If Tech Is So Important, Why Are IT Wages Flat?
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Seriously: massive expansion of the field disproportionately among younger workers, who bring the average down, is totally consistent with wages increasing for the vast majority of workers considered individually.
There's also some weird effects at the top of the scale. Half of the HN leaderboard is people who you'd consider technologists, but many of them (us?) don't count as it for statistical purposes. This disproportionately excludes from the comparison people who are older, at their peak earning years, and/or those who took advantage of many of the (numerous) options which are a bit more lucrative than System Administrator II at an insurance company.
2) Outsourcing.
As you alluded above, I too think the statistic presented mostly captures IT workers 'proper': server administrators and support people. But as a support function, they've basically stopped having major gains in productivity in like 1998.
We're not like them. We're princes of the universe who own the means of our production. Instead, I think it's more along the lines of
1) a lot of wealth increase has been captured by the higher skilled workers (some with cause, some without) and, of course, equity owners
2) but mostly, average wealth economy wide has been stagnant for everyone in all jobs except non-executives/equity owners.
You can make six figures before you're thirty. No problem. It's very common within my social milieu.
-- 1. Obviously a white paper designed to help lobby against increased immigration quotas. As an incumbent, this benefits me but the initial claim that 3.7% unemployment doesn't constitute full-employment is so spurious that it's hard to take any of the rest of it seriously.
this could also be seen as a market at equilibrium, so the bargaining power is already accounted for.
Yes. People just don't realise it.
EPI concerns themselves with the very broad category "computer and mathematical occupations, workers with at least a bachelor’s degree". If you dig into the underlying BLS report (http://www.bls.gov/oes/current/oes150000.htm), this category includes "Actuaries" and "Mathematicians", and includes 11% of all workers in the 'Insurance Carriers' industry.
Still, a rise in real wages over the past 11 years, when many other occupations are flat or declining, isn't that bad... especially if the composition of this category has grown to include more young workers and career-changers. Sometimes expanded demand, if filled with more marginally-qualified workers, brings down average wages, because workers are not uniform interchangeable cogs. (Consider similarly: English is spoken worldwide more than ever before, but the vocabulary/skill of the average English speaker has likely gone down, because so often it is a second language.)
I work in London for £31k ($50k), doing computer vision computer graphics (GLSL) and the occasional ML development. Mostly in C++ or Python. My rent for a 1 bedroom apartment is £1000/month ($1.6k/month) (the cost of which I thankfully share with my girlfriend).
Honestly, it's a constant struggle just getting by. Looking at the salaries offered on the job market, I don't think I'm the only one. Yet the demand appears to be high. I've seen job posts up for months on end on Linkedin. Every Hacker News meetup I've been to, almost everyone presenting is desperate for new hires.
How have we ended up with such a huge difference with respect to SF? I'm sure other jobs would be much more closely matched across the pond.
I also wonder about the high difference in pay comparing SF to anywhere else. It's interesting how much geography still pays a big role in a supposedly 'flat' interconnected world, especially in job types that could easily be done remotely. I guess the 'flat' world is a myth up there with other modern myths such as 'meritocracy' :-)
I always imagined the future as moving somewhere where land is cheap, buy a house with plot of land, and then work remotely. No commuting, no busy office crap. But it's still very hard to do, even programmer jobs seem to all (well, mostly) require sitting your ass on a chair at a specific place. Usually in a city where it's expensive to live.
There does seem to be a propensity for "bums on seats" management style, and although I agree with the value of face-to-face communication there must be some middle ground which is beneficial for everyone. I guess it's hard to pay for an employee that you never see (even if you do see their work).
Then again we live in times with high bandwidth connections to almost everywhere, where video conferencing is easy, phone calls are free, setting up chat rooms is easy, distributed source control systems enable efficient collaborating on source code, and shared documents (such as Google Documents) are ubiquitous.
I'm sure a useful middle ground is possible, if companies were actually using all the toys they (help) develop themselves.
Here's an email I received just a couple of days ago from a recruiter:
"Are you interested in the following contract or perm position..?
Key Tech: C++, STL, Boost, NAG, Real-time, Multi-threading, Parallel-processing, GPU (GPGPU / CUDA / OpenCL), Grid Computing, Agile, TDD.
Leading financial software house requires a number of talented C++ developers to work on high performance grid computing solutions for a tier 1 Investment Banking client based in London.
The successful candidate would be working with cutting edge hardware and state of the art software tools, delivering real-time pricing & risk applications, on-site in a Front Office environment.
Essential Skills: Proven ability to develop and maintain large C++ libraries using STL Strong core computer science knowledge; data structures, numerical algorithms Experience of high performance development; optimisation, threading, profiling Passion for technology, innovation and delivering outstanding software.
Desirable: Use of Boost & NAG libraries GPU programming, particularly GPGPU / CUDA / OpenCL Java and C# / .NET experience Compiler theory / cross-compilers / code generation Work experience in the finance industry, particularly front office
* Finance experience NOT essential, developers from a Gaming, Telecomms, Medical or Areospace type background welcome to apply *
Location: London Rate: £500-£650/day Duration: 12 month contract (depending on experience)
Apply with your latest CV or call for further info...
Or if you're not looking, feel free to forward this mail to a friend.
Regards,
Jamie Burgess Outside of the financial sector the money is just not that good in this country.
I live in an economically weak city in the western region of Germany and make around $55k (pre-tax) as an average programmer in a small company in my third year after graduation. However, since the region has had a population decline for many years, the housing market is quite cheap and I can live alone in a comfortable 62 m² (670 square foot) apartment for around $500 a month.
Even though I earn just around average, I'm currently not very interested in moving to an economically strong region because my feeling is that the cost of living would probably just eat up whatever I would earn more.
You might not get £60K or £80K straightaway but you will get £40K just by not accepting a tiny amount.
I think IT wages are flat due to everybody's fear of moving jobs.
Everybody finds themselves in the same underpaid first job (or three) out of school while they build a reputation. The important thing is to recognize when you've become a Computer Vision Specialist with strong C++ and Python skills and on that day go out and find the place that pays $200/hr for that sort of thing.
There are lots of that place. As you've no doubt noticed, none of them are advertising in the London newspapers. But if you started networking your way into the computer vision scene in California and maybe finding some folks who might be in a position to hire a guy for a remote position, I can't imagine you'd do much worse than you're doing now.
Incidentally, the fact that "everybody" is trying to hire at comically low salaries doesn't mean that the market salary is comically low. Quite the opposite. If the market really did contain skilled people willing to work for such terrible wages, those companies wouldn't be hiring anymore. The fact that they keep at it is adorable in a way, but from your perspective it should be taken as meaning that they're just not being realistic about what a skilled developer should cost.
The market has always been low for permanently employed computer folks here so far I as I can see, with the exception being the late 90s before the bubble burst.
That, or all the software development companies in London will eventually fail from lack of employees.
As I say, the market is not in a depressed state at the moment, it's not the case that it's a ridiculously low offer that's what UK software jobs pay.
Software engineers are just not paid rockstar wages in the UK. So they will find people to fill many of the roles. Software salaries are still good compared to average wages, so people will go into it, and work for better-than-average-but-not-awesome money.
So while it's no doubt true that there are lots of poorly paid positions, and evidently nearly enough developers willing to fill them, there are also plenty of good jobs to be had there.
You only know a few devs, I think your sample is highly skewed.
Absolutely. That's why I mentioned it.
But at least now you know what you need to call yourself if you want to make market rates in London. Those two things you mention both translate back to "computer programmer" in terms of what you actually do. They just pay four times as much.
That's a pretty good direction to have things skewed if you ask me. If I were living in London, I'd definitely be skewing my sample of jobs that way.
And thanks, but I've known for years and I don't want to make those rates in London because I don't (and don't want to) live there...
Set up a limited company, get contracts. I am the owner of my company and set my own salary level and stock dividends, I also get to pay myself a huge bonus every quarter and it's more tax efficient than salary payments. Not tax-free, this is not some dodgy scheme involving offshoring or any of that nonsense it's just how contracting and/or freelancing tends to work. It is more effort and involves juggling accountants and various forms of insurance, you also need to be careful not to be hit by IR35 (mostly through working short term gigs for specific projects and having well-written contracts) but in the end you can be far better off.
The permanent jobs I'm offered/considered for tend to be in the 40-60k range, so I reckon I have a bit more experience than you, but I can make the net equivalent of that in six months contracting. I mostly program in C and I'm not even in London any more. I could probably almost double my rate if I was prepared to move to London.
--edit-- just thought I'd add - I wish I'd thought of it sooner, as your situation is a very familiar one to me from my time in the big smoke.
The thing is, after University I fell out of love with web development, and in love with AI.
I'd like to continue in that field. But I can't imagine it's as easy to find contract work there. You can't simply point people to your portfolio.
I suppose I could have a go pointing to the papers I've published and the articles in magazines on my work. Perhaps something to look into more seriously.
Thanks for the advice, at any rate.
If nothing else it's worth a look, good luck :)
My understanding is that IT keeps things together, but the "things" are what ultimately moves investors and the money.
There is no money in IT but lots in 'tech'.
1. Tech money isn't made in the wages, and
2. This average wage would be weighted heavily towards sysadmins, not the tech industry
Anyone who thinks money is made through stock in this industry is going to end up poor.
One that can be summarized thusly: "Top executives are taking all that money for themselves".
Average CEO in 1970, $700,000/yr, 25 x worker average.
Average CEO in 2012, $13,000,000/yr, 380 x worker average
The management salaries weren't the part of the calculation. They were considered constant and therefore insignificant in the mass production.
But now, when your CEO makes 380x worker average, and the rest of the apparatchiks make the same combined, and you have 250 workers - then it is no longer wise to "optimise" worker salaries at all because they are by far not the biggest expense!
That's capitalism turned upside down. And I know it because I see how people are able to account for recurring costs but put a blind eye on development and management costs.
P. S. Maybe it tells us it's CEO/traditional management who need to be disrupted now. In some areas you can imagine a worker's cooperative paying 1.5x average salary to workers, outsourcing their management cheap, and still being insanely competitive thanks to no apparat spendings.
($13,000,000-$700,000) / 28,000 = $439
Income has remained stagnant for the past 40 years. I don't understand how the massive gains achieved in the 40-60s is relevant.
The whole story behind the 1% thing is that for the past two generations the benefits of the massive productivity gains we've since achieved have gone disproportionately to owners of capital.
When we talk about income, we're really talking about a fraction: nominal dollars over the cost of living. The point isn't that there have been no wage increases, the point is that they've barely kept pace with inflation. Someone born in 1935 living in 1965 had experienced a huge shift in real wealth and had every reason to expect that as society's wealth increased so would his.
This is no longer the case.
Becoming irreplaceable, my guess is, is where the cash is.