the relatively low numbers of computer science/software people in the 1% seems to indicate that our chosen profession "tops out" at a certain income level below that 1%.
And since this is a tech/programmer site, the relatively low numbers of computer science/software people in the 1% seems to indicate that our chosen profession "tops out" at a certain income level below that 1%
This is an interesting point to take away. If you are smart and want to get rich, going into engineering is not your best bet. Same for scientists.
Most programmers who make it there would have to be entrepreneurial so I'm guessing they may get filed under a different "hat" so to speak such as management. Also, I'm guessing this is just based off yearly income so if someone cashed out with stock from an IPO but either sold it all at once years ago (and made a ton of money) or hasn't sold the stock yet I'm guessing it wouldn't be reflected on here. I think the paths that programmers take to reaching the 1% aren't well reflected in a chart like this so its hard to tell how many of these people "have been programmers" at some point.
Exactly. In 1999 was Bill Gates a "programmer" or a "manager" or (arguably) "investor"? I would say primarily a programmer who delegated, thus in a linguistic sense being a manager, but really still being in the first category for the purposes of this diagram.
Right, but at some point soon after he would most likely no longer have his job title be programmer thus removing him from that category on this list. Basically what I'm saying is the only people on this list who would fall under "programmer" and be in the 1% are those who are highly paid consultants, etc as even if one started their own company as a programmer (other than a services company where they just work as a consultant), at some point that title is going to most likely be changed to manager or investor and they would no longer fall under the programmer category even though programming is what got them to where they are.
Remember also that this is a table of household income, which means that you aren't even included unless you're married. It is seemingly fairly common for engineers to be "late bloomers" romantically and marry late, or not at all. By then, they're frequently in management anyway, and so they'd show up in the "manager" portion of the infographic.
I suspect that roughly 30% of the engineering population at Google is in the 1% (given what I know of salary scales and what fraction of engineers are at each eng level). That works out to maybe 4-5k engineers (assuming half the company is engineering), out of the 6,746 in "Computer & data processing services". You really think that Google accounts for 80% of the 1% in software developers? Where's Facebook and Twitter in there - them alone should push it over the count given?
No - what's happening is that most of those well-paid software engineers are single. Of the ones that aren't, many of them married college sweethearts who work as teachers or yoga instructors or urban planners or other professions that don't make a whole lot of money. One Google senior-SWE total comp will put you in the 1% as a single taxpayer, two of them will put you in the 1% as a household, but one of them plus a teacher's salary will not get you anywhere close to the 1%.
This is actually an interesting question: What fraction of the households in the top 1% are there because they have two salaries in the $150k-$200k range and what fraction are there because they have a single high earner? You're assuming that it's mostly the former, but it's not obvious to me why this should be the case, necessarily. It'd depend on salary distribution within various fields and across fields....
I haven't been able to find good data on individual income, sadly. At least in part because if one uses AGI then all you have to go with are tax returns and if a married couple files jointly the AGI will just be the joint number and that's that. But people also keep claiming this is "household" income, which doesn't quite match AGI in many cases (e.g. married-filing-separately situations, households which consist of taxpayers who are not married to each other, households with more than 2 taxpayers, etc).
I really wish the data-gathering methodology were actually spelled out somewhere. :(
The census data is reported separately - the 1% threshold for singles is $160K, probably skewed lower because they tend to be younger. If the infographic is based off census data, it excludes single-person households.
So if you are a single person making $160K, you are the 1%. If, later, you get married to someone making $30K you become the 99%, even though the paired earnings haven't changed.
Well, if there were actually shortages, then wages would increase until the "shortages" disappear.
This notion of "shortage" bugs me. There's two sides to a "shortage": supply and demand; but they meet at a point determined by price, where both are equal. There is always a "shortage": demand for engineers that isn't fulfilled by supply, because they can't afford to pay the engineers enough. But there is also always a "surplus": too many engineers to warrant high income levels in the 1%, etc.
A shortage would actually exist in a rigid market with inefficiencies, e.g. price fixing. To the degree that's not true, we don't have a shortage.
> "Well, if there were actually shortages, then wages would increase until the "shortages" disappear."
This is a common thought I see a lot on HN, but it's completely bollocks.
The elasticity of salary is not infinitely scalable, and is heavily based on the costs and profitability of the business. Say we took away all the taxi cab drivers in the world, demand would be immense and supply would be next to nil - in your fantasy world cab drivers would start making hojillions.
But of course, there is an upper bound to the value of a cab ride - cab fares would rise, but it won't not rise to astronomical levels simply because the cost will start exceeding the utility of the ride itself.
So yeah, in a shortage situation developer pay would rise - and rise they have, particularly in hotly-contested areas like the Bay, but this entitled attitude where "there's no shortage! I'm not making a million bucks a year yet!" is complete horseshit.
Cab rides have substitutes: your feet, mass transit, your own car (including the costs of parking), up to being carried around on a litter[1], which would be a very expensive. This limits the "hojillions" available to single cab drivers.
If there was 10x the supply of programmers, we could have 10x the number of jobs for them to do: they could be coming around to your house and offering to automate various bits and pieces of your life, they could be hanging around at traffic lights helping people stopped in cars optimize their phone usage, etc.
The profitability of the business is in part a function of its costs. That the business exists at all is based on an assumption of a certain level of costs, where at different costs other options may be more viable.
What I'm getting at is that there is a circularity in your objection. You assume things about the current state of supply and demand based on the current market mix of businesses, but the current market mix of businesses is the way it is in part because of the current state of supply and demand.
Yes, there is certainly a lack of elasticity in salary. The market isn't perfect. People aren't fungible. But the market is efficient enough to value e.g. doctors and lawyers quite highly. It simply doesn't value software engineers in the same way. That's just the way it is; I'm not saying it's right or wrong, and nor am I moaning about my wages (actually, I deliberately choose lower wages in return for more interesting work and flexibility in where I live).
What I am moaning about is people talking about an excess of supply or demand, like it's a plain fact.
In your example, the demand for cabs would decline. People would find other modes of transportation or not travel at all.
You are right that an engineer's pay can only go so high. However, when the rate exceeds what you can afford, you simply bow out and do something different. Hire someone who does not have talent or refrain from doing the work.
Ferraris exceed what I am willing to pay for an automobile, but you won't hear me complaining that there is a shortage of Ferraris. Instead, I will buy a lesser car (an unskilled worker) and make do, or forego car ownership altogether.
A shortage implies that all the money in the world can still not allow you to fulfill your needs. If the fulfillment is out there, but you are not willing to pay the prices, that is not a shortage.
I depends. Increasing wages might mean people work less hours, because they don't need overtime to pay the bills. And you won't see a lot of experienced applicants appear overnight, unless you can tempt retirees or career switchers back.
If doctors who realise they can work 9-5, and have lots of holidays, and still have a great standard of living, why should they work longer hours? It does actually happen.
Of coures the mainstream economic explanation is that if this was predictable, students will have been driven into courses before the shortage occurred (it's called "rational behavior", or "the assumption that everyone is smarter than an economist").
Someone above questioned shortage, but nobody seem to question the Want more money part. And here you come up with " a great standard of living, " but really I think people with much less may have a greater life, even if they have no car and no washing machines.
More money is generally better (up to a saturation point of about $100k a year). But if you are time poor, and cash rich, the choice should be easy.
Obviously, some people just like work, and money. Marx was right - people can accumulate cash simply for the sake of accumulating cash (or the security it brings), not just for pure consumption.
Innovation has positive externalities (unless it is patented, others can get it for free (roughly)). So, you can still have a major shortage even if supply/demand are meeting in the usual way. (what do you think the reaction to sputnik was about?)
Well, in a market with perfect information, enough people and organizations would organize to donate money to fund the innovations :) (actually, I think this could be a better model for funding certain types of innovation, e.g. drugs for particular diseases, than patents). Of course, the market doesn't have perfect information, so there is not a 100% certainty on the return on these potential innovations. We must therefore discount them. But they are still valuable; and companies still have R&D departments that do blue-sky research, and we also have government funded R&D. Which you could argue Sputnik and reaction was about. I think these are also market behaviours.
So why do you think there is still a shortage, when there is in fact funding for innovation? Do you think the returns would be worth more investment, diverted from other current investments? If so, you should be able to convince enough other people to fund it. If not, does that not prove the weakness of your argument? ;)
(I'm arguing this with a hat on. That is, I'm taking a position that's actually somewhat more extreme than my real position, to see how it feels. I'm actually opposed to the market in many cases, but not because of quibbling over supply and demand, but rather because it is amoral - not immoral, amoral - as in it has no moral content. There is no intrinsic fairness in it. It just is, a machine driven by people's consumption, without consideration for whether their tastes are right or wrong.)
The only way to really excel as engineer or scientist is to move out of the role into a position that is people oriented, like manager. Even if you choose the entrepreneurial route, it is not the engineering that pays the bills, it is the interacting with other people. If you want your business to be successful, you will have to eventually delegate out the engineering so that you can focus on building the business.
With that, if you are only driven by financial gains (as opposed to the love of doing), why would anyone bother with the science/engineering step when you can put all of your focus on people-oriented jobs from the start?
Eh, it depends. Would you rather have an 80 percent chance to make 75k per year, or a 10 percent chance to make 1 million per year? That's what I thought.
Engineering and software development are fields where you can consistently make very respectable wages. Risk aversion is a factor, after all...
Haha, guess I didn't account for selection bias. I just asked a risk aversion question to a group of people who are considering startups (and thus very risk-tolerant). Go figure!
I'm in Houston and I have to put some qualifications on that. Only CERTAIN petroleum engineers would make 1% kind of money. I would think the statistics would mirror software engineers roughly. Maybe a little better, maybe a little worse. Just nowhere even close to Dentists and Doctors.
Honestly, this is the thing that annoys me the most about the Occupy Wall Street slogan of "the 99% vs the 1%"; income is a power distribution and there really isn't a threshold you can step over and become rich.
Not that it really matters, since what catches fire politically is only modestly correlated with what is actually true.
Your point of view is kind of understandable in isolation... except, the slogan is a based on the economic fact that the vast majority of the wealth and income of the US is held by a mere 1% of its population.
The implications of that are many but the first and direct is that the US is a plutocracy. That is, the movement is not about (not) "becoming rich" or achieving the 1% (which as you imply would ultimately be a contradiction) ... It is about the nature and sustainability of such a society.
>> the proportion of dentists and physicians who become part of the 1% is extremely high
As implied in another comment, this is cloudy because the New York Times has a hard time with the difference between "income" and "wealth".
If a doctor borrows $150K for their education, and borrows $850K to start a practice (for building, equipment, supplies, insurance, and working capital), they may have a very small (or negative) net worth with a million dollars of debt.
It takes quite a number of years at $400K of household income to pay off a million dollar debt. And during all those years, this example doctor would, according to this chart, be in the top 1%, even though their net worth might be miniscule.
"And since this is a tech/programmer site, the relatively low numbers of computer science/software people in the 1% seems to indicate that our chosen profession "tops out" at a certain income level below that 1%."
That could be misleading. A technical founder/co-founder of a very successful company would likely end up being categorized as a "manager". Bill Gates and Steve Jobs almost certainly would be classified as such and not as "cs/software" people.
Re: Secretaries - Or hiring their partner to be their secretary, although the partnership likely makes sense if they get along that well (co-founders in a way)
I wonder where in the 1% those doctors and lawyers fall? You only need to make $350k to be considered "1%", but then it goes all the way up to Zuckerberg/Gates/Buffett levels. It's the 0.1% who are the millionaires and billionaires.
- Physicians and dentists are not only a large number of the 1%, the proportion of dentists and physicians who become part of the 1% is extremely high - about 20% combined.
- I was struck by the seemingly high number of secretaries on the list. Yes, I know the chart represents "1% households", but this made me smile, since I figured it means a lot of powerful men are marrying their secretaries.
- For the ridiculous amounts of money that athletes seem to earn (and I don't have a problem with them earning that much), they are a very small share of the 1%, and the chances of a professional athlete becoming a 1%er is low too, only 2% of them.
- And since this is a tech/programmer site, the relatively low numbers of computer science/software people in the 1% seems to indicate that our chosen profession "tops out" at a certain income level below that 1%.