Welcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Opportunity Costs of Technical Talent: Intuition and (Simple) Implications, published by Ozzie Gooen on November 19, 2021 on The Effective Altruism Forum.
TLDR
Strong technical talent has very high opportunity costs right now
Therefore, technical nonprofit projects need to do one of:
Create very large amounts of value per person
Find ways of usefully using people with low opportunity costs
These basic principles also apply to other areas
Meta
Epistemic Status. I've known this area for a while and am speaking from experience. This post is mainly to attempt to convey intuitions. If you want to know more about the specifics of (high) salaries in the tech sector, there's a lot of other materials out there.
Facebook Thread. An early version of this was written as a Facebook post. That post features some relevant comments.
Personal Take. I've been struggling to figure out how to best express these ideas. I think these metaphors will be useful to some, but get in the way for others. I think the ideas are useful. I wish the flow were better, but the opportunity cost of improving it further seemed too high.
Ambitious Software Engineering Efforts. This is on the same topic as the previous post, but the style is very different.
Updates. 6PM Nov 19: I changed the title from The Dreaded Beast Who Gobbles Up Technical Talent, after feeling sort of awkward about it and noticing the post seemed to be getting some downvotes.
The Horror
Software products take almost absurd amounts of labor and talent. The world has far fewer people capable of implementing these services than it does potentially useful services to be implemented. Market forces mean that the absolute most profitable sectors are eating up the big bulk of these capabilities, and everyone else gets the scraps.
Startup valuations are sky-high right now. Tech salaries are increasing. Recruiters are looming.
These bring a ton of pressure to non-elite employers.
It feels like a nefarious beast that eats up anyone who gets to be too good or makes loud noises.,_Ancient_Slime
Employers are like horror movie civilians. Hiding in corners. Trying to keep hires who won't attract the hoard. If anyone gets too experienced, they'll be noticed. Maybe if they provide some work-from-home or extra vocational benefits, they can mitigate damage this year.
It's like a chopping block that destroys (from the employer's view) anything that clears a nebulous bar.
Or a swarm of locusts that comes intermittently and eats up all of the promising opportunities and leaves dust in its path.
It's terrifying, and it's a constant worry.
Sometimes this effect is called Creative Destruction. [1] Creative Destruction sounds like accountant jargon for a minor inconvenience, not like a terror that devastates ambitious efforts.
Is Good Management a Solution?
One common criticism to the above complaints is something like,
"You just need to have great management. If you can inspire programmers, provide great working conditions, and find really ideal projects that provide solid returns.
I agree that if you have great management, you can greatly reduce the problems here.
SpaceX and Tesla are both interesting examples. I went to college in Engineering at Harvey Mudd (graduating in 2012), close to LA (roughly near both companies), and have friends who went to both companies. Pay was surprisingly low at both. Hours were often incredibly high, and the working environments seemed highly stressful. People seemed to work there due to a combination of company vision, ambition, professional status, and interest.
Few companies can figure out how to replicate these conditions. Elon Musk figured out how to, and now he's worth over $250 Billion.
So, if you are the next Elon Musk, you can probably make it work. You can outcompete the rest of the market at converting labor into ec...