If Tech Is So Important, Why Are IT Wages Flat?

http://it.slashdot.org/story/12/12/05/2115238/if-tech-is-so-important-why-are-it-wages-flat

by bitcartel • 14 years ago

57 65 14 years ago

it.slashdot.org

paulsutter• 14 years ago

Two reasons:

1. Tech money isn't made in the wages, and

2. This average wage would be weighted heavily towards sysadmins, not the tech industry

NateDad2• 14 years ago

1. You're wrong 2. You're probably right (that the wages include a lot of tech support, not specifically software developers)

Anyone who thinks money is made through stock in this industry is going to end up poor.

hayksaakian• 14 years ago

IT is sadly not at the epicenter of growth in the industry.

My understanding is that IT keeps things together, but the "things" are what ultimately moves investors and the money.

sonabinu• 14 years ago

You said it right!

tekromancr• 14 years ago

I think patio11 would agree with you.

patio11• 14 years ago

"If people get older every year, why are college students always the same age?"

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.

mixmastamyk• 14 years ago

1) Cloud hosting/SAAS/PAAS

2) Outsourcing.

phillmv2• 14 years ago

Eh, I'm not terribly persuaded by that line of reasoning: the article CW links to^1 mentions that the IT field operates at full employment. At 3.7% unemployment you have a huge amount of bargaining power.

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.

riffraff• 14 years ago

> the IT field operates at full employment. At 3.7% unemployment you have a huge amount of bargaining power.

this could also be seen as a market at equilibrium, so the bargaining power is already accounted for.

rmc• 14 years ago

At 3.7% unemployment you have a huge amount of bargaining power.

Yes. People just don't realise it.

tomerv• 14 years ago

The way I see it, "flat" wages are the default state, and I would expect wages to be flat for many othet areas of employment. It is true that IT has become an increasingly important part of the economy, but wages in the field were always relatively high, and now you have many more employees to share the workload. It's simply that the IT field had become much larger, not more prestigious.

ijl• 14 years ago

Flat wages really aren't, for the reason that labor productivity has historically and consistently increased slightly every year. Some shared split of productivity gains between corporations and employees accounts for great wage increases during the '40s, '50s, and '60s. Why there hasn't been an increase in wages for most workers from the '70s on is an interesting economic and sociological issue.

georgemcbay• 14 years ago

"Why there hasn't been an increase in wages for most workers from the '70s on is an interesting economic and sociological issue."

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

phillmv2• 14 years ago

Okay. What are you arguing here?

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.

digitalWestie• 14 years ago

Wages in many industries have been stagnant for a while now.

gojomo• 14 years ago

The underlying data is from the EPI, a left/labor/economic-protectionist advocacy think tank whose choice of figures/methods/spin will always emphasize a 'workers need rescuing' narrative. In this case, the aim of the cited report is to advance EPI's conclusion: "Now is not the time to increase the number of H-1B visas and STEM green cards".

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.)

fleitz• 14 years ago

Because most companies run IT as a cost center rather than a profit center.

There is no money in IT but lots in 'tech'.

wladimir3• 14 years ago

They're flat at a time in which many others are losing their jobs, to be re-hired at lower wages, or unable to find jobs at all. Comparatively speaking we're still off very well.

batgaijin• 14 years ago

Slashdot, asking questions when they know the answers: http://apple.slashdot.org/story/12/04/22/1525212/apple-and-g...

jeffdavis• 14 years ago

I find it amazing when people ask questions about the price of something without even considering supply and demand.

randomdata• 14 years ago

Supply and demand is really the only consideration. However, I think that is implied. You could rephrase it: If tech is so important, why is IT demand not rising faster than supply?

Radim• 14 years ago

Uhm... asking serious questions about the price of something is supply and demand.

rodh4• 14 years ago

What always surprises me with these posts is the amount that developers make in San Francisco. Or possibly in the US as a whole.

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.

wladimir3• 14 years ago

Indeed, London and surroundings are abnormally expensive to live in. This was one of the reasons for me to forego working there when I had the chance, even though I would gave gotten a slightly more interesting job and higher pay. So I stayed in the Netherlands, where living is still somewhat affordable.

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.

steelcm• 14 years ago

London house prices are crazy expensive. My current flat costs me 2,000 GBP (~3,200 USD) pcm, and it's not event central London!

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).

Patient03• 14 years ago

Have you taken a look on Jobserve lately? Contract rates in London of 500gbp per day are easily achievable with your skill set. You have to be good though...

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

IT Division Huxley Associates 0207 469 5050 j.burgess@huxley.com "

Joeboy• 14 years ago

Recruiters sometimes advertise nonexistent jobs, or existent jobs at nonexistent rates, to get their foot in the door. I wouldn't necessarily take advertised jobs/rates on jobserve at face value.

skrause• 14 years ago

I've always thought that people in very expensive cities would generally earn much more so that after substracting the cost of living you would end up with more or less the same.

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.

danmaz74• 14 years ago

On the other hand, in an economically strong region you would then find many more opportunities to move upwards - if you're interested in that.

throwaway1979• 14 years ago

I think that is very wise. I grew up in Toronto, where programmer salaries were low and cost of living was middle-to-high. There used to be a wall around 60-80K per year. I moved to the US to regions where salaries go north of 100K easily. In the grand scheme of things, this was not an improvement. My cost of living increased drastically (paying 2700 in rent for an apartment). I always imagined having a house and kids at this stage in life. Financially, both seem like stretching it.

yeureka• 14 years ago

I was in a similar situation a few years ago, working in games in London. The only way I found to increase my salary was switching to finance. It's not an interesting field to me, but my income doubled.

arethuza• 14 years ago

Supply and demand - there are specialised development roles that can command up to £2000 a day in the UK, but you need a lot of domain knowledge and the development environment is possibly some of the worst there is.

adaml_623• 14 years ago

You are currently earning below the 10th percentile for C++ jobs advertised in London (that list a salary).

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.

jasonkester3• 14 years ago

It sounds like you see all the pieces, so you hopefully have all the information you need to fix your situation.

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.

rodh4• 14 years ago

Thank you! I have been working very hard to build my reputation in the computer vision industry, over the years I've worked where I am. I think I'm making headway, but I do realise I still have a long way to go. It's refreshing hearing some words of encouragement! Thank you for giving me more motivation to keep pushing on this cold morning commute to work.

Nursie7• 14 years ago

I don't disagree with the substance of what you're saying but software jobs in the UK, even in London, do not pay on the same scale as they do in the US AFAICT. Or Australia actually, by moving over there from London (where I was not in a bad job) I pretty much doubled my income.

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.

Nursie7• 14 years ago

Contracting, contracting, contracting.

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.

rodh4• 14 years ago

I've been considering that move. To be completely honest, that's actually what I was doing whilst at Univesrity. I had set up a limited company, working on my own content recommendation startup. I was also freelancing as a Php and ASP.net dev at the time. I was actually making more at the time than I am now, 3 years on from graduation. Such is the nature of contract work, I suppose.

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.

bhntr3• 14 years ago

Without a graph, I'm not entirely convinced of the conclusion. 2000 was a crazy boom year for tech. I wouldn't be surprised if it took 12 years for wages to return to dotcom era levels.

akurilin• 14 years ago

Aren't there simply enough people in the field to make most IT workers (I include both programmers and "system administrators" in this category) completely interchangeable? As long as the majority of the workforce, the bottom of the pyramid, is readily replaceable by a steady stream of college grads, there won't be much need for salary increase.

Becoming irreplaceable, my guess is, is where the cash is.

ww520• 14 years ago

The closer you are to the money, the more pay you get. Money in term of how the company makes its money. IT is often far away from the money and get lower pay.

nianticbot• 14 years ago

where does the big data and data scientist fit into this .. if you believe it, some such as McKinsey & Co say "The United States alone faces a shortage of 140,000 to 190,000 people with analytical expertise and 1.5 million managers and analysts with the skills to understand and make decisions based on the analysis of big data. " http://www.mckinsey.com/Features/Big_Data

skilesare• 14 years ago

After a few years in IT you realized that you're stealing from yourself by earning a wage. Quit and become a contractor. You will make 3 x market at least.

If Tech Is So Important, Why Are IT Wages Flat?

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