The pay level still isn’t high enough. Minimum pay of about 170k in San Jose for a software engineer? That’s not a specialist, that’s average for a small startup.
Graduate salaries are starting to push high 30's!
The other thing to take in to account with the US figures - taxation. I believe the US tax system taxes the individual directly, where as in the UK we are generally PAYE and taxed at the point we are paid our salary. Maybe someone in the US can confirm that?
I've lived in the US. Your taxes are withheld from your pay. Unlike in the UK, everyone has to fill in a tax return - even if all of their income comes from a regular job. You might be due a small refund or owe a small amount at the end of each tax year, but fundamentally you're taxed as you go throughout the year.
Note that is VERY individual circumstances specific. The largest chunk of that missing $70,000 went to taxes at the local, state, and federal level. Easily $45,000 of it is gone in taxes. There is also a common game of moving pre tax dollars around that benefit you, but not exactly the same way a dollar in hand would.
The two most common are 401ks (typically 4-8% of gross depending on employee matching) which is money that goes into a retirement account for you and you can't touch it until you are old (55 or 65 or something, not up to date on the numbers there) without incurring both a significant penalty of 10% but also having to pay tax on it the year you withdrawal it. There are a few hardship exclusions like medical, first time home buying etc, where you can dip into this untaxed pool of money but for the most part can't touch it until retirement.
The other common pre tax exclusion is an HSA where you get to put pre taxed dollars into an account that can only be used to pay for medical expenses. Essentially every high dollar professional in America takes full advantage of this offering as we all expect to have out of pocket medical expenses and it makes no sense to pay them with taxed dollars instead of pre taxed dollars.
Not really. HSAs are common for sure, but people with high incomes often can afford lower deductible policies. You can't open an HSA unless you have a high-deductible health insurance policy.
I've done it both ways, and I personally prefer paying more for a better insurance policy and not having to bother with HSA paperwork.
It's the same in the US, so salary figures are directly comparable (after currency conversion).
Taxes are lower in the US, but healthcare costs are much higher and it roughly balances out.
But of course, that demand drives up salaries across the entire USA to some degree.
Boston, Seattle, and New York would instantly qualify.
Some might say Denver and LA as well as many others would have plenty of well paid developers.
Product managers are making 80-100% of what a software engineer makes. So 150-200k even at startups, and upwards from there at FANG.
Graphic designers are making 70-100%.
Even roles like "Human Resources Manager" are making 150k, because they're automatically "management", even though it's just a Bachelor's degree in Business and not a highly competitive role.
"Business analysts" (Excel and specialty tool power users) are making 100k+. No hard STEM degree or brutal interviews required.
However, it really is just in a handful of major US tech hubs that the pay is this high in tech. Outside the major tech hubs the high paying professions are the traditional ones... doctor, dentist, lawyer, etc.
If they are, there's nothing wrong with this situation.
Auckland is pretty expensive, and senior engineers here make a lot more than regular 9-5 jobs but I'm not remotely close to clearing that much money in a given year.
You could go to Uber's Pittsburgh office and have a lot of money.... but you'd be in Pittsburgh...
If you don't care about quality of life - there are great options world wide to make a lot of money. I would suggest getting into corruption, as an easy way of making millions fast.
I just don't think that's true. For two reasons:
1) I earn the equivalent of just under the median household income on my own, and 100% of my income is eaten by our expenses. It's really my wife's income that's left over after all that has been paid for, so none of mine is spare.
2) There must be hundreds of thousands of people who live in the bay area that don't work at FAANG and don't make anywhere near that, but still manage to live on the city somehow. It's not like if you make $360k you're barely scaping by, right!? Else basically everyone else would be homeless there.
I ran the numbers and I'd be able to save a lot more.
If you have the fiscal responsibility and live a completely ascetic lifestyle - you can easily save most of your free cash flow. But that is an extraordinary person.
If you are a reasonable person and are going to actually live in SF - you have to adjust your expenses accordingly. Your rent/mortgage, your shopping trips, your recreational activities, etc... and you realise that your social outing costs you $200, instead of $30... and you don't have the ability to host it at home, because all of your friends live 2-4 hours away or you have a $5000 p/m home in a convenient location.
The reason why I say this - I lived in Helsinki, Dublin, London, NYC, San Francisco, Palo Alto and back to NYC. Me and my husband are both SWE, well paid. I literally went through the change of attitudes towards "living a life".
I'm under no impression the lifestyle would be the same. Just that it ought to be possible from what I can tell. Where I live in my home country I'm optimizing for a reasonable level of comfort / quality of life. If I'm dragging myself halfway across the world for the top salaries in the industry, I'm not optimizing for comfort or quality of life, I'm optimizing for as much savings as possible over a short duration.
Also - if you're "dragging myself halfway across the world", it limits your ability to optimise efficiently. You don't have an easy fallback. (I'm from Lithuania and live in NYC. Optimising my living arrangements was not a possibility for a long time, because there's no family or LPR status)
AWS is spinning up a dev team in Auckland though teaming up with Vector on some IOT stuff in the energy space apparently though. I would hope the comp for those positions would be at least $140k NZD, but still that's nowhere near what the fellas over at Google HQ are making for writing protobufs all day.
Globally it's the hotspots that pay a lot - London, Dublin, Moscow, Amsterdam, etc.
But then the reason why the salaries have skyrocketed - is just lack of supply.
I'm planning on leaving the field at 36 already. Moving to doing gardening work and running an olive grove... and there's no one that can replace me in NYC at a snap of their fingers. I bet there are people globally, but getting to work in US is a PITA.
What country would be number two? I bet there would be a spirited argument.
Maybe something like upper 2% of salaries in the county.
A fixed number will never be appropriate for all the areas in the US, and a fixed number will always need to be adapted.
[1] https://wallethacks.com/average-median-income-in-america/
The truth is, though, that folks getting paid well in Indiana can generally live better on the lower wage simply because things are that much cheaper. Perhaps you wish to subsidize living in the more expensive areas and increase the safety net?
Maybe you should place some pressure on companies to move headquarters into more affordable places. Lots of places have international airports, after all, so that shouldn't hinder folks much.
Do you think your representatives gives two farts about what folks in a different part of the country are paid so long as folks in his or her district are living well enough? Or should folks in the area living well be enough of a concern?
Do you have solutions for these things that are fair to the folks needing to live in the expensive areas (poor folks have little to no choice in the matter)?
Silicon Valley is a statistical outlier compared to the US as a whole for salaries and for cost-of-living.
Most of the software engineers in the US don’t work in a place with $170k salaries and $1m+ homes. For most of the US, salaries are 1/2 of that and homes are 1/4 of that.
An extra $100k would have been really nice.
Of course housing costs have gone up significantly relative to pay in the past decade, so who knows.
Point is, by international standards, USD $170k is a very high salary for software engineers too, even for a specialist.
SWE is highly paid throughout the world, but I have noticed there are some geographic areas where it actually doesn't seem to command a higher salary than average.
If the labor pool shrinks a bit, their negotiating power will rise and this will solve itself.
I feel that it is safe to say that in different companies, a developer produces different value for the company. For someone working at a Big Tech company, a single developer - even a low level one - can produce substantial value for the company. On the other hand, working at a small company, the entire company may not have as much revenue as the low level developer produced at the Big Tech company.
Should a developer at a small company that is... say... optimizing routes for auto parts delivery for a handful of clients be compensated at the same "market price" as someone who is working on optimizing AWS?
My point is that not every company - even in the Bay Area - can afford to pay "market rate" for everyone.
Its not that the labor market doesn't value the skills, it's that the labor produced isn't worth the same. I believe that it is foolish for a software developer who to expect the wages of someone who is working in Big Tech at all other companies (and it would be foolish for the company to pay an employee more than the value that they're creating for the company).
If you're incredibly good, you might be able to negotiate 20-40% higher offer than the initial offer, but beyond that they'll just reject you and go with another candidate who might literally be worth millions of dollars less and be a ridiculously worse deal.
Engineering management is simply not operating according to standard economics textbook definitions of rationality. It feels more like cartel economics.
So your assuming that being a good little Ragged-Trousered Philanthropist" is a good idea, and we should touch our caps to the software mill owner.