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What Software Engineers Earn Compared to the General Population

149 points by gkst 10y ago

paulmd 10y ago
It's meaningless to directly compare software engineer salaries with the rest of the general population because our work is a 'force multiplier'. A single software engineer can displace the labor of 10 staff - often permanently. While we're compensated more highly than 1 lower-skilled staff member it's still actually not commensurate with the amount of value we actually deliver. My (unscientific) belief is that we actually capture less of the value we generate than most other staff, out of the sense of "fairness" espoused in this article. This applies at all levels of the spectrum, from a junior developer working at a contracting firm to high-end staff working for Google or whatnot. We wouldn't be paid those salaries if we didn't bring in 5x more than our pay. Apart from that, supply and demand/etc also apply. We're highly-trained staff who often deal with mathematics that the general population can't or won't deal with.
- andreineculau 10y ago
  Value and worthiness are two different things. If a CEO is valued at 12m/y and another one at 6m/y that does not mean one is worth twice as much, nor does he bring in twice more revenue. I hope one day you'll realize that one way or another everyone is worth more or less the same (eg societies need both good software devs, farmers, doctors, teachers, cleaners, carpenters etc) and we are only valued in very extreme ways.
- _yosefk 10y ago
  Erm... How many people are fed by a combine harvester driver? How many babies and mothers are saved by the staff of a modern hospital, who drastically lower child mortality? If 10 future programmers are delivered by a single nurse, should she be paid 10x what a programmer makes? (Supply and demand I get, "force multiplier" I don't get.)
  - paulmd 10y ago
    If a combine harvester allows a farmer to feed as many people as 100 farmers working by hand then they have a force multiplier of 100x. If you can train one nurse to deliver as many babies as 10 normal nurses then they have a force-multiplier of 10x. This doesn't necessarily translate into 10x or 100x the salary - farming is still an extremely capital-intensive business, probably moreso than it was pre-Green Revolution. Tractors and fuel and fertilizer don't buy themselves. There really hasn't been a single improvement that produced a 10x improvement in the number of babies a nurse can deliver. Maybe if someone goes out and invents the robo-midwife, but I can't see that being real popular... The other way you can go is a qualitative improvement, which is where the child mortality example comes in. If one engineer can remove 75% of the fuck-ups caused by manually performing a task, then that is also worth money, but it's not valued in quite the same way. You'd value lower child-mortality in person-years of economic output (accrued to society), quality-adjusted-life-years (accrued to the individual) and diminished malpractice suits/insurance (accrued to the hospital or the insurance company). Perhaps a better term would be "productivity multiplier". Productivity is a pretty standard economic measure (average economic output per individual), and engineers both have much higher economic output per individual, and can greatly increase that output for other individuals as well (often with a one-time investment).
    - imtringued 10y ago
      The business doesn't care. They try to narrow down the potential employees to those who can do the job and then pick the cheapest.
    - _yosefk 10y ago
      I got that "force multiplier" had to do with productivity, but I didn't get how compensation is supposed to be set as a function of productivity (as opposed to supply and demand, and/or arbitrary rules), or even why it should be. Certainly (and thankfully, for those of us buying their food) a combine harvester driver does not get paid 100x the compensation of a farmer who harvested before combine harvesters were invented (of course the driver neither invented nor manufactured the combine harvester; well, a programmer neither invented nor made computers - or compilers, or most of the ideas they apply.) I kind of believe, I think not controversially, that compensation results from supply, demand, and a bunch of more or less arbitrary rules which either affect supply & demand or directly affect the price (price controls, visa regimes, etc.) Productivity (value created) sets an upper bound for compensation (well, actually, it doesn't, perceived productivity does; and even that isn't true - building a barely working website for the government for several hundreds of millions of dollars is one of the countless counter-examples), but productivity certainly does not set a lower bound for compensation - competition does. How much labor you save is beside the point.
- pcurve 10y ago
  I don't think anyone is going to agree with you here on this board, but there are plenty of average or substandard software engineers that also along for the ride that do not pull their weight. I'm taking this study at its face value, and it is quite interesting.
dudul 10y ago
Am I the only who thinks that the "average income" in a country is a meaningless metric? Depending on the area (e.g. big city, desirable area, etc) average salaries and cost of living may be very different. It is easy to see in the US for example.
- turnip1979 10y ago
  You are quite right. I never had an idea how immobile I would be as a tech worker. The best tech jobs are concentrated in a few, high cost of living cities. While we can work remote, the quality of the career opportunities are not the same.
frogpelt 10y ago
Is it meaningful to compare the median annual income of software engineers to the average annual income of the general population? I'm legitimately curious, what is the statistical significance of an average versus a median?
- goldbrick 10y ago
  It's a mistake to compare the two -- statistics 101.
  - frogpelt 10y ago
    So, I guess the point of the notebook was probably not the statistics but the scraping and plotting of the data. And furthermore, the author just used the data that Bloomberg used here: http://www.bloomberg.com/visual-data/best-and-worst/highest-paid-software-engineers-countries http://www.bloomberg.com/visual-data/best-and-worst/highest-...
- eterm 10y ago
  "average income" as reported is usually the median. Edit: I'm not sure why I'm getting downvotes. Anywhere you read about average incomes from a serious source it'll be the median, no one uses "mean income" for average when dealing with incomes, since the distribution is so skewed. If you even just google "average income" it'll report you the median. Median is so completely standard when reporting on income data that it gets short-handed to "average".
  - dionidium 10y ago
    Anywhere you read about average incomes from a serious source it'll be the median, no one uses "mean income" for average when dealing with incomes This is demonstrably untrue. A search for "average income" returns articles referencing both median and mean incomes (and usually clearly distinguishing between the two).
  - pessimizer 10y ago
    We're on the internet, you can link to examples if it is true.
option_greek 10y ago
While this is interesting, its conclusions should be taken with a grain of salt as the average median income of general population in India tends to be aggressively underestimated. This is because less than 5% of the populace pays/declares tax. The ones in private/government employment happens to be the ones paying tax while any one having "business" income tend to lets say "downplay" their income to get various subsidies or to just hoard money.
- emodendroket 10y ago
  They're relying on voluntarily self-reported data, often collected by essential coercion ("please enter your salary to see the averages") so I doubt it's extremely accurate in any country
TrickedOut 10y ago
I really detest when software engineer salaries are compared to the salaries of the general population (often to cite how our sector is "overpaid"). Usually lacking from such simple comparisons: 1. Discussion of how software engineers have to go to college for 4 to 6+ years, but the general population is weighted towards those far fewer years of schooling 2. Discussion of downtime -- the amount of time software engneers spend unemployed (due to economic cycle, startup bankruptcy, downsizing, etc.) compared to the general population (e.g., government workers for example have superb job security, often 100% lifetime job security.)
- gkst 10y ago
  Does it make any sense to you to compare a particular group to the general population then? I think it does, the insights you may draw from such a comparisons are obviously different than comparing two sub-groups, e.g. programmers vs. doctors for example. Also the article doesn't judge the differences of incomes, the "overpaid" is your interpretation.
- distances 10y ago
  Did you check the article, though? In quite many European countries the median software engineer earns less than the average salary. I wonder if they meant "median salary" instead, as median vs. median would seem a better comparison than median vs. average.
- V-2 10y ago
  A lot of software engineers are autodidacts and never graduated in IT. I didn't (I have an MA in politics, obviously irrelevant to my profession). In general unemployment in IT is very low, and there's always a shortage of programmers, so job security is clearly above average. (And government administrations have IT departments, too). It's supply vs. demand, that's all there is to it. I'm not buying any of the above as a justification for big salaries.
  - ghaff 10y ago
    >It's supply vs. demand, that's all there is to it. Yup. There may be good demand because of force multiplier or return to capital or whatever. (Which are just ways of saying that the work translates into something people are willing to pay for.) And there may be (somewhat) limited supply because it's not something everyone wants to or can do, whether through formal education or otherwise. But, take either supply or demand away and the salaries commanded adjust accordingly. That I could spend 10 years becoming an expert on medieval German literature doesn't necessarily mean that I could command a high salary however rare that expertise.
z92 10y ago
Comparing software engineer's salary with other graduate's salary would have been more meaningful. Instead of with general population.
- emodendroket 10y ago
  There is no requirement that you have a degree to be a software engineer.
agentgt 10y ago
I didn't find the data to be very compelling but the real world example with Pandas and D3 very helpful. Probably irrelevant but I feel the article should probably be titled differently like "Using Pandas and D3 to get a rough....." as I'm not sure many good conclusions can be drawn from that dataset (I could be vastly wrong though?).
carlob 10y ago
Yay for Italy! Where not only software developers are paid less than the general population, but also where the real wages of everyone are very low compared to the cost of living of other European countries!
carlob 10y ago
Yay for Italy! Where not only software developers are paid less than the general population, but also where the real wages of everyone are very low compared to the cost of living of other European countries!
joesmo 10y ago
The data for Romania is completely incorrect or the OP just fucked up his analysis royally. You're talking about a country where the average national wage is just shy of $500 a month (https://www.reinisfischer.com/average-salary-european-union-2014 https://www.reinisfischer.com/average-salary-european-union-...) and software engineers are making well over a thousand and sometimes thousands a month. See: http://www.developer.com/daily_news/romanian-developers-earn-five-times-as-much-as-average-workers.html http://www.developer.com/daily_news/romanian-developers-earn... I don't care what numbers or technique he used, it's impossible to come to the conclusion that software engineers in Romania actually make less than the average salary. It's also just plain wrong.
donquichotte 10y ago
Peculiarly, in Romania, the median income of a software dev is 0.7 times the average income whereas in neighbouring Bulgaria, the factor is 3.2. Does anybody have an idea why?
- bluetomcat 10y ago
  The dataset probably has a huge error margin. In my observations, the factor in Bulgaria is almost 4 and in Romania it is something like 3-3.2.
nowey 10y ago
I'm in the 90th percentile in household salary in my country. I'm single so double my salary to accomodate the 2.5 people living on average, and I jump to to the 93rd percentile.
foobarrio 10y ago
I clicked around the PayScale and IMF pages and could not find how they define "Software Engineer". Is this the same as "Programmer" or "Software Developer"? These titles are quite broad in some places. For example where I sit now, we are all "programmers". However one of our programmers is a CPA + some other certs and spends as much time talking to accountants, lawyers, reading IRS notices as she does spec'ing out and developing software. Is she a "Software Engineer"? I spend most of my time fixing bugs and operating our software systems does that make me a "Software Engineer"? I program a lot sometimes but I'd hardly call what I do engineering. I'm in the U.S. and we don't have formal engineering accreditation for software.
ThomaszKrueger 10y ago
The use of the term Engineer is very unfortunate. In many places (Texas and Florida come to mind) one cannot claim to be or perform the functions of Engineering without being properly licensed and member of a board of professional engineers.
- khedoros 10y ago
  If I engineer software, then I can be described as a software engineer. I couldn't be described as a licensed PE (because I'm not and don't claim to be). The fact remains that "software engineer" is a common industry term. What is unfortunate is FUD from various Boards of Professional Engineers trying to appropriate the term for their sole use.

149 points by gkst 10y ago

It's meaningless to directly compare software engineer salaries with the rest of the general population because our work is a 'force multiplier'. A single software engineer can displace the labor of 10 staff - often permanently. While we're compensated more highly than 1 lower-skilled staff member it's still actually not commensurate with the amount of value we actually deliver. My (unscientific) belief is that we actually capture less of the value we generate than most other staff, out of the sense of "fairness" espoused in this article. This applies at all levels of the spectrum, from a junior developer working at a contracting firm to high-end staff working for Google or whatnot. We wouldn't be paid those salaries if we didn't bring in 5x more than our pay. Apart from that, supply and demand/etc also apply. We're highly-trained staff who often deal with mathematics that the general population can't or won't deal with.

andreineculau 10y ago
Value and worthiness are two different things. If a CEO is valued at 12m/y and another one at 6m/y that does not mean one is worth twice as much, nor does he bring in twice more revenue. I hope one day you'll realize that one way or another everyone is worth more or less the same (eg societies need both good software devs, farmers, doctors, teachers, cleaners, carpenters etc) and we are only valued in very extreme ways.
_yosefk 10y ago
Erm... How many people are fed by a combine harvester driver? How many babies and mothers are saved by the staff of a modern hospital, who drastically lower child mortality? If 10 future programmers are delivered by a single nurse, should she be paid 10x what a programmer makes? (Supply and demand I get, "force multiplier" I don't get.)
- paulmd 10y ago
  If a combine harvester allows a farmer to feed as many people as 100 farmers working by hand then they have a force multiplier of 100x. If you can train one nurse to deliver as many babies as 10 normal nurses then they have a force-multiplier of 10x. This doesn't necessarily translate into 10x or 100x the salary - farming is still an extremely capital-intensive business, probably moreso than it was pre-Green Revolution. Tractors and fuel and fertilizer don't buy themselves. There really hasn't been a single improvement that produced a 10x improvement in the number of babies a nurse can deliver. Maybe if someone goes out and invents the robo-midwife, but I can't see that being real popular... The other way you can go is a qualitative improvement, which is where the child mortality example comes in. If one engineer can remove 75% of the fuck-ups caused by manually performing a task, then that is also worth money, but it's not valued in quite the same way. You'd value lower child-mortality in person-years of economic output (accrued to society), quality-adjusted-life-years (accrued to the individual) and diminished malpractice suits/insurance (accrued to the hospital or the insurance company). Perhaps a better term would be "productivity multiplier". Productivity is a pretty standard economic measure (average economic output per individual), and engineers both have much higher economic output per individual, and can greatly increase that output for other individuals as well (often with a one-time investment).
  - imtringued 10y ago
    The business doesn't care. They try to narrow down the potential employees to those who can do the job and then pick the cheapest.
  - _yosefk 10y ago
    I got that "force multiplier" had to do with productivity, but I didn't get how compensation is supposed to be set as a function of productivity (as opposed to supply and demand, and/or arbitrary rules), or even why it should be. Certainly (and thankfully, for those of us buying their food) a combine harvester driver does not get paid 100x the compensation of a farmer who harvested before combine harvesters were invented (of course the driver neither invented nor manufactured the combine harvester; well, a programmer neither invented nor made computers - or compilers, or most of the ideas they apply.) I kind of believe, I think not controversially, that compensation results from supply, demand, and a bunch of more or less arbitrary rules which either affect supply & demand or directly affect the price (price controls, visa regimes, etc.) Productivity (value created) sets an upper bound for compensation (well, actually, it doesn't, perceived productivity does; and even that isn't true - building a barely working website for the government for several hundreds of millions of dollars is one of the countless counter-examples), but productivity certainly does not set a lower bound for compensation - competition does. How much labor you save is beside the point.
pcurve 10y ago
I don't think anyone is going to agree with you here on this board, but there are plenty of average or substandard software engineers that also along for the ride that do not pull their weight. I'm taking this study at its face value, and it is quite interesting.

dudul 10y ago

Am I the only who thinks that the "average income" in a country is a meaningless metric? Depending on the area (e.g. big city, desirable area, etc) average salaries and cost of living may be very different. It is easy to see in the US for example.

turnip1979 10y ago
You are quite right. I never had an idea how immobile I would be as a tech worker. The best tech jobs are concentrated in a few, high cost of living cities. While we can work remote, the quality of the career opportunities are not the same.

frogpelt 10y ago

Is it meaningful to compare the median annual income of software engineers to the average annual income of the general population? I'm legitimately curious, what is the statistical significance of an average versus a median?

goldbrick 10y ago
It's a mistake to compare the two -- statistics 101.
- frogpelt 10y ago
  So, I guess the point of the notebook was probably not the statistics but the scraping and plotting of the data. And furthermore, the author just used the data that Bloomberg used here: http://www.bloomberg.com/visual-data/best-and-worst/highest-paid-software-engineers-countries http://www.bloomberg.com/visual-data/best-and-worst/highest-...
eterm 10y ago
"average income" as reported is usually the median. Edit: I'm not sure why I'm getting downvotes. Anywhere you read about average incomes from a serious source it'll be the median, no one uses "mean income" for average when dealing with incomes, since the distribution is so skewed. If you even just google "average income" it'll report you the median. Median is so completely standard when reporting on income data that it gets short-handed to "average".
- dionidium 10y ago
  Anywhere you read about average incomes from a serious source it'll be the median, no one uses "mean income" for average when dealing with incomes This is demonstrably untrue. A search for "average income" returns articles referencing both median and mean incomes (and usually clearly distinguishing between the two).
- pessimizer 10y ago
  We're on the internet, you can link to examples if it is true.

option_greek 10y ago

While this is interesting, its conclusions should be taken with a grain of salt as the average median income of general population in India tends to be aggressively underestimated. This is because less than 5% of the populace pays/declares tax. The ones in private/government employment happens to be the ones paying tax while any one having "business" income tend to lets say "downplay" their income to get various subsidies or to just hoard money.

emodendroket 10y ago
They're relying on voluntarily self-reported data, often collected by essential coercion ("please enter your salary to see the averages") so I doubt it's extremely accurate in any country

TrickedOut 10y ago

I really detest when software engineer salaries are compared to the salaries of the general population (often to cite how our sector is "overpaid"). Usually lacking from such simple comparisons: 1. Discussion of how software engineers have to go to college for 4 to 6+ years, but the general population is weighted towards those far fewer years of schooling 2. Discussion of downtime -- the amount of time software engneers spend unemployed (due to economic cycle, startup bankruptcy, downsizing, etc.) compared to the general population (e.g., government workers for example have superb job security, often 100% lifetime job security.)

gkst 10y ago
Does it make any sense to you to compare a particular group to the general population then? I think it does, the insights you may draw from such a comparisons are obviously different than comparing two sub-groups, e.g. programmers vs. doctors for example. Also the article doesn't judge the differences of incomes, the "overpaid" is your interpretation.
distances 10y ago
Did you check the article, though? In quite many European countries the median software engineer earns less than the average salary. I wonder if they meant "median salary" instead, as median vs. median would seem a better comparison than median vs. average.
V-2 10y ago
A lot of software engineers are autodidacts and never graduated in IT. I didn't (I have an MA in politics, obviously irrelevant to my profession). In general unemployment in IT is very low, and there's always a shortage of programmers, so job security is clearly above average. (And government administrations have IT departments, too). It's supply vs. demand, that's all there is to it. I'm not buying any of the above as a justification for big salaries.
- ghaff 10y ago
  >It's supply vs. demand, that's all there is to it. Yup. There may be good demand because of force multiplier or return to capital or whatever. (Which are just ways of saying that the work translates into something people are willing to pay for.) And there may be (somewhat) limited supply because it's not something everyone wants to or can do, whether through formal education or otherwise. But, take either supply or demand away and the salaries commanded adjust accordingly. That I could spend 10 years becoming an expert on medieval German literature doesn't necessarily mean that I could command a high salary however rare that expertise.

z92 10y ago

Comparing software engineer's salary with other graduate's salary would have been more meaningful. Instead of with general population.

emodendroket 10y ago
There is no requirement that you have a degree to be a software engineer.

agentgt 10y ago

I didn't find the data to be very compelling but the real world example with Pandas and D3 very helpful. Probably irrelevant but I feel the article should probably be titled differently like "Using Pandas and D3 to get a rough....." as I'm not sure many good conclusions can be drawn from that dataset (I could be vastly wrong though?).

carlob 10y ago

Yay for Italy! Where not only software developers are paid less than the general population, but also where the real wages of everyone are very low compared to the cost of living of other European countries!

carlob 10y ago

joesmo 10y ago

The data for Romania is completely incorrect or the OP just fucked up his analysis royally. You're talking about a country where the average national wage is just shy of $500 a month (https://www.reinisfischer.com/average-salary-european-union-2014 https://www.reinisfischer.com/average-salary-european-union-...) and software engineers are making well over a thousand and sometimes thousands a month. See: http://www.developer.com/daily_news/romanian-developers-earn-five-times-as-much-as-average-workers.html http://www.developer.com/daily_news/romanian-developers-earn... I don't care what numbers or technique he used, it's impossible to come to the conclusion that software engineers in Romania actually make less than the average salary. It's also just plain wrong.

donquichotte 10y ago

Peculiarly, in Romania, the median income of a software dev is 0.7 times the average income whereas in neighbouring Bulgaria, the factor is 3.2. Does anybody have an idea why?

bluetomcat 10y ago
The dataset probably has a huge error margin. In my observations, the factor in Bulgaria is almost 4 and in Romania it is something like 3-3.2.

nowey 10y ago

I'm in the 90th percentile in household salary in my country. I'm single so double my salary to accomodate the 2.5 people living on average, and I jump to to the 93rd percentile.

foobarrio 10y ago

I clicked around the PayScale and IMF pages and could not find how they define "Software Engineer". Is this the same as "Programmer" or "Software Developer"? These titles are quite broad in some places. For example where I sit now, we are all "programmers". However one of our programmers is a CPA + some other certs and spends as much time talking to accountants, lawyers, reading IRS notices as she does spec'ing out and developing software. Is she a "Software Engineer"? I spend most of my time fixing bugs and operating our software systems does that make me a "Software Engineer"? I program a lot sometimes but I'd hardly call what I do engineering. I'm in the U.S. and we don't have formal engineering accreditation for software.

ThomaszKrueger 10y ago

The use of the term Engineer is very unfortunate. In many places (Texas and Florida come to mind) one cannot claim to be or perform the functions of Engineering without being properly licensed and member of a board of professional engineers.

khedoros 10y ago
If I engineer software, then I can be described as a software engineer. I couldn't be described as a licensed PE (because I'm not and don't claim to be). The fact remains that "software engineer" is a common industry term. What is unfortunate is FUD from various Boards of Professional Engineers trying to appropriate the term for their sole use.