I think Google believes that it would not be able to maintain its competitive edge with lower quality, lower paid employees. Having worked there, I think they are right on that account. In fact it probably wouldn't even be able to function after a few years after people who don't know what they're doing totally screw up their monorepo and eng processes.

But there's another function to high pay: sucking the oxygen out of the atmosphere. They basically hire a significant chunk of systems (and nowadays also AI) programmers available in the industry, and keep them for as long as they like. Left to their own devices, those programmers would be able to start companies, or help Google's competitors compete with Google. As things stand, everyone else (including the likes of Microsoft) gets the folks who have failed the FAANG interviews. They still sometimes get good people, but not as good as to show them the way from the corners they've painted themselves into.

Where it all goes wrong though is when they actively attract "activists". From direct observation, few, if any, of those activists actually pull their weight once hired. In fact they often prevent others from focusing on their work, so their productivity contribution is often negative. They mostly spend their days on activism on the internal Google+ and do little else. You can actually see everyone's commits at Google, as well as graphs of how much code they contribute. When I was there, I'd check those dashboards from time to time only to confirm my suspicions, without fail.

> how?

How do we know that employees provide more value than their compensation? Because Google makes profit.

I would be willing to bet that the median employee at google is losing them money. This is true of all big companies.

> the gas station down the street makes profit

The gas station down the street isn't paying its employees six figure salaries. That employee might be making $7.25 an hour, which is the federal limit. Assuming 40 hours per week and 52 weeks per year (no time off!), that's 15k before taxes. Is that gas station clerk a better/more worthwhile person than a gas station clerk in timbuktu?

> Do you think that makes you worth more than someone else?

Getting paid more than someone else doesn't make you a better person than someone else. It just means you're earning more income, and that company is willing to pay you that income for any multitude of reasons. That's it.

Programmers can provide immense value to companies, and companies make handsome profits despite paying their engineers immense salaries. This also has to do with cost of living in some areas: chicago is more expensive than many places in the world, so if you want to base a company in chicago and pay someone who lives in chicago to work for you, you need more money. It's not rocket science.

I think many companies don't need to be based in SF or Seattle, etc, but that's another discussion.

When I say "value" in this context I'm just talking about money. I'm not making a moral value judgement about individuals or the company overall. All I'm saying is that employees are clearly creating more monetary value for the company than what they're being compensated.