Programming is a field where quantifying worker output is prohibitively difficult, but ranking workers is relatively easy. As such, it's a prime candidate for Tournament Theory - instead of measuring worker output, do some kind of informal rank-ordering and hand out larger prizes to the winners.
Being employed as a professional programmer in any capacity is winning the first round of such tournament. The compensation spread between this and the next-best non-tech option has to be high enough to induce people to invest in learning the difficult skills and risk the ordeal-based hiring tournament.
Efficiency wages also come into play here. When wages are higher than what's necessary to clear the market, people struggle to find new jobs, which both reduces turnover and makes employees more willing to put in discretionary effort.
Some combination of the two is likely responsible for outsized wages in the field. Efficiency wages is probably more the case for entry-level FAANG salary, tournament for the large jump over the first couple major promotions.
Quantifying worker output being prohibitively difficult means rankings are not easy at all. In big corps the top ranking is given based on things like knowing the right people and taking credit for other peoples work. At least there is some fairness in the industry via standardized leetcode interviews.
Being employed as a professional programmer in any capacity is winning the first round of such tournament. The compensation spread between this and the next-best non-tech option has to be high enough to induce people to invest in learning the difficult skills and risk the ordeal-based hiring tournament.
Efficiency wages also come into play here. When wages are higher than what's necessary to clear the market, people struggle to find new jobs, which both reduces turnover and makes employees more willing to put in discretionary effort.
Some combination of the two is likely responsible for outsized wages in the field. Efficiency wages is probably more the case for entry-level FAANG salary, tournament for the large jump over the first couple major promotions.