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Remote software developers earn more than non-remote developers

• JackPoach 7y ago
  I think that it's cause and effect issue. Developers who've proven themselves to be reliable and experienced can 'force' their preferences onto employers. And they happen to cost more as well. I don't believe that going remote magically makes you able command higher salary.
  • ikeyany 7y ago
    Yes, but if the headline said "Experienced developers tend to have more freedom, like the ability to work remotely", we wouldn't click on this thread and talk about it.
    • CodeSheikh 7y ago
      I agree with you. Title is misleading.
  • whoisnnamdi 7y ago
    Author here Agreed, which is why I didn't say,"working remote causes developers to earn 22% more", only that developers who work remote earn 22% more, which is an interesting fact in itself. Early in the article I adjust this for various controls to better get at causality. This includes observable factors like age, years of experience, hours worked, size of employer, programming languages used, etc. As I note in the article: >Much of the apparent premium earned by remote developers is in fact driven by seniority and tenure. These are older, more experienced developers who either prefer to work remote or whose organizations grant them that privilege. However, controlling for manually selected factors doesn't imply causality, so I use principled covariate selection to select the best set of controls and get closer to something that could be called causal. You can read more about this method, called Double Lasso Selection, in Urminsky, Hansen, and Chernozhukov [0]. This results in an adjusted pay premium of 9.4% for remote developers relative to those that never work remote. Hard to know for sure if this is causal either, but it's likely much closer to whatever the true causal impact is. Unsurprisingly, it's a lower number. Thanks for reading! [0] http://home.uchicago.edu/ourminsky/Variable_Selection.pdf http://home.uchicago.edu/ourminsky/Variable_Selection.pdf
    • wbc 7y ago
      very cool! any thoughts on where that premium comes from, since we're controlling for the standard stuff?
      • dx034 7y ago
        Pure speculation, but maybe you have to look around or negotiate to find remote work? Those who tend to do that probably also get better salaries than those that stick with one job for very long or don't compare much when looking for jobs.
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      • thinkharderdev 7y ago
        One possibility is that remote developers are just more productive (or if you prefer, more productive developers are more able to negotiate a remote working allowance from their employer). In standard economic theory, the equilibrium wage is at the workers marginal revenue product (or the marginal revenue that their work produces for the organization). So you would expect remote workers to either earn more because they are more productive or, if remote work makes you more productive, to earn more as a result of working remotely and being more productive
    • whack 7y ago
      > Early in the article I adjust this for various controls to better get at causality. This includes observable factors like age, years of experience, hours worked, size of employer, programming languages used, etc. There are likely many other factors which aren't "observable" by your methodology, which are causing the 9.4% pay-premium. Factors like competency, domain knowledge, and how essential they are to the organization. I find it much more believable that these unobservable factors are causing both the pay-premium, and working-remote flexibility. This is a common problem that comes up in such studies. Adjusting for various observable factors is great, but it still leaves behind the other unobservable factors. At which point you have to use your judgement to figure out whether those unobservable factors are more compelling than the hypothesis being tested. That said, this is still a very cool analysis that demonstrates an interesting correlation. Thanks for sharing!
  • duxup 7y ago
    Even as a noob it plays out that way, I've only been coding for a couple years. First I was in the office all the time, then I started working from home maybe one day a week.... After everyone got comfortable with me and I proved I could produce my pay increased dramatically, and at the same time work from home turned into 3-5 days a week. Trust, pay, and working from home and / or remote all are generally related I think.
  • A4ET8a8uTh0 7y ago
    You may be onto something. Before Covid managers at my place considered remote work a reward for good behavior and delivering results. Needless to say, those people also tended to get better reviews and salaries.
  • jdxcode 7y ago
    I don't even think it's that complicated. Organizations that offer remote usually won't do it for interns and junior engineers and it probably isn't great for those engineers anyways. If you just took out all these engineers I wouldn't be surprised if the average jumps by 22%.
    • atmosx 7y ago
      Yes. Most remote positions, clearly state the "prior remote work experience" is greatly appreciated or even required. Remote usually means more not less work, so there's that too.
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  • zbobet2012 7y ago
    As a manager and software engineer, Seniority is also implicitly more about _independence_ than _capability_. This is something Junior engineers are often confused about. Its easier to hire, or let a senior work at home, because generally, they have a much stronger track record of "not becoming blocked" and "not needing someone to prioritize tasks" etc. In short, its less about "forcing" preferences, and more about managements have seen this person execute with less oversite. Which is almost definitionally seniority. A lot of you will respond to this "I don't need oversite to get things done" and a lot of you will be wrong. Because a lot of engineers need oversite to get _the right things_ done.
    • bg4 7y ago
      Independence, proficiency, and good judgement.
    • deleted 7y ago
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    • tasuki 7y ago
      Generally agreed, just wanted to point out that "oversite" is "a layer of concrete used to seal the earth under the ground floor of a house", while "oversight" is "the action of overseeing something". So yes, a lot of civil engineers need oversite to get the right things done :)
    • kradroy 7y ago
      Independence and reliability are both driving factors for me as a manager. I have a junior dev with 2 years experience and he had to move due to family situation. He asked for permission earlier this year, and I didn't hesitate in saying yes. There are some "almost senior" devs on the team I would have told to walk, if they had made the same request.
  • johnlbevan2 7y ago
    Another factor may be subjective vs absolute data points in the source. "Do you work from home more than 50% of your working hours?" has a simple yes/no answer. "What is your salary, including average annual bonus, after tax?" has a single numeric answer. "How many years have you been a developer?" sounds simple; but has interpretation issues. Do I count from my first line of code when playing as a kid, my first computer science class, my first paying job as a developer, or some other time? If this is a measure of seniority (e.g. we define senior as anyone who's been coding for 10+ years) there will be a mixed bag. This may mean that despite trying to factor out variables they're hiding in the noise of bad data; so may still have a hand in the result. i.e. Those developers who've counted 9 years developing from their first salaried job and now earn more and work from home are in the same group as those who've just graduated but counted their time coding from their 8-year-old-self's first foray who are in their first year of the job, and thus on lower salary and less perks.
  • yibg 7y ago
    Don’t we also expect to see this result just by the fact the remote employees working for say Bay Area companies get closer to Bay Area comp then low cost of living level comp? On average then you’ll get a higher average salary for remote employees because non remote employees includes a large number of people outside of Seattle, Bay Area, New York etc.
  • baybal2 7y ago
    I also see that as a much simpler explanation, you don't hire unproven people on remote. A higher portion of remotes are temps, and/or having to incorporate in their countries, and carry the burden of doing paperwork.
  • FpUser 7y ago
    Myself being remote and developing mostly products from scratch I completely agree with your conclusion based on my own experience.
  • k__ 7y ago
    Multiple reasons. Choosing the best offer world wide may end up in better pay that choosing the best offer in town.
  • netcan 7y ago
    ...and other nonlinear cause-effect things. Working from home is a "benefit," and it can be demanded by developers with more leverage. They can also demand more money.
  • ccktlmazeltov 7y ago
    Or what about location? I know a lot of remote workers who go live in countries that are much cheaper where they couldn't find a job that would pay like this.
  • zerr 7y ago
    It lets me escape the local (underpaid) market. That's why I won't work for Gitlab, Mozilla or similar company which pays based on the location, not contribution.
  • ahallock 7y ago
    Exactly. Working remotely by itself doesn't lead to higher pay; it's only a perk of an employee with leverage.
• alexpetralia 7y ago
  Does the author control for geography? Surely remote workers in Europe working for American employers will earn more than their non-remote counterparts, but not the reverse. (EDIT) I see the author in the original post subset only for US-based workers: "The survey is global, but here I focus on 10,355 U.S. based individuals employed as software engineers on either a part-time, full-time, or independent basis"
  • whoisnnamdi 7y ago
    Author here Yes the results include only the U.S. but do not include more granular controls for regions within the U.S. So it's possible that this is biasing the results. That said, I do control for size of company, which often correlates strongly with region (both big tech companies and startups tend to employ most of their workforce from a certain region, i.e. west coast). I acknowledge this is imperfect though
    • jt2190 7y ago
      Awesome analysis. Thanks for sharing this @whoisnnamdi > 10,355 U.S. based individuals employed as software engineers on either a part-time, full-time, or independent basis I'm unclear how you're controlling for employment-type pay differences, which can be significant. Independent (1099) workers pay 100% of U.S Federal Income Tax, whereas Employees pay 50%. (Same thing for extra costs, like health insurance, retirement plans, etc.) Edit: I suppose size of employer might be one way to do it.
      • whoisnnamdi 7y ago
        Thank you! Yes this is an important point. I don't mention it there, but I do control for full-time vs part-time vs. self-employed in my analysis. I'll cover this in a coming post, but full-time and self-employed developers make very similar amounts on average, with a slight benefit for full-time employed. I cannot control for the tax effects unfortunately, as I have no data on taxes paid.
        • 7y ago
• dhd415 7y ago
  Though I would love for this to be causal, this analysis needs to control for the experience level of the developer. IME, developers who work remotely tend to be more on the experienced end of the spectrum.
  • OJFord 7y ago
    > Even once I control for various observable factors (including age, experience, hours worked, size of employer, programming languages, and more) (Note 'experience')
• mywittyname 7y ago
  Could this be selection bias? Better developers have their choice of companies, and it makes sense that they would prefer WFH over working in an office.
  • alexpetralia 7y ago
    The results are also selected from a StackOverflow survey. It is hard to tell if SO survey respondents overrepresent higher-earning remote workers or not.
    • wainstead 7y ago
      Yup, this comment should be at the very top. The first problem with this analysis of job salaries is it's based on a self-selected survey and not a random sample.
  • thedevelopnik 7y ago
    I prefer working in an office, but do work somewhere that I have the option of WFH when I want to (pre-COVID, we’re all remote now). I felt I had my choice of company when I was job searching last. Its just not universal that talented people want to WFH. I live 1.5 miles from the downtown of my city, in a residential neighborhood. We have parks and space and I can still ride my bike to work and engage with colleagues face to face as I prefer.
• alextheparrot 7y ago
  Would be interested if there is a company bias being seen here — a lot of the larger tech companies both pay more and, from my experience, are more flexible with working arrangements than traditional big companies. My intuition is especially piqued by the fact that the author says the initial foray into remote work is where most of the effect is seen. Most of my peers and my experience is that working remotely once a week or so is not at all uncommon.
• eloff 7y ago
  If you work as a software engineer outside of a handful of cities, you earn much less. E.g. a software engineer working in Tulsa makes a lot less than one working in San Francisco. But if you work remote from Tulsa, you can work for a company in one of the top cities and will make a higher salary, on average than your local peers. I don't think remote workers in the valley make more than their peers - maybe less. I've worked remote my whole career, and the main reason I do that is I get a substantially higher salary than my local peers because I don't live in the USA.
  • Consultant32452 7y ago
    This is similar to my anecdote. I hit the local salary ceiling but was unable to move due to family obligations. That's how I became a remote worker.
  • cgh 7y ago
    Yes, I've said exactly this a bunch of times. My advice to young programmers is always this: work for a while in a city with high salaries and lots of demand, then after some years when you are experienced and high value (genuinely so), make the jump to remote, move to a smaller, less expensive place and buy a house. I honestly think this is the best life advice I can give and I wish I'd done it a decade sooner than I did.
  • JMTQp8lwXL 7y ago
    If anybody living in Tulsa can do this, the arbitrage opportunity will at some point end and Tusla will get more expensive and SF less expensive.
    • inapis 7y ago
      Not true. Not everyone is cut out for remote work. It needs a certain set of skills and a frame of mind which are not available to everyone or take time to develop.
    • eloff 7y ago
      Except that for whatever reason people don't do this so the advantage continues to exist. Possibly because there aren't enough remote jobs?
• lazyant 7y ago
  Makes sense to me, in my company we allow for senior developers to be remote but not for junior ones, since they need more hand-holding, so there's a correlation between experience and being remote.
  • Insanity 7y ago
    Same at my company. We actively looked for senior developers for this reason.
  • iso1631 7y ago
    Who handholds the junior developers?
    • lazyant 7y ago
      Not all the seniors are remote.
      • iso1631 7y ago
        So that splits the responsibilities of seniors I was helping a junior (well more-junior) earlier with a problem. Had a quick look, then did a video call, drew a diagram on my whiteboard, job done, 5 minutes. Wouldn't have been possible in the office.
  • globular-toast 7y ago
    Who holds their hands if the seniors are remote?
    • kradroy 7y ago
      You can certainly hold hands over Skype/zoom/Slack. I don't think there's a physical proximity requirement for hand-holding.
      • globular-toast 7y ago
• dep_b 7y ago
  In 2nd / 3rd world countries a developer earns a good salary when they're paid (depending on the country) something like US$1500 per month. If you can charge US$25 per hour remote freelance to US clients instead you're earning 2,5 times as much and then you're still dirt cheap. Also most employment is in NY or SF, people that work remotely for companies in those cities usually don't say "oh just pay me less because I'm dialing in from Nebraska" unless their CV's are weak. Working remote means having access to the best paid jobs while the local market is only interesting if you're living in a select group of cities.
  • chrisseaton 7y ago
    > Also most employment is in NY or SF Is this true? This article says over 4 million software developers in the US, and less than a million in the entire of California and New York state. It says there's more employment in Texas than New York. https://www.daxx.com/blog/development-trends/number-software-developers-world https://www.daxx.com/blog/development-trends/number-software...
    • dx034 7y ago
      The fancy big tech or tech startup jobs might be concentrated in CA and NY, overall jobs aren't. Nearly all companies have developers, so does every region with large companies.
• deleted 7y ago
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• bitwize 7y ago
  Yes, because you have to have a proven track record of being damn good, hence too valuable to let go, in order to get the leverage to ask your boss to work remotely full time. Most of us coding schlubs will still be expected to show up at the office at 9 a.m. sharp. That won't change, barring something like coronavirus.
• chadash 7y ago
  Of course. Remote developers tend to be more senior. Once you control for that, I'd be surprised if this still holds true, given that the FAANGs tend to pay a high share of the highest salaries and they tend to not allow remote work.
  • buckminster 7y ago
    You're probably right, but consider the other side. If you remove the FAANGs from consideration (a heavy weight on the non-remote side of the scales) then the remote work premium would look even better.
  • whoisnnamdi 7y ago
    Author here Thanks, yes this is an important point which I cover later in the analysis: "Even once I control for various observable factors (including age, experience, hours worked, size of employer, programming languages, and more), fully-remote software developers earn 9.4% more than developers who never or only rarely work remotely."
• deleted 7y ago
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• mabbo 7y ago
  A friend of mine works/worked for <large company> in Seattle. He's a really talented guy, probably on his way to Principle Engineer in the near future. He's also pretty critical to some major work they're doing. I'm certain he's paid well for it. He told his boss he was moving to Montreal. Most other developers, if they said that the boss would probably have said "well, it's been great working with you". But my friend was a critical employee. Can't lose that guy. Somehow, they found a way to let him be a remote developer from Montreal. Still doing great work. Still being paid well, I imagine. And this is all pre-pandemic. Correlation does not imply causation. Being allowed to be a remote developer and being paid well are both signs that you might just be critical to your organization.
  • whoisnnamdi 7y ago
    Author here I think this is a quite common story, or at least I've heard it a few times now so it feels that way: (1) Senior, important developer decides they want to change locations. (2) Boss can't afford to lose them. (3) So boss let's them work from wherever they want. This of course leads to natural correlation between working remote and skill, which would further correlate to earnings. Replacing a good software developers is non-trivial. That said, to quote from the analysis: Even once I control for various observable factors (including age, experience, hours worked, size of employer, programming languages, and more), fully-remote software developers earn 9.4% more than developers who never or only rarely work remotely.
    • mabbo 7y ago
      I guess the problem is that the analysis can't find a variable for "is critical". I know lots of people with age, experience, hours worked, etc, that are not critical. I can think of a few that are exactly the opposite of critical. The only decent variable to measure whether someone is critical is their salary. But your anlaysis makes it sound as though [remote -> high salary], when really [high salary -> critical] and [remote -> critical].
      • lostcolony 7y ago
        I'd go so far as to say that critical and valuable are not necessarily the same thing. I'd like to think I'm valuable; I go out of my way to not be critical. Intentional knowledge shares, documentation, mentoring, etc, plus focusing on writing systems that are fault tolerant, means that I could leave and it -should- be a minor hiccup. Heck, almost an entire team left along with me at one point in my career, and the projects we left behind just...kept working, no issues. Doubt that company is actually looking to figure them out so they can extend/support them should something need changing, but that's on them.
• nobody0 7y ago
  Because there are much more senior positions than junior ones in remote space.
• conformist 7y ago
  It's nice that the article controls for many reasonable variables. Of course, there could be other confounding factors (like the employer's trust, perhaps location, etc.), but those may be hard to quantify. I think, it's interesting to think about the reverse. "Developers that earn more are more likely to work from home". I'm curious whether this still holds for the very best payed and very worst payed? There could be other effects kicking in the tails of the distribution?
• sq1020 7y ago
  Has anyone else noticed that jobs that are advertised as remote on sites like weworkremotely pay substantially less than regular on-site jobs? Whereas if you start a position on-site, do well, gain the trust of the employer and then go remote, then I can believe the argument of the article.
  • dx034 7y ago
    I guess that depends what your base line is. While SV is over-represented here, it's only a tiny fraction of the global developer market. The salary of many remote jobs could exceed local levels for the vast majority while being significantly below SV levels.
• PragmaticPulp 7y ago
  Every time I've posted a remote job listing, I've been buried by a flood of low-effort applications. Remote work has been a hot topic for a long time now. To be blunt, there are a lot of people out there looking for cushy remote jobs where they can fade into the background and do as little work as possible. I've had a lot of negative experiences with digital nomads and "4 hour workweek" followers. One person even tried to keep their old job and the new remote position so they could get two paychecks (He couldn't keep up, didn't last long). Instead, our remote hiring has been via outbound recruiting only. The bar for selecting these candidates is much higher, and we're also prepared to offer higher compensation to secure those candidates. Candidates who have a proven track record of delivering quality work in a remote working positions are (or were) hard to come by. They definitely command a premium in the market.
  • sytse 7y ago
    I have not seen it a clearly as you describe, but at GitLab we've seen a bit of the same. The digital nomads that move to a new room weekly tend to have a hard time focussing on work. People that move every couple of months or that have a camper tend to do better. We've found amazing people inbound and most of our current team applied for the job themselves. But there is a lot of noise and we had to decline more than 99% of applicants. We've recently switched to sourcing (outbound recruiting) focussed model https://www.businessinsider.com/gitlab-hire-critical-roles-recruiting-coronavirus-2020-4 https://www.businessinsider.com/gitlab-hire-critical-roles-r...
    • PragmaticPulp 7y ago
      > The digital nomads that move to a new room weekly tend to have a hard time focussing on work. People that move every couple of months or that have a camper tend to do better. My experience has been similar. Honestly, I don't care what people do in their off hours, where they live, or how often they move around. The real problems come from mismatched priorities. Many of the self-described digital nomads are looking to travel, socialize, and essentially vacation all day while putting in just enough work to collect a paycheck. This creates perverse incentives to sandbag, exaggerate effort, pawn off work on coworkers, stretch deadlines, cut corners, and other behaviors that bring the whole team down. Digital nomads are easy to single out, but the same pattern can apply to people who want remote jobs so they can focus on their side hustle, or who try to be full-time caregivers for small children during the day. In theory, it shouldn't matter if people can get their work done. In practice, it becomes a game of minimizing their work. Ultimately, it's the rest of the team that suffers, which is why I'm very careful to only hire people who can make the job their top priority during working hours.
• lucjac 7y ago
  have you considered the actual employment status? A lot of remote workers are employed as freelancers and therefor need to take care of health care / pension themselves with could increase their gross salary
• jmull 7y ago
  This is a more useful summary than the headline: > once I control for various observable factors (including age, experience, hours worked, size of employer, programming languages, and more), fully-remote software developers earn 9.4% more than developers who never or only rarely work remotely. I wouldn't get too attached to any theories of causality or why, but as an experienced remote worker, I'll speculate, FWIW: * Generally (not always, just generally), employers tend to be hesitant and uncomfortable with remote workers. So the people that get and keep those arrangements tend to be those that have proven to be more trusted, capable, and indispensable. (Which all help with higher pay too, of course.) This, BTW, describes my anecdotal experience at my company. Over the years we've collected a decent sized group of people who work remotely, even though the company doesn't generally allow it. The specifics of various cases have been different, but generally something happens that would force the issue (often an office move -- don't know why we need to do that so much), and some people either need to leave the company or work remotely. In those cases, accommodations were usually eventually made for people seen as indispensable while others were let go (in one way or another). This is across various management regimes. One time there was a hard-line stance, "move or be laid off". There was a months long game of chicken, but in the end it was the management that was replaced. (Not necessarily for that -- they made various counter-productive decisions.) * I think another reason for the higher pay may be that (IMO) you really do need to be a better communicator as a remote employee. I think most people working remotely become significantly better communicators, over time, and that translates to more senior positions and pay.
• tomaszs 7y ago
  With different agreement. Less perks and probably you need to pay for some stuff on your own. To sum it up sometimes they earn less
• coliveira 7y ago
  Practically all entry level developers are non-remote workers. This makes a lot of difference.
• RamiroP 7y ago
  I didn't see an important point that I think is relevant for fully-remote devs and correct me if I'm wrong: On-site benefits. If you work remotely, you can't use several of the benefits a company provides so a difference in the salary is common as a compensation for those. Same for healthcare plans and taxes. A lot of remote workers have to pay those, which in many cases are completely or partially paid by the company, so a bigger salary is needed.
  • cs02rm0 7y ago
    One of those on-site benefits is a desk. With a phone, IT access, rental costs for the floorspace, heating, electricity and all the other associated costs that a company can save on by hiring someone remote.
• diehunde 7y ago
  I wonder if after COVID-19 more companies will realize having remote people is viable and be open to offer more remote positions (I'm looking at you FAANG, unicorns, etc.)
  • deedubaya 7y ago
    I doubt it. Distributed work forces being successful is more of a top-down way of management than anything. Also, COVID-19 remote work is not normal remote work. Lots of other stressors and distractions. So the taste might not be a good one.
• boring_twenties 7y ago
  I would love to be able to confirm this. Unfortunately since moving away from NYC and starting to work remotely I can't even get 1/3 of the salaries they're offering back there.
• k__ 7y ago
  When I see payment for devs here in Germany, it's no surprise. I had the feeling, that US devs make about double of what German companies are paying. So now I make more money and add to the exports that everyone in Germany seems to be so happy about :D
  • ChuckNorris89 7y ago
    I didn't understand your comment. Are you working for a German company or remote for a US one?
    • k__ 7y ago
      I'm from Germany working for US companies. I'm "exporting" my work from Germany to the USA.
      • ChuckNorris89 7y ago
        Thank for the clarification. How do you find gigs/customers in the US? I'm in nearby Austria and would like to do the same. The salaries here are a joke.
        • k__ 7y ago
          I blogged, wrote a book, put myself out there in the English speaking IT community. People started noticing. But I have to admit, nowadays I only make money with writing about development and not much production-software development anymore.
• sacks2k 7y ago
  I've been working remotely for almost a decade. I'm a senior developer and make a very good living. It's generally much more difficult for junior developers. At my last job, our team comprised of all senior developers. We hired a few juniors and it was very difficult due to roadblocks/communication. I think this is one reason remote developers earn more: you need to be pretty independent and skilled for it to work out well.
• codelord 7y ago
  No causation without intervention.
• LatteLazy 7y ago
  No, well paid developers are more likely to allowed to work remotely.
• clircle 7y ago
  Employees at my company get paid 20% more, but don't have benefits. Works out about the same.
• archeantus 7y ago
  I was lucky enough to get a great remote job that was happy to pay me as if I lived and worked in SF, but let me live anywhere I wanted to in the country. Remote devs that have this arrangement definitely take home more money than their peers who live in more expensive zip codes.
• nostrademons 7y ago
  Much of this may be the effect of averaging a power law. Whenever you remove barriers to entry (whether geographic, skill-based, or social), you get regression to the mean: if workers are actually identical, they should be paid the same. The mean of a power law distribution is always higher than the media. Hence, if you remove geographic barriers to software development work, the majority of software developers will see their salaries increase. This comes at the expense of a few developers in high-paying areas (Silicon Valley, SF, NYC), who will see their salaries dramatically decreased. We already see this - as someone living in Silicon Valley, I can't take the vast majority of remote jobs because they don't pay enough to live on here. Someone's inevitably going to ask "If salaries are so unsustainably high in Silicon Valley, why do companies keep hiring there and paying those unsustainable salaries?" And the answer to that is that opportunities are not normally distributed. In today's consumer markets, consumers don't split their dollars evenly between all firms providing a good, they tend to overwhelmingly go for the best product available in that market, particularly if that product gets on the market early. And that means going for a location where you have deep talent pools in the many subspecialties needed to build that best product, and putting them all in one cube farm so that communication costs between them are at an absolute minimum. Silicon Valley's wage premium is a consequence of growth and of consumer herd behavior: if everybody either thought entirely for themselves or bought solely based on price without regards to features, distributed teams would have an advantage. It's a very similar phenomena as globalization. In the 80s all of America enjoyed a large wage premium over all of the rest of the world. As globalization broke down labor & trade barriers and innovation slowed, the trend has been toward "equal pay for equal work", which means that the factory worker in America will make something close to what the factory maker in China makes. Global median wages rise (which they have done, substantially), but the gains are at the cost of the majority of American wages, with the exception of a few professions (tech, finance, some marketing) that have substantial skill-based barriers to entry. Those professions have seen their wages increase dramatically as markets get bigger.
  • sbacic 7y ago
    > We already see this - as someone living in Silicon Valley, I can't take the vast majority of remote jobs because they don't pay enough to live on here. You also can't afford _not_ to take them since the high cost of living limits how much you can save each month. This is one of those things that isn't mentioned often - somebody with cheaper costs of living can play hardball for months in search of a good gig. Somebody in NYC or San Fran, not so much.
• lmeyerov 7y ago
  Title should be changed from 'remote'. Someone who spends two days a month wfh is not remote, yet that's what they count.
• jugg1es 7y ago
  There is not one mention of full-time versus contract work. If he didn't control for that, this entire post is totally useless. Contractors charge a premium because they don't get other benefits, like healthcare.
• sbacic 7y ago
  And that's before taking into account the huge amount of money you save with lower taxes and living costs. I've occasionally entertained the idea of moving to a big city like London or New York for work. Every time I did the math I realized how little sense it makes. And I don't live in southern Europe, not some third-world country.
• efficax 7y ago
  I earn remarkably more as a remote developer than I would for my area because I work remotely for a company based in a high income area (NYC) but live in the midwest. I probably make 20-30% more, at least, than a Senior Engineer at a local company would at the top of their payscale. It has nothing to do with experience levels or anything like that, just companies based in high income areas pay more. My salary is even scaled down a bit based on regional cost of living (I'd likely earn 10% more if I relocated to NYC, which would not make up for the cost of living in new york)
• NovemberWhiskey 7y ago
  Has anyone taken a look at the underlying data set, specifically for the compensation aspect? https://drive.google.com/file/d/1QOmVDpd8hcVYqqUXDXf68UMDWQZP0wQV/view https://drive.google.com/file/d/1QOmVDpd8hcVYqqUXDXf68UMDWQZ... Each record has a currency, a "CompTotal" (number of units of pay currency), a "CompFreq" (periodicity of pay; yearly/monthly/weekly) and a "ConvertedComp". ConvertedComp is CompTotal multiplied by the number of CompFreq periods in a year, converted to USD based on the specified currency and then clipped at the 98th percentile which seems to be $2M. It seems ConvertedComp is what analysts are intended to use. Of the United States-based, developer-by-profession responses who gave a salary (~13,500), about 14% specified their CompFreq as something other than annually. That subset has a mean ConvertedComp of >$1M. On the other hand, there are a grand total of 17 responses for ConvertedComp of >$1M for those who specified their CompFreq as annually. Color me suspicious, but I suspect a large fraction of the responses in that subset gave annual compensation rather compensation-per-period; undermining the calculation of ConvertedComp quite considerably. I don't know which fields the author actually used, but I have a lot of questions about the usefulness of this data.
• 0x202020 7y ago
  The reason I started as a remote employee was that I could get a local internship in college at $15/hr and have to live in the city or live at home and drive further. On the other hand I applied for remote internships that I could do from home and not have increased expenses while making $25/hr. Ever since then I have occasionally interviewed for in person roles only to be almost depressed by the offers received. You’re telling me you are offering a Senior/Lead position ~72-80k without providing a laptop, paying healthcare premiums and expecting them to commute 5 days a week? Sure maybe I’ve been had above average positions/compensation but I’ve had better benefits as an intern.
• chadlavi 7y ago
  I didn't see where this might be controlled for, but presumably someone who's a contractor gets paid more because they're dealing with their own benefits, and it's much more common for contractors to work remotely than in-office somewhere.
• 627467 7y ago
  I had that perception from friends who work remotely, yet, it seems counter intuitive... I would think that if a company is open to fill a position with someone remote than the supply-side is much bigger lowering the bargaining power of someone filling that position. Plus as others have mentioned, remote-position is seen as a perk so I expected it to put more downward pressure on salary
• ajuc 7y ago
  It's probably not a factor in US, but in many cheaper countries working remotely means working for clients from richer countries which save a lot on hiring from cheaper countries. So you can split the difference between the pay in your country and in their country and both sides are happy (and developers earn more).
• jillesvangurp 7y ago
  For some people it is a bit of a revelation that this can work, at all. Because they are so used to the status quo of some dude in suit micromanaging what they do in a waterfall like process that people insist is agile (usually anything but). This is not the only way to develop software. If you think about it, there are a lot of developers world wide, which makes any perceived scarcity locally a non issue once you change your mind set and stop insisting that they live within easy commute of wherever your office is. Also, a lot of OSS software that we love and depend on every day defaults to fully remote people organized in collectives that are vastly larger than most corporate software teams producing software at a pace that these teams can only dream off. Good software gets developed by an army of remote developers and you probably use a lot of it every day and maybe even contribute to it once in a while. Another thing to consider is that lots of large corporations are so large that most of their people might as well be remote even if they share the same building (if they still fit in just one). Being in the same building doesn't mean people talk to each other. I used to work in Nokia when that was still a multinational making phones and employing around 30K developers & engineers spread over multiple countries and continents. Think lots of telcos, traveling and miscommunication.