Comment by dragonwriter
2 days ago
The charts show software dev gaining more jobs under the COVID demand and stimulus swing, and then losing more as those went away and monetary policy got tighter than even it had been even before the COVID stimulus.
The easiest explanation for the whole chart is "Software dev is more reactive to the monetary policy environment than most other industries, because more of it is funded by new capital investment -- whether VC money or otherwise -- instead of ongoing operations of stable firms compared to most other industries."
Trying to add other explanations is fun, but there's not a lot of evidence for any of them, or even that more explanations are needed.
How are sec 175 changes in the US not also a top explanation? This has a massive cost to small businesses and startups trying to hire software engineers, and a big impact to any team trying to grow.
Because the data doesn't match. The author addresses this in his blog post -- essentially every country has the same graph of SWE jobs, but only the US has sec 175.
Big tech layoffs were a global issue and U.S. tech firms hire (and fire) globally. So like it or not, U.S. economic issues have a downstream impact around the world.
Sec 175 especially hurt small to mid-size tech companies (especially fast growing ones...) which I imagine amplified the problem across the board.
> How are sec 175 changes in the US not also a top explanation?
You mean the change from deductible as a current expense to five-year amortization under changes to Sec 174? In an easy money situation, the way it increases tax liability in year one while decreasing in year 2-5 is not a big deal, it becomes more of an issue as the cost of financing goes up, so the main effect is to increase the already-high sensitivity of software development to tightening credit.
Or, to put it in another way, the amplitude of the pork cycle (https://en.wikipedia.org/wiki/Pork_cycle) is higher for software developers than for other jobs.
I had not heard of the pork cycle and thought this was going to be about the factoid that the McRib only exists when pork is cheap.
... partly because it's quicker to get started with software projects?
No expensive machines or lab equipment, sometimes not even office space needed, just people with laptops
But the cycle wave length should ... Be similar to how many years people spend studying? That doesn't seem to be the case here?
Quoting the Wikipedia link:
"high salaries in a particular sector lead to an increased number of students studying the relevant subject; when these students enter the job market at the same time after several years of studying, their job prospects and salaries are much worse due to the new surplus of applicants."
Maybe you could say it's related to investors' pork cycle (of different/unknown wavelength) not students' pork cycle :-)
Or maybe just one-time opportunism: low interest rates etc
I tend to agree with you, if only because the swing in Europe on the IT job market has had less amplitude and is more spread out, similar to the difference in stimulus policy.
Zurich IT market died after COVID. Not sure about other hubs.
It died after Google announced layoffs.
The local IT market is quite small and Google is a very large employer here.
Two things had happened then:
1. Other companies froze hiring, because they got scared of „what does FAANG know that we don’t that they’re reducing employment” - no other reason really
2. A few hundred of pretty good Google engineers flooded the small market.
2023 was very rough, things got much better since then though.
Paris market is also dead, only Datadog (and few others) are still recruiting
The most likely explanation is fraud
Kind of makes you wonder what percentage of software devs are actually working the famed "bullshit jobs"?
I believe many software tools work like a vice for beurocrats making the beurocracy way less efficient.
Like, forcing some not very edge case friendly set of text field validation rules onto the beurocrats such that he can't just do what he tries to do as he could with paper work.
In many orgs. nowadays the processes seem to be made to fit the computer programs not the needs of the beurocracy.
That seems a little backwards. I'm not sure exactly what you mean with making bureaucracy less efficient, but form validation is an example of automated, technologically enforced bureaucracy - in some sense, it's a more efficient form of bureaucracy. It's certainly less flexible, but lack of flexibility is arguably the point of bureaucracy; less flexibility suggests more rather than less efficient bureaucracy.
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And even if they produce "real" products. How many of them are needed. How many of them are redoing the same thing. And how many could in perfect world be done more efficiently by resusing some common solution.
Jobs funded by speculative investment that are highly sensitive to monetary policy are pretty orthogonal to the kind of thing addressed by "bullshit jobs" theory. They may be societally harmful or low-social-value more often than other jobs, but generally for very different reasons than bullshit jobs. They are "lottery ticket" jobs, where many are wasted, some are very valuable, and its hard to predict in advance which are which (for investor value; for various reasons endemic to capitalism more generally, this is a very imperfect proxy for social value, but that problem is also mostly orthogonal to the kind off harmful job "bullshit jobs" addresses.)
By the time our work hits stable/ongoing operations, it's well on the path to outsourcing
... to begin the loop again