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.
The salaries aren't low. The data capture mostly the lower end of the distribution. Keep in mind that the data are from H1-B visa applications, so these are relatively low level positions. There are lots of recent graduates (foreign students who studied in US universities) starting in their first full time jobs. There are also more experienced engineers hired directly from abroad, but they are somewhat of an unknown quantity and there is a higher risk premium, so their salaries are also a little on the lower side.
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.
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).
Bear in mind that the US is severely out of whack in terms of work/life balance. It's one of the things I find most difficult about living here - when I first arrived I had 10 days vacation a year. I currently only have 15. And don't forget to factor in healthcare costs and the like.
10 days vacation was one of the biggest reasons I didn't move to the US when I got my H-1B visa.
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.
Agreed, I spend most of my vacation days visiting family back home - it's been a long time since I've had an actual holiday, lying on a beach in the sun.
Yeah, that IS crazy. How come companies don't offer holdays as comp? Here (Sweden) having an extra week holiday (6 rather than 5 weeks) is a common comp.
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?
I suspect that, particularly in the startup arena, time is more valuable than money. VCs are throwing cash at you, but they want you to launch yesterday.
Sure, and I realize good developers are hard to find, but unless you are looking for the 23year old "ninja" type developers who like doing all nighters, would you not need to care about work/life balance of employees too?
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".
It's not part of the culture. People sometimes quietly grouse about the lack of vacation time or the number of hours but no one is willing to publicly do anything about it for whatever cultural reason.
So in this culture, is it common to do a few years of high-income work with 12hr days and high compensation, and then you get a "quieter" job somewhere else when you need a job that allows you to pick the kids up at 4.30pm? Or how does it work? Obviously children aren't unheard of in Silicon Valley, and as far as I understand it's a pretty progressive part of the US, so I assume that families have two careers to worry about? Something doesn't add up if long days are norm.
> is it common to do a few years of high-income work with 12hr days and high compensation
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.
To me that seems insane. With the work I do, at 50 hours, I would be seriously burnt out (I used to be at a previous job). NOT good for the company.
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 ;-)
Thanks for the insights.
Perhaps it is time for companies to compete for talent on these parameters instead? I think I've seen some companies trying to attract talent like that now that I think about it (was it stack exchange perhaps?). I might underestimate the power of the almighty buck here, but I'd take the employer that says "we value work/life balance, when we say 40h/week we mean it literally, we allow remote work, and we have 5 paid weeks off".
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.
> I might underestimate the power of the almighty buck here, but I'd take the employer that says "we value work/life balance, when we say 40h/week we mean it literally, we allow remote work, and we have 5 paid weeks off".
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.
In the past in the pages more than a couple of US developers have described a pattern in which they work for a year or 2, then quit and take 6 months off (living off of savings).
I would suppose that they were single with no dependents.
Yes, but healthcare is a few 100 bucks a month, which we pay too, only for us it's mandatory by government.
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.
I'll reiterate OP and say that these seem low to me as well...and dare I say that I still think Software Developers are underpaid?!
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.
> 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 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.
> You get into work at 8am and you leave work at 8pm
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.
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.
Point taken, I'm sure there are better examples than fast food of companies paying peanuts but earning millions per employee, probably due to huge investments/risks involved. Natural resources and banks come to mind.
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.
"Hard to find developers" just means "Hard to find people who will do X when we pay Y". As for cost of living, if NYC/SF tech companies offer competitive salaries for those areas (like $150k) that must be a fortune for people working remotely from almost anywhere else. So assuming that remote work is quite normal, and the companies accept paying SF salaries to remote workers from everywhere, I can't see how they can fail to find talent.
Depends. Maybe you should get a bonus if your work really has such an impact. And if you talk managing a team, that's not a developer position, that's a lead position (to me anyway).
35-50k€ is low, even for Western European standards. You cannot compare it to US salaries given the enormous differences in social structure when it comes to healthcare etcetera.
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.
Plus, most software engineers I work with every day are hardly nerds. Maybe 1/3 of them are, the rest are just wearing suits without ties but are very professional at their job and attitude.
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.
Here in the US we basically have little or no social safety net, and certainly few meaningful regulations and laws protecting labor. Our "wow just wow" salaries have less buying power than yours, because any difference in the margins is eaten up by having to use the additional salary for basic services you would be able to (mostly) take for granted as being government supplied (via taxation and other means).
Mainly corrupt, well-connected private businesses who take a generous cut of the benefits the government contracts them to distribute, one way or another.
I'm not too sure about that. Yes, if you compare the average American to the average European, you make more and have to pay for more things, so it more or less evens out.
No, it doesn't really even out at all. There are several factors you're neglecting to consider here.
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.
Well, a 50k salary will net you <30k€ in Germany (but more if you have kids). You probably should also save a bit for retirement, since you won't get much from the state (today's retired receive much more than they paid into the fund, but current generations will receive much less). Oh, and we have a 19% sales tax over here (7% on groceries, and food is actually very good and cheap in Germany, at least in stores).
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.
Hey ah guys. Most devs in HK earn < 30k USD a year. China is half that, Taiwan is even worse. When you factor in how freaking expensive everything is in HK, especially real estate, HK devs in general are basically slave labors.
In the U.S. a Software Development(dev, designer, etc.) job is a middle class role. What is a developer in china? Lower class? What is a middleman class job then?
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.
Software dev is definitely a middle class job in China, but in HK, it's only considered marginally better than clerical work. Labor in Greater China for any job other than the most exploitative ones (finance, sales, insurance, legal, upper management) are treated like dirt in general. Don't even get me started on the hours and the lack of benefits and incentives.
An entry level dev in Beijing from Beida/qinghua can easily pull in 20k rmb a month in Beijing (if they don't go abroad for grad school). There is competition for good devs that is pushing up salaries yearly. They are hardly diaosi.
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.
I find that odd. The jobs you mentioned (finance, sales, insurance, legal, upper management), with the exception being upper management, will most likely net you less than what a developer makes here in the U.S.
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.
In Germany, all those jobs you mention will also make more/much more than a developer. I think the tech sector in the US is very strong and competes for devs.
I think I understand this. In both the US and in Germany, a lot of developers -- kids right out of college -- will work for a lot less than the value they add. Too young to know better; nerdy and bad at negotiation.
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.)
In general, I agree with our assessment, but let me add that I constantly got great evaluations by my superiors, but when I asked for a 10% raise they laughed in my face. I don't work there anymore, but other companies also didn't pay much more when I went looking (without acute need).
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).
I'm not sure where you get your numbers but having managed an office in Shanghai I can tell you that is not accurate. These numbers are all translated to USD. Entry level devs were in the 18-20K range. Mid to senior devs were in the 30-35K range and a Director was in the 50-60K range. We had our entry level and mid-range devs hired away for 20% more by eBay or other larger US companies from those numbers. However, in Shanghai, that means your devs are usually commuting for an hour via public transit from the outer ring because you can't actually live in Pudong or Puxi for that kind of money unless your family has been living there already for a long time. And none of our devs were in that position since they were pretty much all from different parts of the country.
You might want to consider Ireland or the UK if your spoken English is as good as your written English. Salaries aren't quite bay area, but they're better than what you describe, especially for a master's!. With 20 days of vacation a year and people who don't take it for granted you'll spend all weekend working I have no intention to return to the US.
That's also quite low. (When I did contractor work (PHP) in the Netherlands almost a decade ago I already charged 500 euro/day, and up to 80 euro/hour for certain gigs.)
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.
Value capture is related to competition, not productivity. You capture value when there are few other alternatives in your space, and so your counterparties have to pay your price or go without.
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 engineers are fungible, and there are many other people on the market who can do the same thing, then why have a guest worker program like H1B?
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
To keep down wages, why else? If you have the choice between an American, who can leave for a better-paid opportunity whenever he likes, and a foreigner, who is chained to his job because of the green card process, who would you hire?
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.
They are low because companies have kept them low (remember the whole conspiracy and law suit against bay area top employers) and individuals take what they get. Seriously compared to other areas and cost of living in the bay, they are really low for smart software engineers.
i agree, despite industry complaints about how "high" they are and how quickly they've risen; having been on multiple sides of this, i think the value that a good engineer adds is still not reflected in compensation, especially in smaller companies (eg, less than a few hundred people); it's part information asymmetry, part culture
Equity "compensation" is only compensation if the equity is actually worth something. At most big companies equity compensation is worth something but generally not even close to 100% of base salary (or even close to it). At (most) startups the equity is a joke that the owners and employees delude themselves into thinking is not one.
One confounding factor not considered here is the number of "senior" engineers with less than 4yr work experience. Seriously, title inflation is just as rampant if not more in the tech sector than wage inflation. So how do you account for Senior Engineer vs here's a job we'll just add this nice title to.
My understanding that seniority had more to do with whether people report to you/you have more experience with the relevant tech stack than the not-Senior Engineers, in terms of being able to produce results. Why exactly does number of years have to be the only metric to measure seniority?
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.
It is completely arbitrary. At our company the entry level developer is "Senior <language> Developer". It is literally the lowest developer title you can have.
It's all over the place. A college dropout who starts a start-up as CTO then fails within the year will apply as a senior. But, it's one of those things where I don't judge a book by its cover in either direction. After talking to the person in the right context there's a certain confidence and deep level of understanding that I expect from senior engineers and it never reflects their years of experience.
Yep, I agree with all of that. A lack of a cut-and-dried definition in terms of years or other objective measurements makes it hard to compile data, but that is exactly how I think of a senior developer.
Engineers are just middle class who didn't get screwed. The real bubble is in the medical industry and Wall Street and it's not gonna pop any time soon.
Some would say that the medical industry isn't seeing a bubble, as much of the inflation in prices and salaries is going straight to the insurance companies - so the real bubble is in Wall Street and Wall Street.
Yes the cost of health care is extremely inflated. However, it is not just insurance companies who benefit from this trend. Doctors' base salary is 189k while investment bank associates (2 years experience) get paid around that with salary and bonus. Most of the doctors I know are millionaires.
If the argument that medical spending cannot continue to keep rising at present rates, then I would argue its a bubble. I also do not believe 'going straight to insurance companies'. Their profit margins are usually around 5% (http://finance.yahoo.com/q/ks?s=UNH+Key+Statistics)
Most interesting takeaway for me is that salaries weren't significantly higher in SF in 2013. As someone living in NYC I always imagined moving to SF/Silicon Valley would give me a big pay bump.
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.
This is biased data. As someone who has mined the LCA data applications, I can say you're absolutely right.
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.
that's really interesting; there are so many caveats with the data that i almost thought it wasn't worth sharing, but we can let people draw conclusions themselves (and hopefully follow-up with other analyses, comments, etc)
if you don't mind, %-wise, how much more were you paid than your LCA? and do you think this is representative of others?
The prevailing wage data does not necessarily reflect what people are actually paid. It is the minimum required salary for the company to be able to apply for a labour certification on behalf of a foreign worker. It is obviously in the company's interest to commit to the lowest salary the DOL will let them get away with for a given level of worker.
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.
To be honest the numbers sound low. This could be because visa holders don't have a lot of leverage when negotiating. I have seen much higher paystubs and offer letters for the listed companies in Seattle. And I imagine the valley and NYC pays more than Seattle despite some companies claiming they don't change pay based on location.
These numbers seem low for just base. $120K in NYC for a senior engineer is low - anecdotally I see it more at $150-170K nowadays.
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.
You know, whenever we get one of these salary articles on HN, there's always one or two people chiming in with vague anecdotes like "That seems really low! Most engineers I know are making $200K+!" or "Company X pays engineers $250K LOL" despite the fact that most responses (backed up by averages from anonymously-reported salaries like Glassdoor) seem to agree that $90-$140K is about average in SF and NYC.
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.
Yeah, it's tough. Especially since everyone inflates their earnings. But this is what I surmised after researching and interviewing at a dozen companies:
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.
Excellent point except for the math mistake! A 10% rent increase in $1000/month rent make the new rent $1100/month, so your total additional cost is $1200/year, not $100/year!
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).
Meh, land is an asset, and they aren't making any more of it. A reasonable person would expect use cost to increase over time, especially in high-population centers like SF and NYC where the game is basically "is someone else as qualified as you willing to pay me more?" -- which is, incidentally, the same game we play with our salaries.
That's why fixed-rate mortgages are so great. Your housing payment is guaranteed not to rise! (taxes notwithstanding)
Slightly OT, but I am wondering what would happen if the landlords were tax at 100% (or even more) on the rent they perceive. I have this weird dream where it wouldn't be profitable to speculate on real estate, and real estate would become a commodity just like cars.
The salary in this example is per year, the rent is per month. So actually a 10% rent increase is $1200 per year and a 1% salary increase is $1000 per year for a net loss of $200.
Got a 17% rent bump on peninsula. Seems rents are in fact rising faster than salaries for tech workers and for non-tech workers this kind of inflation must be unimaginable!
At least if you work for Google (as I do), comp growth seems to stay ahead of costs if your lifestyle doesn't change too much. But if you want to get married and have a kid (and live in a two-bedroom apartment) it starts feeling pretty expensive pretty fast. And housing costs are nuts in NYC (on top of the raw numbers, which might be comparable to SF at the low end, the market is obfuscated by slimy agents and a cheap apartment in NYC can be of shockingly poor quality).
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.
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...
For what it's worth, I work for a company that has offices in both Atlanta (which is probably a relatively low-wage market) and San Francisco. I was given a choice between the two offices (I lived in SF at the time of the offer but was looking to move) and was offered X in Atlanta or about 1.2X in SF.
(I took Atlanta, by the way. The cost of living difference is much larger than 20%.)
How hard is it to get a job in the US for an EU citizen? I've heard that one could wait for up to 2 years for a visa, so most small/middle-sized companies just don't bother and hire only US-based developers. Is it any easier for people with degrees in compsci?
There are actual reported data points underlying this. Likely they are just two similar jobs (maybe even the same one in different time frames) that were reported differently.
agreed -- there's no uniformity in how companies fill out these apps; for example, as I briefly mentioned in the post but didn't look far into, even the company name "Google" was typed in 3 or 4 ways
one piece which i tried to mention here is that salar.ly and LCA don't incorporate equity, incentive bonuses, and other pieces of compensation; this is just the base salary submitted in the application. for example ex-Google friend immediately felt like Google was too low, since a significant % of their comp is tied to incentive bonuses; and for startups, you'd have to consider the dollar value of equity
It looks like Microsoft is the only product company in the top 10 for VISAs. All of the rest are essentially work for hire (and offshore) dev/consulting companies. http://www.salar.ly/statistics
Salary bubble? More like a Salary deficit compared to the cost of living increases. Housing, Health, and Education have all nearly doubled in the last 15 years. My wages certainly didn't double.
Your first article is based on faulty economics. When productivity increases are shared across an industry, nobody in the industry benefits. Instead, the benefits accrue to the customers and complements of the industry. There's a long historical precedent for that - productivity improvements in textile manufacturing destroyed the textile industry, productivity improvements in farming destroyed the small farmer, productivity improvements in fishing destroyed the individual fisherman.
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.
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.
"productivity improvements in farming destroyed the small farmer"
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.
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.
I doubt a union would get much traction as long as the software industry is in as much flux as it is in, and boundaries between engineers, entrepreneurs, and financiers are as porous as they are. It's not uncommon for someone to be an engineer for a few years, a technical cofounder for a few more years, and then a venture capitalist later on. Many, many people in tech (Andreesen, PG, John Doerr, Eugene Kleiner, Bill Joy) have sat in all 3 seats.
This man speaks the truth. Michael has elucidated the the nature of employee/employer relations in tech with surgical precision. Highly recommended.
Particularly, this article [1] about the perceived status of engineers vs. managers solidified my suspicions about the status hierarchies inherent to the industry.
Salary work is a dead end path. The only way to capture your economic value is to put it on the market as a business. I've taken too long to learn this. At a certain point you say to yourself that making the same thing week after week is foolish and you throw yourself into the fire to make it on your own.
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.