Tech salary insights from 1.2M foreign worker visas
therotationship.com
therotationship.com
Especially from these companies with large profit margins and huge revenue per employee numbers. It seems like engineers have captured almost nothing of the fruit of their labors.
Over here in Europe (or at least Germany) salaries are incredibly uniform (doesn't really matter if you suck or get as much done in a day as others in 1-2 weeks; if your bugs get constantly reopened or your code is rock-solid), and most people seem to get maybe 35-50k€ after graduation (diploma/master's degree).
Money certainly isn't everything.
Vacation sounds like a real problem, but it seems like you could circumvent that by going freelance and just taking off x days a year between projects.
http://www.statista.com/statistics/215502/per-capita-health-...
Company policy was that vacation was a reward for tenure, rather than a negotiable component of compensation. Best they could do was offer 20 days for the first year, and only the first year.
It was an asinine policy if you ask me. An immigrant is exactly the type of person who would want to take a holiday back home to see friends and family. To make the cost and hassle of two long flights worth it, it would have to be two weeks at least. And that would leave 0 days left for the rest of the year.
Why aren't companies competing with that in the US? If I was offered $150k with 10-15 days holiday and 50hr work weeks (expected), I'd immediately start bargaining for 25-30 paid days off, and make sure I wouldn't be expected to work more than 40h/w. Is that uncommon in the US?
Or is it common to take unpaid days off, which you can afford given the high salaries?
Startups that need to launch yesterday I realize often have young employees without family, but these are large corps like Oracle/Yahoo/Google, these have to employ quite a lot of engineers in their 30s, 40s and 50s? Like I said, I'd be willing to accept a substantially lower pay for a good holiday (5-6 weeks), and a good work/life balance otherwise, like good processes that ensure there's no regular "crunch time".
People working the longest hours aren't necessarily making more money because of it. There's no overtime.
People don't want to make less as they go on in their careers, and don't want to look like they don't want to work a lot, so if they take less time they try not to do so overtly.
> then you get a "quieter" job somewhere else when you need a job that allows you to pick the kids up at 4.30pm?
Recalibrate your expectations. No one is leaving work at 4:30pm. 45 hours a week is called "40 hours a week" and no one works just 40 hours a week. People don't expect to do very much outside of work except on the weekends.
As for my questions above, it still doesn't add upp. Either you don't have kids as long as you hold one of these jobs or at least both parents can't have such jobs, so it's basically a job that requires one parent to stay at home at least part time? Or you need a nanny to pick up your kids after school/kindergarten? My guess is that you are going to say that normally one parent (and not a random one) just stays home for years after having kids, but that would be a real blow to my view of SF/NYC as progressive...
It seems odd to me that people making a lot of money (which I hope these salaries are considered), wouldn't just invest a huge chunk of it in family/free time, by simply working less hours, e.g. 75% at 75% pay.
With my european glasses, the salaries look huge, but of course I haven't factored the cost of living and certainly not the impact on work/life balance. I hold a well paid (by local standards) full time dev job, and I drop off kids at 8 and pick them up at 4.30. Every other day my wife does that so I can work a bit longer. I never manage to do 40h at the office, but it's considered normal for people with kids to leave early and do an hour or so of work in the evening.
Not sure what my point is, I guess it's that I'm surprised of how a "culture of work" can form in this way in a country that is often percieved as valuing family quite a lot, especially in progressive regions where presumably equality means a lot. Also I'm surprised of how employers (candidates, rather) aren't pushing the compensation in a more work/life balance friendly direction. Especially since these were visa applications, a lot of which I assume come from people used to 5w holidays and actual 40h workweeks.
Almost universally what you see in job ads and recruiter spam is "we offer exciting challenges" and that they've created the most fun place to work ever and if they mention compensation at all they offer "market salary" or "salary commensurate with experience", to the point where all these different messages sound pretty much the same.
I get hundreds of messages on linkedin and they all sound like the above with exciting challenges with a market salary, but I don't recall anyone attempting to promise above-market salary or better vacation time, even once. You would think that you could get a competitive advantage by promising tangible benefits as you suggest, but I've never seen it.
Some do mention being more flexible with remote work though.
> so it's basically a job that requires one parent to stay at home at least part time?
Yes, basically.
> Or you need a nanny to pick up your kids after school/kindergarten?
In the US children are universally bussed to/from school, you don't need to come pick them up yourself. So once they're old enough that they don't need constant supervision they often have a couple hours to themselves at home.
> My guess is that you are going to say that normally one parent (and not a random one) just stays home for years after having kids, but that would be a real blow to my view of SF/NYC as progressive...
In terms of labor conditions? CA and NY have a handful of better labor protections than the rest of the country, but progressive by your standards? absolutely not.
> It seems odd to me that people making a lot of money (which I hope these salaries are considered), wouldn't just invest a huge chunk of it in family/free time, by simply working less hours, e.g. 75% at 75% pay.
That would be great. I would totally do that.
Remember, people don't get paid by the hour so there's no counterincentive to employers using social pressure to get you to put in as much time as possible. There is no concept of a set number of hours you're supposed to work.
> Also I'm surprised of how employers (candidates, rather) aren't pushing the compensation in a more work/life balance friendly direction.
Yes. People are not willing to fight for this.
> Especially since these were visa applications, a lot of which I assume come from people used to 5w holidays and actual 40h workweeks.
The bulk of these these are from Asia or India where the salary differential might be very large.
By working ~40h I maintain my strength and keep delivering really good results. But when I sometimes do 1-2h overtime I notice that others (who come to work at 9:30-10) also leave at 5:50-6, so generally in Germany I'd say regular work hours are a given thing and most people don't do that much overtime, at least in IT. I've heard bad things about creative industries like ad agencies, or IT companies with lots of young engineers w/o kids.
I mean why would I work more - for more money, sure, but not for free. My employer doesn't pay me "overmoney" for the same amount of work, does he? I at least get an overtime account and this year I managed to reduce it by ~10 hours. With different overtime policies I definitely would NOT have taken the job - NOT good for the company ;-)
I would suppose that they were single with no dependents.
If you can get additional unpaid 15 days leave, then it's just 6% less salary per year.
But developer salaries - definitely not.
The salaries listed here are in our highest cost of living areas. The vast majority of developers aren't earning anywhere near these wages. Most are in the $50,000-$90,000 range (not too far off of your EUR$35k - $50k figures). Second, I think you're discounting far too heavily how much extra the average American has to contribute on his own for his own health and retirement. One might consider the 15%-20% one should take out of his pre-tax salary for savings to be an implicit tax we have to pay. The federal marginal rate for an individual earning $130k/yr is around 30% (for the sake of argument--it's actually a bit higher). In SF and NY, the state taxes wll boost that 8%-10% (or more). So the base tax rate is already around 40%. Couple that with this implicit tax, and Americans are paying a "tax" that is about what Europeans pay. Except we get a lot less for it by a long, long way. And, actually, since it's infreqent to earn that much money as a software developer without having a college degree, there is the additional factor of the cost of our education. Most people can't afford the 15%-20% hit to their pay because of the high cost of everything else, so the 'add-on' cost that hits them in retirement is even worse.
I'm surprised by the (low) 50-90k salaries you mention. I've always read much higher numbers. Probably due to the bias on blogs/news sites to West Coast companies.
These employees are bringing in billions of dollars for these companies and for them to still receive < $200k per year is appalling.
Think about this. You get into work at 8am and you leave work at 8pm. You manage a team of engineers that are literally building the foundation for the future of the company. Your entire life is dedicated to making this company money.
Do you still find those salaries low?
Do you really think this is truly representative of what the typical programmer is doing day-by-day?
Many will get in at 10am, leave at 4:30pm, manage nobody, and work on somewhat important projects that nevertheless are not even remotely the foundation for the entire company or the company's future.
The people who actually worked on the foundations of these companies are already multi-millionaires. The people spearheading huge projects at the highest level are also almost certainly making far more than $200k/year.
To be comparable, a salary number should reflect a full time work week, and be for a position which TWO people can hold, full time, while still having time to pick up kids. Obviously if I worked 12h days I'd be supporting my partner who could NOT have the same full time job. Not sure what these figures represent, I thought they were regular day-jobs, which you could hold while still having a meaningful work/life balance?
> These employees are bringing in billions of dollars for these companies and for them to still receive < $200k per year is appalling.
The same can be said for employees of any large corporation. Sure you may be more or less replaceable, but still: the dollars brought in are return on risk by investors. It's no more appalling than fast food workers being paid peanuts in fast food chains that make a billion.
What are the numbers per employee?
Net income per employee:
Apple: $456,800
McDonald's: $12,530
http://www.wolframalpha.com/input/?i=profit+per+employee+app...
Revenue per employee:
Apple: $2,111,000
McDonald's: $64,320
http://www.wolframalpha.com/input/?i=revenue+per+employee+ap...
Apple has about 3x what it pays out in salaries left over after paying everyone, McDonald's only has about 1x salary per employee profit. McDonald's would go broke if it doubled everyone's salaries, Apple could afford to do that and still be hugely profitable.
Still, there is nothing that should make Apple pay more because they can, they only need to be competitive in salaries, not excessive. If they wanted to compensate employees more, that would probably not show up in these figures as it would likely not be base salary but rather bonuses/stock etc.
No, but to hear people complain about how it's impossible to hire anyone...
while inflation- and cost-of-living-adjusted salaries actually have not increased at all... what's going on here?
EDIT: Should probably define middleman class then...I guess I'd have to say, being able to purchase a house, pay off student debt in less than 10 years, afford to have children, buy a car, go to events and maintain a relatively comfortable lifestyle.
I should mention that those salaries are much more variable than developer salaries. It's not uncommon to find an insurance salesmen make less than $50k per year, but it also wouldn't be uncommon to find one that makes well over $150k.
It's really hard to see the future of the middle-class here in the U.S. I can't name five jobs that are a ticket to a comfortable lifestyle, whereas 20 years ago you could fire off 20 or so jobs.
OK, the difference between Germany and the US is that job creation is easier in the US -- less regulations on employers. One piece of evidence that this is so is the high youth unemployment in Europe compared to the US. Once all the developers willing to work for less than they could get have been hired. The employers in the US (at least during go-go times like now) are still motivated to hire additional developers -- because the US economy is good at utilizing all the development talent it can get. It is still profitable (just not quite so much) to hire a developer who demands the be paid comensurate to the value they add to the employer.
So, in the US, people who are good at negotiation and know they're good can hold out for higher salaries -- and still get hired -- at least until there is a slowdown.
There is my theory: German dev jobs are filled by workers who are bad at negotiation (like many many nerds are) or they do not have enough work experience to realize what they are worth. German employers probably do not have the capacity to employ everyone willing to work as a dev.
In contrast, in the US, a lot of devs are also paid less than they are worth -- because people, i.e., young nerdy men are basically the same wherever you go -- but there are also devs whose attitude is, well, I'd be happy to work for you if you pay me $200,000 a year. If you cannot meet my salary requirements, well, there's other productive things I could be doing with my time or maybe I'll travel and live off savings for a few years -- or maybe I'll keep on job hunting.
US employers would prefer to hire from the first group, but eventually all the qualified devs in that group have been hired. US employers are willing to hire from the second group -- since their labor can still be converted into more income than required to pay the dev the high salary -- making it profitable to do so.
If my theory is correct, the way to get a high salary in the US is to have the option of refusing to work -- i.e., no immediate need for money (or to please one's parent by getting a prestigious job). That's the way negotiation works: if my best alternative to a negotiated agreement (BATNA) is pretty good, then my negotiating position is pretty good.
This is basic microeconomics, and it works even if many devs are willing to work for much less than the value they create. There is no need for us to convince those devs to get better at negotiation. Or unionize of anything like that. That all changes, though, when not every dev who needs a job can find a job. (Which is an argument for taking a pay cut during economic downturns, I guess.)
Maybe it's the business (consulting) where they only care about the hourly margin, not about your performance (although I did an internal fixed-price project back then; probably saved the company's ass on that botched POS they had built). Generally, my impression is that salaries in Germany are very homogenous, and affected largely by age/experience and rank. You'd have to be a well-marketed freelancer to achieve high hourly rates (only a few people - relatively speaking - can do that).
When you write, "rank", what exactly do you mean?
Here in California, I think we do not use that word.
Devs in HK aren't valued outside of banking; Taiwan is similar (many are coming to mainland to make more money, go figure).
India, oddly enough, seems much more competitive to me in terms of dev salaries.
And none of that really amounts to much if you subtract the taxes, overhead and most of all the time spent between gigs.
If you do well you can make out considerably better than on a salary, but still, 490 per day for a .NET engineer (biggest shortage there is in IT in Europe) contractor is on the low end.
But still: tech salaries in Europe are low, and are being systematically depressed. The influx of relatively cheap engineers from Eastern EU countries is one influence, but not even such a big one, since most of them pretty quickly catch up (the tech culture means they're not easily isolated and exploited like other migrant workers).
The biggest depressing influence is simply social status: despite the scarcity, despite the value they add, there is an enormous resistance against awarding higher salaries to "nerds".
Now that I operate at management level, I experience this first hand. Everything adds up: our budget, the economics, the scarcity. We should easily be able to offer 30% higher salaries and still make out just fine, and it's the only way to compete with a handful of enlightened companies that pay well and the lure of self-employment (the only other way for engineers to break through the salary ceiling).
Nothing stands in the way of paying engineers better, except social status: paying a software engineer the same as (or more than) a manager is unthinkable. Despite the fact that those managers are less scarce, less skilled and add less value.
The "nerd" idea is a myth, a prejudice I myself had back in college. But it's not the reality. Most engineers are very very boring family men, not the enthusiastic hipster type in funky colored pants.
That said, I've been to Ireland lots of times for vacation. (I should go check the job sites.)
After a few of years on the job their salaries will be higher, but by that time they will also get green cards, so they won't show up in these statistics anymore.
Also, stock is not included in the data.
This is the big one. None of those numbers include equity, which can often be 40% or more of total compensation for engineers.
If engineers aren't capturing much value, it's because they're fungible, and there are many other people on the market who can do the same thing. Engineers that do have very specialized skills - say, compiler design experts or people with deep expertise in transaction algorithms or high-ranking engineers on Google's search team - can frequently make into the millions in stock grants.
If you think it through, one reason is pretty obvious: jobs can also go to those people in wherever they happen to be born, in many cases. Letting them come to your country makes things better for everyone. Remember, the labor market is not a zero-sum game, a "lump of labor": http://en.wikipedia.org/wiki/Lump_of_labour_fallacy
There is the additional twist that an immigrant foreigner who got their degree abroad won't nearly be as encumbered by student loans as someone with a domestic degree and won't negotiate quite as hard for a higher salary.
The American Middle Class Hasn’t Gotten A Raise In 15 Years:
http://fivethirtyeight.com/features/the-american-middle-clas...
If say, my former classmate has been at a company for 3 years right out of college, and I was at a different employer(s) working on a different stack for the same 3 years. And then I join his company, I think it would make sense for him to be a senior engineer while I'm not, even though we have the same "experience as engineer" as far as time goes.
Although really, titles don't mean anything in the tech sector anyway, so not like that makes a difference. It's the company structure that matters a lot more.
Also one thing to note here: these are 'Labor Condition Applications', not actual salaries. Often they are one and the same, but (for example) they do not include pay rises. I've ended up being paid more than every LCA I've had since I've been in the US.
if you don't mind, %-wise, how much more were you paid than your LCA? and do you think this is representative of others?
These are H1B labor applications, and salaries are carefully calculated to be a certain margin over the average salaries for the same SOC jobs for employed citizens in the region. These SOC classifications can be nebulous and thus not reflective of the true market - e.g. "PROGRAMMER" could be anything from data entry to senior software engineer.
This means that the salaries are calculated and set for a successful LCA approval, NOT the market rate.
Does this jibe with reality? Is the data bad, or are engineers losing ground?
I don't think there's a good reason why a capable, senior engineer would entertain a total comp under $200K these days in NYC - and I know many companies here that play with these numbers.
I think the fact that these are labor cert numbers definitely skews the data downwards.
Not that I don't believe you, but I'd love to, one day, actually see a real, specific engineering job posting with a published (or unpublished) base salary offering over $200K. Just one.
I compared my offers with friends and concluded a mid level (non-senior, not college hire) dev should make at least 135k for base salary and enough stocks and bonuses to surpass 200k per year. This is for Seattle as of spring 2014. However I followed my heart and accepted a slightly lower offer to join a start up.
Caveat: never believe any compensation numbers you read online or hear in person. People brag and exaggerate. Engineers lie to recruiters, recruiters lie to engineers, recruiters lie to other recruiters, and engineers lie to each other. I only believe numbers when I 1) see an offer letter, 2) see a pay stub, or 3) hear multiple people with the same job title tell me identical numbers.
For example, say your rent is $1000 and your salary is $100k. A 10% increase of rent is $100; a 1% salary increase is $1000. Net gain $900.
Then, on top of all that, your salary increase is taxable. A $1,000 salary increase will only get you about an extra $600 per year. So, you're certainly not coming out ahead.
My actual numbers are a $300/month rent increase (which totals $3,600 more per year for the same space and the same services) combined with a less than $3,000 pre-tax raise for the year.
Also see any generic michaelochurch rant about how landlords try to capture all economic gains (and they require "proof of income" so they know how much you _could_ afford if you really had to).
That's why fixed-rate mortgages are so great. Your housing payment is guaranteed not to rise! (taxes notwithstanding)
Everyone is losing ground. Engineers are just less fucked than most of the Former Middle Class. The Satanic Trinity of housing, healthcare, and education is going up faster than pay for pretty much everyone except corporate upper management.
I don't think the data's bad. Not even close. Those numbers seem about accurate for starting salaries.
There is another potential effect: as part of the labour certification process, the company is required to post up the applications of all foreigners it is hiring in a "prominent location" for around two weeks, to make sure all other employees are aware of it. It can be rather awkward to post up an LCA with a number on it that is significantly higher than what others in the company are getting.
My experience has been that many people are paid significantly more than the prevailing wage on the application. As mentioned, this is also just the base rate, without bonuses or equity.
I would say this analysis is useful for drawing comparisons between companies and observing trends, but less useful for the absolute numbers.
The biggest thing to know about these data from the US Department of Labor (DOL) is that they DO NOT reflect visas granted. They reflect Labor Condition Applications (LCAs) granted. denied, etc. This is only one part of the application for a visa, and every year the DOL certifies far more LCAs than there are available visas.
It is impossible to tell from the LCA data what companies actually followed through with the rest of the process and fees and were able to sponsor a foreign worker before the visa cap was hit each year. That information would come from US Citizenship and Immigration Service, and as far as I can find they do not release that information.
One interesting finding was that not only SF salaries are much higher compared to rest of the US, but users from SF tend to over-estimate how much the rest of the country is making. You can see this effect in the third map at https://salaryfairy.com/blog/first-10k-users-salary-maps-and...
(I took Atlanta, by the way. The cost of living difference is much larger than 20%.)
> Director of Marketing — $385,000
Are these different roles now?
http://www.infocaptor.com/dashboard/what-will-america-pay-to...
this seems like a treasure trove. any links to the raw data?
[edit: for a searchable interface to this data, as well as complete approved applications, check out http://dolstats.com/]
I've analyzed the hell out of this "salary bubble" issue (or non-issue, because there is no such thing) at length.
http://michaelochurch.wordpress.com/2014/05/24/whats-a-mid-c...
http://michaelochurch.wordpress.com/2013/11/03/software-engi...
Particularly, this article [1] about the perceived status of engineers vs. managers solidified my suspicions about the status hierarchies inherent to the industry.
1. http://michaelochurch.wordpress.com/2014/07/13/how-the-other...
Applied to software, the reason engineers aren't capturing most of that value is because all engineers are getting more productive. The benefit is accruing instead to those who employ engineers and those who use & purchase software. The exceptions are those fields where there are still significant barriers to entry and effective techniques are not widespread - isn't this why you want to become a data scientist?
I might buy that we're not in a salary bubble, but not for the reasons you propose. Rather, I'd say that the existence of a thriving market for startup founders is a market inefficiency. When engineers top out at $200K at a corporate job (and they don't always...I know some engineers with multi-million-$ stock grants) but can quit their job and instantly get millions in seed funding, that indicates that salaries should rise and seed funding availability should fall to bring those options back to equilibrium.
No. I'm not saying that software engineers should earn $700,000+ or that any reasonable economic model would have them at that level-- because never in the history of economics has one's labor being worth something to the employer been, alone, enough to justify floating it to that rate. I'm only saying that their value to the businesses that employ them is at least that high.
Applied to software, the reason engineers aren't capturing most of that value is because all engineers are getting more productive. The benefit is accruing instead to those who employ engineers and those who use & purchase software.
Then it seems like software engineers should unionize or professionalize. If there's no other way for them to get even a small fraction of their value to the business, then collective action is the best approach.
Because the productivity improvements required large amounts of capital in the form of land and equipment.
In most of the software world capital is not anywhere near as important as it is in other industries. The main input is labor.
I wonder what would have happened in the farming industry if land and equipment was free. I suspect the split of profits between employees and employers would be a lot more even.
Small note: there will likely still be a risk premium for seed funding.
Thought experiment: isn't it _less_ risky to do your own thing with funding than stay in a corporate gig? I know a lot of people not very trusting of people who have stayed too long in BigCo emeritus positions, as they tend to think everything requires an intra-company social event before, during, and after work gets done.
I am... not sure that's true. But SF culture could get there very soon (assuming it's a social issue of who would want to hire you later -- I think you'd learn more from a startup, so it's not _only_ a social issue). Probably is already there for low-status technology use -- let's say PHP development? -- at giant corporations.