Finance isn't highly paid for software work, it's fairly paid, by world standards, only because they contrary to popular belief, don't have any class hangups there and are comfortable with the notion of playing in a free market.
Finance pays a fair market wage, which seems high by comparison to all the unfair players out there, but isn't actually that unreasonable.
Startups pay a theoretically fair wage (if you accept valuations at face-value and exclude liquidation preferences). It's when you see the equity/cap table (2% for useless VPs and 0.03% for engineers)-- as well as what the founders have done to ensure their careers no matter what happens to the business-- that you pick out the classism of the well-connected. If you look at salaries alone, though, you won't see it.
Outsiders complain about finance "bonuses" (finance salaries are only at-market) while failing to account for the fact that that's a much fairer compensation system than whatever they get at their corporate jobs. Granted, the banking bonus system is horribly corrupt in practice; but in theory there is nothing wrong with it, and I'd rather have a corrupt profit-sharing system like that in finance than none at all.
If, stipulating the dollar value of the whole comp package, a comp package appears fair, it is still fair no matter what that company pays anyone else. Wages are "fair" or "unfair" based on prevailing rates and supply/demand.
And of course in the real world, wages are not based on supply and demand. They're based on leverage and BATNA.
Simply put, given two equal employees (hypothetically, if it were possible to measure this), it's not "fair" to give one $50k and one $300k. It's not about the prevailing wage, it's about the contribution relative to what is coming back.
You're a $100k/yr FTE dev. A VP above you makes $200k/yr. You believe that VP should be making $50k/yr. But your position isn't improved at all if they do. You're still making $100k/yr, and someone else is taking the $150k/yr premium.
So you say, "no, I should get a share of that $150k/yr premium." Well, OK, why aren't you? What you're saying is that you're worth more than $100k/yr. You already have a way of demonstrating that: demand a raise, then start interviewing.
The flip side of this, if it helps make the point clearer: you're a $100k/yr dev. The VP at your company is already making $50k/yr. This is good how? By any logic you could employ in the above scenario, you're worth more than $100k/yr in this scenario too.
What other people in your firm make is an orthogonal concern to what you make. Clinging to the belief that pay equity is an important part of your compensation is as likely to harm you as help you; stipulating that we are all especially high-functioning professionals, the notion of pay equity is part of what puts a ceiling on what you earn now.
The difference is in one scenario you're talking about a company that can pay out 300k a year, and in the other it's only 150k. Fairness is not about absolute numbers, but relative numbers in proportion to the total available.
What other people make is definitely not an orthogonal concern, and is hugely relevant. Your justification of not caring about other people earning more is incredibly short-sighted. Yes, it does improve my position if other people earn less, because that money is then available for the company to use on other things, such as paying me.
Furthermore, to suggest that this is "irrational" is offensive and irrational in itself, and would not be inconsistent with psychological propaganda.
The word "irrational" doesn't mean "idiotic", by the way.
Ah, I think this explains the disagreement. That kind of "rational" has nothing to do with fairness, and everything to do with maximizing individual payoff. I think you've conflated the two, when they're almost completely incompatible. I knew you were a closet republican ;)
This is why I get supremely annoyed at claims that a specific non-mathematical argument is "irrational".
(Examples of non-computable things: company spends resources on R&D and makes more long-term profit; company spends resources on higher pay for everyone else and boosts morale; reputation of company increases and you attract a wider pool of potential employees; etc.)
In more mathematical terms, greedy optimisation algorithms in the name of short-term "rationality" most often lead you to a local, not global, maximum.
Here is an analogy: the business has $150k to spend. Would you rather have it spent on a pair of paintings for the meeting room, or in company-wide renovations? I think it's rational to choose the latter, though it doesn't immediately affect your bottom line.
If a company has 5% to give to employees in a certain year, VPs getting 1% does increase the odds an engineer will get 0.03% instead of 0.1%.
For what it's worth, I have made substantially more than my coworkers in almost all of my jobs (based on what I could infer from watercooler talk after being around a while), and I don't think that's fair either. I actually chewed out one of my managers once when I found out a coworker was making half of what I was.
Why wasn't he paying him more? Because he could get away with it, not because it was fair. He was a hard worker, very smart, but rather timid. Put this guy against the alpha male manager, and unless the manager wants to be charitable, that guy is not getting a dime more than the manager can bully him into taking. What's worse, the guy will probably come out thinking he got a good deal.
Because the market cannot operate, it is suppressed by the class system.
If you're smart enough to be an engineer, you're smart enough to realize the only way to win is not to play. So you either go into finance, or leave the UK, or grit your teeth and accept that in order to do the work you enjoy, you're going to be poor compared to someone who couldn't do your job in a month of Sundays, but has the "right" connections.
Is the UK class system still that bad? (I'd heard horror stories but assumed they were at least somewhat overblown).
Same in out politics too actually. Might not be Lord-this or Lady-that running the show, but they all graduated in PPE from Oxford...
I presume the US wouldn't have as strong a class system as the UK. There's a bit in Mad Men, where the British character (Lane Pryce) complains to his wife that "I've been here over a year and no-one's asked me what university I went to!"
One of 6 particular universities.
A similar term in the USA would be something like Ivy League:
It's a phrase that someone from the associated region of the world can generally go "Oh, you attended a <terminology> school?" and immediately have certain stereotypes and assumptions (accurate or not) come to mind.
But it's quite strong for CS/AI, as they have the largest CS department in Europe, producing the largest amount of world-leading research (according to the latest government-organised Research Assessment Exercise).
For undergrads that means there is an unparalleled variety of courses you can take, both in depth and breadth. I remember I had a choice of about 25 courses in my 3rd year and over 50 in my final year. For most British universities, your choice is rather limited - usually between 8-12 courses each year. Another bonus is that you get to work with leading researchers on your final year project. E.g. some of my friends were supervised by Phil Wadler - the guy was one of the principal inventors of Haskell and, with Gilad Bracha and Martin Odersky, designed Java generics and the extensions of the Collections framework.
So, Edinburgh is quite special and CS/AI is a particular focus at the University, so it's a shame not enough people know it.
Martelsham is the place where Tommy flowers used to work its the equivalent of ATT labs.
You like it or not, breeding matters a lot. What all those companies buy is not grades, it is not even a particular phenotype, it is a few generations of fine breeding, well-educated parents and relatives, etc.
So, most of those guys "with a sociology degree" worth it, you like it or not. It is just one of these small unpleasant truths about life.
In general, people with well-off, well-educated parents tend to do better than people who have undereducated poor parents. If you ask me, that's an argument for making sure we have less poor parents and for making sure that more people have a proper education, and not an argument for unfounded admiration for supposedly superior genes.
It's an argument for socialism, not for elitism.
Of course, "genes" does not mean the destiny, even if preferences and abilities are "encoded" there. There are long and boring debate about role of genes and IQ score and the consensus is that "almost everything is inherited but without proper environment, training and fertilizing the potential could not be fully expressed".
Well-off, well-educated parents, in a few generations back, is what could be called the environment. And what it amounts for is not just self-esteem and developed, refined mind, but also non-verbal behavior, which, like looks (a signal of good genes) are much more powerful drive that people like to admit to themselves.
As for ideas of so-called equality, be it socialism or equality between men and women, these are just theories. In reality (at least what we could see in labs) genes are the vehicle of evolution process, which is all about inequality.
It is correct to say that these theories, being intellectually attractive, are in contradiction with the very process which made us. So, it is better to check ones premises.)
For example, people might like it or not, a good-looking person (due to genes) will receive much more attention from people in all his endeavors, be it studying or carer building, or simply having a good time. Too much attention could ruin, and it is well-known in the field of personality disorders.
Please, do not even mention that nonsense that what is considered good-looking varies from culture to culture, from age to age. Good looks are youth, health and lack of deformations ("average" face considered the most beautiful) or signs of good genes.
Actually, any modern psychology textbook treats those subjects is very clear.
I am from a fairly small central European country and programmers there barely make more than other professions; the salaries often amount to the national average.
This seems strange to me, as it takes a few years for someone to get good at software (the supply is constricted), and where I've been involved in recruitment, finding good people is difficult.
It's also interesting to see that people get paid so much more in finance, or at American companies. That is, a finance house could probably hire any good 5+ year C++ developer at the 'normal C++ developer' rate of 30k, and get good results. But they choose to pay 50K for a 'finance C++ developer', whether he was earning 30K last week or not.
That says to me that pay is not set by supply by labor supply and demand but something else. That is, you don't get rich by having rare skills that make people money, you get them by knowing which industries pay over the odds for labor. I think that's a good thing to realize if you want to be comfortable.
Banks, finance etc do tend think in supply and demand terms. Can't find good people? Raise the price. Hardly ever happens in other industries.
The sort of developers that get well paid in finance (it should be noted that there's a vast range of dev salaries in banking depending on the sort of roles being worked in with Quants, Quant/Devs and Front Office developers being very much at the top of the pile) are those that have Masters or PhDs in Maths and work on pricing algorithms, those who work on high frequency type applications, those who have enough maths that they can turn algorithms into solid applications that can't fall over during the trading day (i.e. solid, highly optimised software), or those who can interact with the trading desks and build anything which helps the desk make more money. One thing they'll all have in common as well is a large amount of domain knowledge about the (financial) products that they work on, as well as the ability to work in environment which are often noisy and stressful. Anyone who needs their own office and a quiet environment in order to get into the zone and hack on some code is not going to thrive at a bank.
Edit: Forgot to mention the country - Poland
Ukraine is in Europe.
Google (or books) are your friend :)
By any reasonable definition, Ukraine is in Eastern Europe, whether you use geographical, political or historical definitions. This is what Wikipedia says, as do most atlases and the CIA world factbook, in fact I've yet to see a source saying otherwise, but you can surely provide links to one. The EU is not the same as Europe, by that narrow definition, Switzerland is not Europe. Your statement that nobody in/from Europe or Ukraine would say it's in Europe can be disproved with a simple counterexample: I'm from/in Europe and I say so, just as a random sample of my Ukrainian acquaintances.
No comment on Russia being "by no means" European. I guess you'll need to do a lot of Wikipedia editing to remove all references to Tolstoy from the pages on European literature.
In my experience it's only people from the US and possible the UK and/or Scandinavia that only think "Western Europe" when they say "Europe".
However I would say this type of shorthand is far more widespread than UK and Scandinavia. My German friends adds Eastern Europe when speaking of Ukraine, too, as does my Italian friends.
The cultural differences in Europe are far more complex than an East-West divide. Saying that Ukraine has a European culture is like saying India and Japan have "Asian" cultures. It sure doesn't make them the same and frankly, it does not even very similar.
Politically and culturally, it's in Europe. Greek Orthodoxy and Greek-derived scripts are something you find in Europe since the Middle Ages.
Not really. I don't know of anyone who identifies by EU citizenship. Not even EU top level politicians. We're all nationals, and even 3rd world refugees becomes citizen of a nation rather than EU.
When speaking to people from US, I usually identify by from [country] or "from Europe". The latter seem to be enough for most mericans that think of EU countries as US states.
Of course the cost of living is alsop very high.
National average net income is about 400 euros
Regarding payments to juniors and interns, I know it from the market - I know some salaries of my colleagues. When I started in IT - in 2006, I started with about 230 euros net, which was also decent.
I am talking here about Cluj-Napoca (the second largest city in the country), not the capital, where salaries are better.
So, if you want to live in a place and earn 4-5 times the national average income while doing what you like (programming), come to Romania :))
In the US, my experience is that software developers generally are paid competitively. CS and chemical engineering graduates routinely get the highest starting salaries all around the country when it comes to four year degrees.
That starting salary may be $100k in Silicon Valley, $80k in Chicago, and $60k in Nashville, but all three numbers are competitive relative to the local market. In fact, you will find that in comparison to the cost of housing $100k in Silicon Valley is not quite as well paid as you think.
Investment banking is often long hours (9-midnight) plus weekends. Many leave after a year or two or don't make it past 2 years (don't get their contracts renewed after analyst). Also, I'd consider those individuals to be some of the very smart; does this survey really allow one to filter how good they are at their job? There are different levels of software engineer from someone tweaking a wordpress blog template to someone writing assembly code on chips.
Also, what about google and facebook? They pay pretty well, don't they? Also, there are other companies like linkedin and oracle here too. No idea if they pay well or not (no info to base it off)
Working for government contracts as non permanent employee ?
There are smart people, they're the seniors. The juniors are just like everywhere else. There are the actively clueless.
The only good thing about investment banks is that they're more agile than consumer banks. That's probably country dependent though.
Don't think it's like this special place or some crap. It's really not.
On the whole, if you have strong programming skills you're going to be better compensated in the financial sector than at google or facebook. You just have to work with a non software oriented business that doesn't give a shit, and put up with things.
I moved overseas to Australia from London a few years ago. Same job, same company, 60% pay rise.
Now I'm back in the UK the permanent salaries on offer seem like an insult. I have to go contracting to match it.
I find trying to live in an expensive city while on a low salary admirable.
I live in a flatshare, 40 minute door-to-door commute (via overground, luckily, not the tube) and the rent is about 4k a year.
Our office is just off of Brick Lane, and it's a short 15 minutes to work every morning :)
I live in Scotland near Edinburgh, my first dev job I was earning £13k. It isn't super easy to break into development in the UK but within a year that had about doubled and that and learnt enough to be able to jump ship, which I did.
Now years later, I've happily earning more than the London average by contracting. I ate shit early on because I wanted to get somewhere in an economic time where the young are being screwed. I think it was probably worth it, but only until your experience and talent matures a bit.
I made very nearly that as a fresh graduate with an unremarkable degree and no relevant experience. Out in the sticks with more reasonable living expenses. Thirteen years ago, and I'd come close on several better paying positions. (Tip BTW, £400/mo after rent won't be enough for independent living.)
You're letting loyalty cloud your judgement; you can do better for yourself. Counting pennies isn't fun and you don't need to.
Some people seem dissapointed that developers are not being paid more than airline pilots: it's just not realistic outside of a boom economy (see: bay area).
They also have to go through a five or six year medical school and five years of post-graduate training along with profesional exams (MRCGP exams). They're also bit of an anomaly compared to other doctors in the UK - consultant salaries are between 75k and 100k according to the official pay bands [2]. The only way that most doctors can make serious money is by having a private practice along with the risks and costs that come with it (for point of reference, my other half is an obs and gynae surgeon and in that field the private insurance is £150k a year).
[1] http://www.telegraph.co.uk/health/9300823/Most-doctors-are-n... [2] http://www.nhscareers.nhs.uk/explore-by-career/doctors/pay-f...
I bet the average Ceng doesn't earn anywhere near 100k.
And your forgetting that consultants often have a private practice on the side from thier NHS gig.
In university you're surrounded by clever people who can programme (if you're in a CS degree). It can make one think that one is nothing special, and everyone can programme.
If you're not a muppet, it's quite easy to land 50k+ in any major city.
I have a (non-finance related) start-up in central London and it's pretty difficult to find skilled developers with 4-5 years experience who are asking for less than £50k p/a.
I hear so many companies that whine about the lack of perm developers then go ahead and hire a contract dev at 500/day. That is the market at play, if our city cannot pay our developers enough to sustain a reasonable standard of living then they wont work.
Honestly I'm glad to see it. The more developers that follow the market (contracting) the better. Hopefully that'll wake a few people up and we'll see salaries start hitting the numbers that are needed to live in this over priced city.
That said, if I WFH 100% 50-60k would be fantastic but that's not acceptable these days.
</rant>
Now we're outsourcing to Romania. I haven't had the heart yet to ask one of them.
EDIT: @nawitus:
Sorry but your data is totally useless for this purpose. 1) it's the whole economy, not just programmers and 2) it includes part time workers! To imply that full-time programmers in London are working on average less than a 40 hour week is so far from reality.
Notably, the longer hours worked in the US compared to Europe comes at the expense of less per-hour productivity in most studies I've seen, though not enough to result in less per-worker productivity. If that's true within Europe as well, the value of the time worked would be closer than the number of hours would suggest.
Imperfect doesn't mean totally useless.