4 ms·

Why can no one but the US pay developers well? The GDP per cap is there in many countries... but for some reason developers are only key employees in the US?

golergka 6y ago
Developers work in many different companies, and most of them don't make products that can, or could in even in theory make enough money to make paying as much worthwhile. It's a chicken and egg problem.
- runako 6y ago
  In my experience, the "Software is Eating the World" thesis is looking largely correct. The number of software developers at modern non-tech companies can be surprising. Even in my limited experience, I have seen big, well-funded software teams in companies doing retail, manufacturing, transportation, shipping, food service, etc. Those developers do not typically make SV wages (and generally have better work-life balance), but they do frequently earn comparably to lawyers in their cities. An example in the insurance industry from Dallas, a city not known for being a tech hub: https://stackoverflow.com/jobs/417604/mid-senior-level-net-developer-pcms https://stackoverflow.com/jobs/417604/mid-senior-level-net-d... Or telecom in Atlanta: https://stackoverflow.com/jobs/392595/senior-software-engineer-t-mobile-usa https://stackoverflow.com/jobs/392595/senior-software-engine... It might be fair to say these industries have more leverage in the US because they can serve a bigger market. But it's not all about the types of products they make, there are definitely bigger issues that drive the comp differential. I would love to learn more.
  - tonyedgecombe 6y ago
    That was traditionally the case, it was only when the outsourcing fad came along that these companies started to shed developers.
AmericanChopper 6y ago
Because the US has more companies that make software than anywhere else, and therefor has a greater demand for software engineers than anywhere else in the world. The supply of software engineers hasn’t kept up with the demand for their labor, so salaries go up. This has happened all over the world, it’s just more pronounced in the US because the demand is so much greater. The situation in the US does impact salaries all over the world though. A lot of software engineers over seas work for companies that are either US based, or who primarily do business in the US.
toomanybeersies 6y ago
Or are developers paid a disproportionate wage in comparison to other jobs? Why should a software developer get paid hundreds of thousands of dollars a year, while those who weren't lucky enough to be born with the required intelligence (despite what coding bootcamps say, not everyone is cut out to write code) are doomed to work a low-wage job for their entire life? It's the height of privilege. And if you subscribe to the theory that intelligence is a product of a child's developmental environment (nature over nature), it serves to increase social stratification and decrease class mobility. Builders and electricians are just as much key employees as software developers. In Australia, a skilled electrician can earn the same salary as a software developer, and that's the way it should be. My job is easy, I sit at a desk all day. I don't have to wake up at 5 AM every day and spend 8 hours a day (more like 6 in Australia, thanks to the unions) running cables in a construction site. I'd love to see most software developers try their hands at a trade, it's backbreaking work.
- titanomachy 6y ago
  Because the companies that employ them make lots of money from their labour. Paying them less would mean tech shareholders and CEOs make more profit. Electricians wouldn't somehow magically get paid more if software engineers made less. I guess you're asking society to value buildings more and software less?
- numair 6y ago
  Your post is a literal summary of why the attitude and performance of software engineers in other countries is so utterly subpar. Having spent a lot of time in Australia, I found the work ethic and culture of the office-bound workers there to be completely unacceptable by American standards. You wouldn’t understand American standards because you don’t understand the difference in work intensity and performance. There’s a reason all of the good workers still head to California.
  - adrianN 6y ago
    All my colleagues are good workers and none of them have the intention to move to California. In fact, a good chunk moved out of California.
908B64B197 6y ago
I see several factors here. There's non-compete in most places that makes it hard for employees to switch jobs. Since there's none in California, the strategy to retain employees is to tie their income to equity in the company. That creates a moat around hiring engineers from a competitor (you'll have to match the equity if you want to hire!). There's also labor laws that makes it hard to fire someone; these incentivize the business owner to pay less so that a bad hire has less of an effect. There's also, in a lot of EU countries, so much taxes that it's helpful early one to hire specialized accountants just to claim all the possible subsidies for the business. It can be worth it for businesses with 5 employees. Adding that extra salary will leave less for the early employees. There's also the fact that some companies simply don't see the value of software, at all. They have a software division but don't treat it as the core of their business. In their mind, it's simply a tool for the business (despite the whole business depending on it sometimes!). So they treat software as a cost center and that drives engineers to tech-focused companies that are clustered in the US. Prime example of that is banking, where no matter how much revenue is directly tied to software, it's still considered a cost center. Finally, in some market there's simply a talent gap. Ontario, and Canada, strikes me as one since I've met a few Canadians who jumped the border to Silicon Valley but never actually met a Silicon Valley engineer moving up north.

golergka 6y ago

Developers work in many different companies, and most of them don't make products that can, or could in even in theory make enough money to make paying as much worthwhile. It's a chicken and egg problem.

runako 6y ago
In my experience, the "Software is Eating the World" thesis is looking largely correct. The number of software developers at modern non-tech companies can be surprising. Even in my limited experience, I have seen big, well-funded software teams in companies doing retail, manufacturing, transportation, shipping, food service, etc. Those developers do not typically make SV wages (and generally have better work-life balance), but they do frequently earn comparably to lawyers in their cities. An example in the insurance industry from Dallas, a city not known for being a tech hub: https://stackoverflow.com/jobs/417604/mid-senior-level-net-developer-pcms https://stackoverflow.com/jobs/417604/mid-senior-level-net-d... Or telecom in Atlanta: https://stackoverflow.com/jobs/392595/senior-software-engineer-t-mobile-usa https://stackoverflow.com/jobs/392595/senior-software-engine... It might be fair to say these industries have more leverage in the US because they can serve a bigger market. But it's not all about the types of products they make, there are definitely bigger issues that drive the comp differential. I would love to learn more.
- tonyedgecombe 6y ago
  That was traditionally the case, it was only when the outsourcing fad came along that these companies started to shed developers.

AmericanChopper 6y ago

Because the US has more companies that make software than anywhere else, and therefor has a greater demand for software engineers than anywhere else in the world. The supply of software engineers hasn’t kept up with the demand for their labor, so salaries go up. This has happened all over the world, it’s just more pronounced in the US because the demand is so much greater. The situation in the US does impact salaries all over the world though. A lot of software engineers over seas work for companies that are either US based, or who primarily do business in the US.

toomanybeersies 6y ago

Or are developers paid a disproportionate wage in comparison to other jobs? Why should a software developer get paid hundreds of thousands of dollars a year, while those who weren't lucky enough to be born with the required intelligence (despite what coding bootcamps say, not everyone is cut out to write code) are doomed to work a low-wage job for their entire life? It's the height of privilege. And if you subscribe to the theory that intelligence is a product of a child's developmental environment (nature over nature), it serves to increase social stratification and decrease class mobility. Builders and electricians are just as much key employees as software developers. In Australia, a skilled electrician can earn the same salary as a software developer, and that's the way it should be. My job is easy, I sit at a desk all day. I don't have to wake up at 5 AM every day and spend 8 hours a day (more like 6 in Australia, thanks to the unions) running cables in a construction site. I'd love to see most software developers try their hands at a trade, it's backbreaking work.

titanomachy 6y ago
Because the companies that employ them make lots of money from their labour. Paying them less would mean tech shareholders and CEOs make more profit. Electricians wouldn't somehow magically get paid more if software engineers made less. I guess you're asking society to value buildings more and software less?
numair 6y ago
Your post is a literal summary of why the attitude and performance of software engineers in other countries is so utterly subpar. Having spent a lot of time in Australia, I found the work ethic and culture of the office-bound workers there to be completely unacceptable by American standards. You wouldn’t understand American standards because you don’t understand the difference in work intensity and performance. There’s a reason all of the good workers still head to California.
- adrianN 6y ago
  All my colleagues are good workers and none of them have the intention to move to California. In fact, a good chunk moved out of California.

908B64B197 6y ago

I see several factors here. There's non-compete in most places that makes it hard for employees to switch jobs. Since there's none in California, the strategy to retain employees is to tie their income to equity in the company. That creates a moat around hiring engineers from a competitor (you'll have to match the equity if you want to hire!). There's also labor laws that makes it hard to fire someone; these incentivize the business owner to pay less so that a bad hire has less of an effect. There's also, in a lot of EU countries, so much taxes that it's helpful early one to hire specialized accountants just to claim all the possible subsidies for the business. It can be worth it for businesses with 5 employees. Adding that extra salary will leave less for the early employees. There's also the fact that some companies simply don't see the value of software, at all. They have a software division but don't treat it as the core of their business. In their mind, it's simply a tool for the business (despite the whole business depending on it sometimes!). So they treat software as a cost center and that drives engineers to tech-focused companies that are clustered in the US. Prime example of that is banking, where no matter how much revenue is directly tied to software, it's still considered a cost center. Finally, in some market there's simply a talent gap. Ontario, and Canada, strikes me as one since I've met a few Canadians who jumped the border to Silicon Valley but never actually met a Silicon Valley engineer moving up north.