3 ms·

What's happening here is disintermediation - the employees in SEE and EE have realized that they can cut out the middleman (their local employer) and work direc

by sbacic 5y ago

What's happening here is disintermediation - the employees in SEE and EE have realized that they can cut out the middleman (their local employer) and work directly with foreign clients. This makes the lower cost of living the employee's, rather than the employer's, competitive advantage. It also means that these local employers now have to compete on two fronts - for labor with their foreign competitors who have greater purchasing power and for gigs with their former employees who can offer the same services but with lower overhead. The next step will be that these newly minted freelancers will realize they can charge more and raise their rates. Lower CoL is a huge advantage here - you can wait for months for the right gig to come along while your competitor in NYC can't. In the end, I think the rates in the WE and the US will drop all around the board while simultaneously rising in cheaper areas until an equilibrium is reached.

portpecos 5y ago
Sounds like a giant sucking sound of programming jobs departing to lower waged labors. Then higher waged laborers will need to lower their wages to compete. Economists call that a comparative advantage and a net win. If you’re claiming an equilibrium point will be reached, then I think the equilibrium point will be $40/hr for Senior, $30/hr for Mid, $20/hr for Junior.
- sbacic 5y ago
  I'm not so sure. Obviously, more competition means lower prices, but software has proven very resistant to that bit of conventional economic wisdom, with a few exceptions of course (namely, places with very high CoL).
lytefm 5y ago
I doubt that a large amount of programming jobs will be outsourced to cheaper countries. Having a good understanding of the problem domain in the same language and time zone as the employer is extremely valuable. I guess that local extremes for wages in areas with high living costs like in silicon valley will drop when it's possible to work remotely. But I don't see why rates would drop across the board as long as demand stays high.
- rualca 5y ago
  > Having a good understanding of the problem domain in the same language and time zone as the employer is extremely valuable. Sharing a common language is not a problem at all, nor is sharing (or meeting) in the same time zone. I'd point the exact opposite regarding timezones, in fact. Not sharing a time zone means you can post a question to get yourself unblocked at the end of the day, and you'll already have the answer waiting for you once you log back next morning.

by sbacic 5y ago

portpecos 5y ago

Sounds like a giant sucking sound of programming jobs departing to lower waged labors. Then higher waged laborers will need to lower their wages to compete. Economists call that a comparative advantage and a net win. If you’re claiming an equilibrium point will be reached, then I think the equilibrium point will be $40/hr for Senior, $30/hr for Mid, $20/hr for Junior.

sbacic 5y ago
I'm not so sure. Obviously, more competition means lower prices, but software has proven very resistant to that bit of conventional economic wisdom, with a few exceptions of course (namely, places with very high CoL).

lytefm 5y ago

I doubt that a large amount of programming jobs will be outsourced to cheaper countries. Having a good understanding of the problem domain in the same language and time zone as the employer is extremely valuable. I guess that local extremes for wages in areas with high living costs like in silicon valley will drop when it's possible to work remotely. But I don't see why rates would drop across the board as long as demand stays high.

rualca 5y ago
> Having a good understanding of the problem domain in the same language and time zone as the employer is extremely valuable. Sharing a common language is not a problem at all, nor is sharing (or meeting) in the same time zone. I'd point the exact opposite regarding timezones, in fact. Not sharing a time zone means you can post a question to get yourself unblocked at the end of the day, and you'll already have the answer waiting for you once you log back next morning.