I never realized exactly how devastating anti-aircraft rounds were to a bomber.1

Via Emily Bazelon at Slate:

The chances you’ll be audited rises with your income bracket. Dennis Ventry, a law professor at the University of California at Davis, read me the numbers: The overall audit rate is about 1 percent. For incomes of over $1 million, it jumps to 9 percent, and for incomes above $10 million, it goes all the way to 27 percent.

I took my last exam in college today. Decades of exams, most of them going quite well, and I still get pre-exam jitters. I wanted to quantify that nervousness, so I captured a bit of heart-rate data. Lots of confounds exist (coffee, walking to the exam room, etc.) but it’s still a cute picture into my nerves.

I’ve given dozens or even hundreds of public speaking performances in my life, and my hands still shake. I don’t hold notes because they magnify the tremors, and everyone can see the paper jiggle with my adrenaline. Despite decades of repetition, some things stay exciting.

From Bay Area Quarter Life.

Are Bitcoins a stable long term solution to the problem of currency? What are the advantages and disadvantages inherent in their technology? How does the bad news about global PC sales affect Microsoft, and what’s an appropriate response? These questions and more discussed by your hosts.

Nitwits and Nitpicks, Episode 9

Facebook Home, the new interface for Android, is announced. We pick apart its strategy implications, its product features, and it’s brilliance. Max declares it the most important revolution in mobile user interfaces since the 2007 iPhone. Kartik rags on iOS notifications’ weaknesses.

Nitwits and Nitpicks, Episode 8

Who’s going to be excited about a Facebook phone? Does T-Mobile’s new “uncarrier” unsubsidized strategy represent a real market upset, and how will the market change? Kartik ponders Apple’s 2013 release cycle, and Max has wild fantasies about commodity cellular carriers.

Nitwits and Nitpicks, Episode 7

Michael Halligan, senior engineer, has a different perspective than me:

The team at the YCombinator company seemed awesome. I really enjoyed meeting them, I have nothing but respect and admiration for them. They’re smart mother-fuckers. Their product means nothing to me, it’s not going to change the world, but that’s OK, neither company is going to change the world. All start-ups today are about supporting advertising in one way or another. If I truly believed in a company, I would work for $100k/year with no benefits and as much stock as I could get. I haven’t believed in any company I’ve worked for since Napster.

I hope I won’t be that bitter after two decades.

Glenn Kelman, CEO of Redfin, sees something wrong with today’s generation of software engineers:

[H]ow many engineers hired from Stanford or Berkeley in the past year will ever feel the savage need to make something happen, to bust out of the matrix, to push the limits of their abilities?

The problem is that the young engineers earning that much become well-fed farm animals at the very moment in their lives when they should be running like wild horses. Many now remind me of middle-aged men, collecting expensive Scotch or taking up John-Kerry hobbies like kite-surfing and racecar-driving at the age of 24.

Kelman reasons that starting salaries of $100,000 a year make the young lazy. “[T]he only way to get much better at your craft is to be challenged in ways that make you uncomfortable. Yet not many people in high technology are uncomfortable these days.”

Recalling his starting salary, Kelman believes that he worked hard because he needed money: “I took on the challenges [my boss] gave me for many reasons, but the inescapable one was that I needed a raise.”

This is an article about me and my friends. My peers are the young engineers that Kelman calls well-fed farm animals. We are taking jobs that put us in the top 10% of American incomes, straight out of college. We compare 401k plans, office cafeterias, and equity options. If Kelman is right, I should be afraid. If Kelman is right, I will shy away from challenges, fail to grow my abilities, and become rapidly boring. That’s a future that should scare any ambitious 21-year-old.

Can I answer Kelman’s question: is my future salary making me lazy?

Productivity for the Salaried

In “Six Dangerous Myths about Pay” (Harvard Business Review), Jeffery Pfeffer distinguishes employee pay with employee productivity. A higher paid employee may be a cheaper option for a company, if it leads to higher productivity. It’s well known around Yale that industries with high pay like banking have correspondingly preposterous hours. A day that starts at 9am and ends at 2am isn’t unreasonable for college hires in banking. The unending pool of applicants offsets high burnout rates.

In the software industry, 40 hour weeks aren’t the expectation— they’re the minimum. Free food and office nap rooms aren’t an invitation to be lazy. They’re a reason to never go home. Even the best factory workers are rarely an order of magnitude more efficient than the average. Not so in software. Joel Spolsky of Fog Creek Software: “I don’t think it’s a stretch to believe this data shows 5:1 or 10:1 productivity differences between programmers.” Sometimes, your laziest software developers are your most productive ones.

I think there’s a very reasonable (and self-interested) point to be made for 40 hour weeks. Sara Robinson, in “Bring Back the 40 hour work week”, argues 40 hours optimizes output. But Kelman’s claim, that these highly salaried engineers are now lazy, seems unsubstantiated from a work hours point of view. From the employer’s perspective, high pay and long hours is the efficient and rational choice as well, since hiring dozens of middling programmers for 40-hour weeks at much lower pay would be less productive than paying one highly skilled person outrageously.

Income’s Diminishing Returns

As Kelman notes, Redfin offers a competitive salary with its peers. (Meaning, to Kelman, Redfin’s engineers are equally well-fed) While pay does vary across the industry, it’s safe to say few are poorly compensated. And if we know one thing about money in behavioral economics, it is that each additional dollar is worth less than the previous one (Seriously, this idea originates in 1738). $25,000 a year to $50,000 a year is a salary jump that most people would leap at even for a less pleasant job. $100,000 to $125,000 for a worse team, a worse product, at a worse company is the kind of thing many of my friends wouldn’t trade for. With somewhat similar (and very high) salaries across the industry, employees aren’t price shopping. Instead, they’re choosing jobs for how interesting the work is, and how exciting and impactful they can be. I’m not sure if that’s more or less lazy of a choice, but it’s certainly a better way to pick a job— doesn’t everyone wish they could be income indifferent, and just do the thing they want to work on? That way, the work itself becomes your inspiration.

Money, Destroyer of Creativity?

Inconveniently, psychology doesn’t have a canonical answer for “does increased reward decrease creativity?” Rewards come in many different forms, and different kinds of challenges require different kinds of creativity. But I think we can say that for most humans, money interferes with creativity and intrinsic motivation. In two papers each cited thousands of times, Edward Deci and Lepper, Greene, and Nisbett demonstrate that intrinsic motivation is diminished by direct rewards. Lepper, Greene, and Nisbett also indicate that work done for pay rather than intrinsic desires was judged to be lower in quality. In 1962, Glucksberg performed Duncker’s Candle problem, offering a reward to motivate one group of subjects and no reward to the other. When the solution wasn’t obvious, the group offered a reward found their performance impaired. Muller, Melwani, and Goncalo also demonstrated that uncertainty leads people to be less creative. Needing a raise from your boss makes you uncertain, and discourages creativity because you’ll rule out the ballsy creative ideas.

Kelman took on challenges because he needed a raise, but for most people, the work they produce when they don’t need a raise is superior in its creativity, quality, and intrinsic satisfaction.

Motivation and Means

I can’t speak for every engineer out there, but I see my high pay as a means to break out of the rat race. My pay will permit me to make decisions indifferent to money— a powerful and qualitative change in personal psychology that I look forward to. Life is for living, not for grubbing out incremental raises based on artificial hoops built by my manager. I don’t plan on resting at any point in the next decade, but I do hope for serious changes in the ways I prioritize my time, moving gradually from learning as much as fast as possible towards picking a big, and seemingly impossible problem and designing a way to solve it with software.

Unlike Kelman, I won’t take the challenges offered by my boss because I need a raise. I’ll take them because I want to see them done, and to see the world change even just a bit. I’ll work hard because working hard is necessary to feel accomplished and satisfied. And if those challenges don’t keep me interested— if the world isn’t changing as fast as I need it to— I can give up my well-fed salary without fear of starvation, and go make my own dent in the universe without sacrificing my health or sanity.