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.
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.
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'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.
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.