Applied to software, the reason engineers aren't capturing most of that value is because all engineers are getting more productive. The benefit is accruing instead to those who employ engineers and those who use & purchase software. The exceptions are those fields where there are still significant barriers to entry and effective techniques are not widespread - isn't this why you want to become a data scientist?

I might buy that we're not in a salary bubble, but not for the reasons you propose. Rather, I'd say that the existence of a thriving market for startup founders is a market inefficiency. When engineers top out at $200K at a corporate job (and they don't always...I know some engineers with multi-million-$ stock grants) but can quit their job and instantly get millions in seed funding, that indicates that salaries should rise and seed funding availability should fall to bring those options back to equilibrium.

Small note: there will likely still be a risk premium for seed funding.

Thought experiment: isn't it _less_ risky to do your own thing with funding than stay in a corporate gig? I know a lot of people not very trusting of people who have stayed too long in BigCo emeritus positions, as they tend to think everything requires an intra-company social event before, during, and after work gets done.

I am... not sure that's true. But SF culture could get there very soon (assuming it's a social issue of who would want to hire you later -- I think you'd learn more from a startup, so it's not _only_ a social issue). Probably is already there for low-status technology use -- let's say PHP development? -- at giant corporations.

Because the productivity improvements required large amounts of capital in the form of land and equipment.

In most of the software world capital is not anywhere near as important as it is in other industries. The main input is labor.

I wonder what would have happened in the farming industry if land and equipment was free. I suspect the split of profits between employees and employers would be a lot more even.

No. I'm not saying that software engineers should earn $700,000+ or that any reasonable economic model would have them at that level-- because never in the history of economics has one's labor being worth something to the employer been, alone, enough to justify floating it to that rate. I'm only saying that their value to the businesses that employ them is at least that high.

Applied to software, the reason engineers aren't capturing most of that value is because all engineers are getting more productive. The benefit is accruing instead to those who employ engineers and those who use & purchase software.

Then it seems like software engineers should unionize or professionalize. If there's no other way for them to get even a small fraction of their value to the business, then collective action is the best approach.

Particularly, this article [1] about the perceived status of engineers vs. managers solidified my suspicions about the status hierarchies inherent to the industry.

1. http://michaelochurch.wordpress.com/2014/07/13/how-the-other...