7 ms·

Yeah, to command six figures, you've either many years (10+) of experience under your belt, a masters + experience or you're applying in NYC or LA/SF where cost

Yeah, to command six figures, you've either many years (10+) of experience under your belt, a masters + experience or you're applying in NYC or LA/SF where cost of living is astronomical. In the midwest, you'd be hard pressed to find a starting salary at 6-figures except at the very bottom of that 6-fig range.

malandrew 14y ago
You shouldn't get paid based on your cost of living. You should get paid on value added. TBH, I don't see why living in the midwest should drop the salary a company owes you that much. If you are a good developer, you should command a salary comparable to the value you add plus a profit margin for the business. The only two explanations I can see is that, collectively, software engineers in the midwest are simply not negotiating for the salaries they deserve because given the cost of living they don't feel like they have to negotiate for better or that they are on average of much lower quality in the midwest that there is no room in the salary range there for being an outlier commanding a salary outside that range (i.e. no room for a unicorn in a stable full of horses). If I worked remotely from Timbuktu, I would laugh at any employer that offered me less based on the cost of living in Timbuktu. It should be no different working in the midwest. Our world is flat.
- bmelton 14y ago
  You aren't actually paid based on cost of living, per se, but as that factors in so heavily, it can swing the value proportionally. If I move back to Memphis, TN, I can make approximately half of what I make now in the DC area to live as comfortably as I do. Does that mean I'm worth half as much? No. Does it mean I should expect to make half as much? Pretty much, yeah. Beyond meeting my basic needs (rent, food, whatever) then it's just a matter of how much expendable income does that salary leave me. I don't know if 'percentage of salary' is the best way to measure it, but it factors in. Paying me 'market rate' in a place where a 3 bedroom 3 bath house can be had for $150k is a vastly different proposal when that same house is $450k in a different place. That is the 'cost-of-living' difference. Sure, I might add the same x amount of dollars of value to the company in both locations, but if I can't live comfortably in my market, then it doesn't matter. Note, this argument ignores the competitiveness of the markets as well. There are naturally more potential developers in silicon valley than there are in Bumfuck, Nowhere. Supply and demand does factor here. Lastly, except in situations of outsourcing, you're generally not paid based on where YOU are, but based on where the company (or the location you report to) is. If you're working remotely from Timbuktu while reporting to an office in Silicon Valley, you should expect SV (or near-to) rates. If you're telecommuting to the midwest, you should expect midwest pay. The big difference there is in what it costs to replace you. If you're Linus Torvalds, that cost probably goes way up. If you're like most of us, that cost is probably a close approximation to 'whatever they can hire a local developer for', assuming there are local developers in the area with the skills you possess.
  - skerrit_bwoy 14y ago
    WHY DO PROGRAMMERS THINK LIKE THIS? A radiologist makes $350k whether he's in Manhattan or Memphis. A hedge fund analyst makes comparable, whether he's in LA or Louisville. A BIGLAWyer makes comparable, whether he's in Chicago or Charlestown. They are paid for the value of services rendered, and the doctors, bankers, and lawyers I know seem perfectly content to maximize their income while minimizing their expenses. Only the programmers seem interested in making as little money as possible. Put differently: a radiologist thinks about moving from Manhattan to Memphis and says "Boy, that $350k will let me live like a king down there!" Meanwhile, a programmer says "Boy, I only have to make $75k down there to live like I'm living up here for $150k!" /facepalm
    - bmelton 14y ago
      I don't think that's true at all, actually. I just did some (admittedly) anecdotal job searches for radiology, and there's a $150k price difference between New York and Indiana. I knew a few attorneys that have moved into the DC area to raise their rates (and one who commutes two hours in to DC because otherwise, his billable rate is halved.) The positions people are paid also depend on the cost of living in the area. If the median income for an area is $28k vs. $50k, they're simply not able to afford legal services that cost twice the market. This might mean that lawyers in rural areas only work half as much at the same rate, but that means that without some clever accounting, their yearly income is still (approximately) halved. I'm not saying that no such positions exist, but I know that doctors, lawyers and the like ARE subject to cost of living variance. I don't know of any position in any field that isn't at least somewhat affected by the median income of the municipality in which they operate.
      - skerrit_bwoy 14y ago
        You've got it exactly twisted about docs, read this for clarity: http://www.medscape.com/features/slideshow/compensation/2012/public http://www.medscape.com/features/slideshow/compensation/2012... Choice quote: "As in Medscape's 2011 survey, the highest-earning physicians practice in the North Central region, comprising Iowa, Missouri, Kansas, Nebraska, and South and North Dakota; the mean income of physicians there is $234,000. The next-highest earners were doctors in the Great Lakes region ($228,000). Physicians in the Northeast earned the least, at a mean of $204,000." As for attorneys, I said BIGLAW. Not "get local joe bob out of jail." (But law does have a bifurcated career path, i.e. T14 or bust these days.) I note your silence about hedge fund analysts. Here are the people who are paid in accordance with COL: labor. Programmers seem to think of themselves as laborers, despite having the intellectual caliber to be professionals. Or maybe I am overestimating my tribe. Perhaps we just anemic right hemispheres in our brain, leading to savant-like abilities in the left, leading to the warm embrace of pathetic compensation.
- unreal37 14y ago
  That's an overly simplistic way to look at it. There's a reason jobs in Timbuktu don't pay the same as jobs in NYC for any job type - all jobs from janitor to CEO. This is not unique to IT. You have to start by paying people a FAIR wage to cover their living expenses, and it goes up from there based on skills and experience. If you flatly reject a job that doesn't pay you based on some mythical calculation of "value added" whatever that means, you'll be unemployed a long long time. (Unless you want to be a commission only sales person.)
  - NickPollard 14y ago
    Not necessarily, this is the heart of the supply-vs-demand concept. If there are a hundred other people that can do what you do for cheaper? Of course you wont find a job. But if you're the only one? Well after all the companies tell you take a hike, and then find they can't hire anyone else - they'll come back. If the cost of paying you is less than the value you add, and they can't find any cheaper alternatives, it's in their interest to hire you. As usual, Patio11 is the best voice on this subject - read some of his posts about salary negotiation.
    - dhimes 14y ago
      For the view from the other side of the table, read Peldi's posts from Balsamiq.
  - kamaal 14y ago
    I don't see anything wrong in getting paid proportional to 'value added' for one simple reason : My employer makes the same money as somebody in another geographical area but wants to pay me less than what he would be paying me in that geographical area. The difference goes in his pocket, while extracts the same work from me. FAIR wage is not meant to cover your living expenses, they supposed to compensate you for your time, effort and results. This isn't slavery, we are no longer working for merely surviving at somebody else's mercy.
    - malandrew 14y ago
      ... and working to put profit only in someone else's pocket. If a firm is in Memphis instead of NYC and selling their services to essentially the same clients, then the owners of that business are already earning a greater profit on other cheaper operating costs like commercial real estate. By accepting a lower salary that simply covers a comfortable style of living you're simply putting even more money in the owner's pocket instead of yours. It's a classic case of pareto optimality. The only explanation I can think of is that many developers don't see themselves as professionals commanding the salaries of professionals as skerrit_bwoy pointed out. There is no reason that good developer in any market shouldn't be living at the exact same standard of living as the good doctors, lawyers, finance people in that market. They should be living in the same homes and sending their kids to the same schools, etc.
- benmccann 14y ago
  You can add more value to firms outside the midwest because there are very few firms in the midwest where tech is their core business. I was living in Cleveland and severely underpaid, but I could not find another company in the area that would give me a $20k raise because IT was just a cost to them and not how they made money. I moved to California and more than tripled my salary.
- phamilton 14y ago
  Your salary, by its very nature must be less than "value added", and more than "cost of living". Anything within that range fulfills the minimum requirements of both parties. The incentive to negotiate is based upon proximity to those limits. An engineer who barely makes enough to get by (like one making 90k with a family of 4 in the bay area) has greater incentive to negotiate than one making enough (65k in Boise, ID where a 3 bedroom house is 150k) in a less expensive area. In more expensive areas, overhead increases. $6k/month for a office in Palo Alto reduces "value added" for an employee significantly. Electricity costs almost double in CA than in Idaho. These and other factors affect the value added. (This doesn't factor in so much when you work remotely). I'm not going to get into supply and demand too much, but another big reason they pay less is because they can. Because very few employees are irreplaceable. Leaving a crappy 3 bedroom apartment in the bay area and moving to Idaho and buying a house in exchange for a 30% pay cut isn't a bad deal.
- danssig 14y ago
  My experience in the midwest was that they generally have very low estimates of what anything they pay for is worth (probably because they get this idea from the lower cost of living).
- lifeisstillgood 14y ago
  The problem with this is viewable on freelancer.com and other sites. Once you can be sure a coder will do good work remotely, then you can get a coder to do some work from anywhere on the planet, and those who have a much lower cost of living will happily undercut those who dont. It may be the single biggest driver against the growth of cities.
  - jebblue 14y ago
    Yup, they say on their front page that the average job is under $200. That's about 3 to 4 hours work for me.
  - boxy_brown 14y ago
    What you describe isn't a problem, it's the greatest possible outcome. Think about it from the point of view of the employer and the remote coder.
- noonespecial 14y ago
  Employers value proximity. They'll pay extra for it.

malandrew 14y ago

You shouldn't get paid based on your cost of living. You should get paid on value added. TBH, I don't see why living in the midwest should drop the salary a company owes you that much. If you are a good developer, you should command a salary comparable to the value you add plus a profit margin for the business. The only two explanations I can see is that, collectively, software engineers in the midwest are simply not negotiating for the salaries they deserve because given the cost of living they don't feel like they have to negotiate for better or that they are on average of much lower quality in the midwest that there is no room in the salary range there for being an outlier commanding a salary outside that range (i.e. no room for a unicorn in a stable full of horses). If I worked remotely from Timbuktu, I would laugh at any employer that offered me less based on the cost of living in Timbuktu. It should be no different working in the midwest. Our world is flat.

bmelton 14y ago
You aren't actually paid based on cost of living, per se, but as that factors in so heavily, it can swing the value proportionally. If I move back to Memphis, TN, I can make approximately half of what I make now in the DC area to live as comfortably as I do. Does that mean I'm worth half as much? No. Does it mean I should expect to make half as much? Pretty much, yeah. Beyond meeting my basic needs (rent, food, whatever) then it's just a matter of how much expendable income does that salary leave me. I don't know if 'percentage of salary' is the best way to measure it, but it factors in. Paying me 'market rate' in a place where a 3 bedroom 3 bath house can be had for $150k is a vastly different proposal when that same house is $450k in a different place. That is the 'cost-of-living' difference. Sure, I might add the same x amount of dollars of value to the company in both locations, but if I can't live comfortably in my market, then it doesn't matter. Note, this argument ignores the competitiveness of the markets as well. There are naturally more potential developers in silicon valley than there are in Bumfuck, Nowhere. Supply and demand does factor here. Lastly, except in situations of outsourcing, you're generally not paid based on where YOU are, but based on where the company (or the location you report to) is. If you're working remotely from Timbuktu while reporting to an office in Silicon Valley, you should expect SV (or near-to) rates. If you're telecommuting to the midwest, you should expect midwest pay. The big difference there is in what it costs to replace you. If you're Linus Torvalds, that cost probably goes way up. If you're like most of us, that cost is probably a close approximation to 'whatever they can hire a local developer for', assuming there are local developers in the area with the skills you possess.
- skerrit_bwoy 14y ago
  WHY DO PROGRAMMERS THINK LIKE THIS? A radiologist makes $350k whether he's in Manhattan or Memphis. A hedge fund analyst makes comparable, whether he's in LA or Louisville. A BIGLAWyer makes comparable, whether he's in Chicago or Charlestown. They are paid for the value of services rendered, and the doctors, bankers, and lawyers I know seem perfectly content to maximize their income while minimizing their expenses. Only the programmers seem interested in making as little money as possible. Put differently: a radiologist thinks about moving from Manhattan to Memphis and says "Boy, that $350k will let me live like a king down there!" Meanwhile, a programmer says "Boy, I only have to make $75k down there to live like I'm living up here for $150k!" /facepalm
  - bmelton 14y ago
    I don't think that's true at all, actually. I just did some (admittedly) anecdotal job searches for radiology, and there's a $150k price difference between New York and Indiana. I knew a few attorneys that have moved into the DC area to raise their rates (and one who commutes two hours in to DC because otherwise, his billable rate is halved.) The positions people are paid also depend on the cost of living in the area. If the median income for an area is $28k vs. $50k, they're simply not able to afford legal services that cost twice the market. This might mean that lawyers in rural areas only work half as much at the same rate, but that means that without some clever accounting, their yearly income is still (approximately) halved. I'm not saying that no such positions exist, but I know that doctors, lawyers and the like ARE subject to cost of living variance. I don't know of any position in any field that isn't at least somewhat affected by the median income of the municipality in which they operate.
    - skerrit_bwoy 14y ago
      You've got it exactly twisted about docs, read this for clarity: http://www.medscape.com/features/slideshow/compensation/2012/public http://www.medscape.com/features/slideshow/compensation/2012... Choice quote: "As in Medscape's 2011 survey, the highest-earning physicians practice in the North Central region, comprising Iowa, Missouri, Kansas, Nebraska, and South and North Dakota; the mean income of physicians there is $234,000. The next-highest earners were doctors in the Great Lakes region ($228,000). Physicians in the Northeast earned the least, at a mean of $204,000." As for attorneys, I said BIGLAW. Not "get local joe bob out of jail." (But law does have a bifurcated career path, i.e. T14 or bust these days.) I note your silence about hedge fund analysts. Here are the people who are paid in accordance with COL: labor. Programmers seem to think of themselves as laborers, despite having the intellectual caliber to be professionals. Or maybe I am overestimating my tribe. Perhaps we just anemic right hemispheres in our brain, leading to savant-like abilities in the left, leading to the warm embrace of pathetic compensation.
unreal37 14y ago
That's an overly simplistic way to look at it. There's a reason jobs in Timbuktu don't pay the same as jobs in NYC for any job type - all jobs from janitor to CEO. This is not unique to IT. You have to start by paying people a FAIR wage to cover their living expenses, and it goes up from there based on skills and experience. If you flatly reject a job that doesn't pay you based on some mythical calculation of "value added" whatever that means, you'll be unemployed a long long time. (Unless you want to be a commission only sales person.)
- NickPollard 14y ago
  Not necessarily, this is the heart of the supply-vs-demand concept. If there are a hundred other people that can do what you do for cheaper? Of course you wont find a job. But if you're the only one? Well after all the companies tell you take a hike, and then find they can't hire anyone else - they'll come back. If the cost of paying you is less than the value you add, and they can't find any cheaper alternatives, it's in their interest to hire you. As usual, Patio11 is the best voice on this subject - read some of his posts about salary negotiation.
  - dhimes 14y ago
    For the view from the other side of the table, read Peldi's posts from Balsamiq.
- kamaal 14y ago
  I don't see anything wrong in getting paid proportional to 'value added' for one simple reason : My employer makes the same money as somebody in another geographical area but wants to pay me less than what he would be paying me in that geographical area. The difference goes in his pocket, while extracts the same work from me. FAIR wage is not meant to cover your living expenses, they supposed to compensate you for your time, effort and results. This isn't slavery, we are no longer working for merely surviving at somebody else's mercy.
  - malandrew 14y ago
    ... and working to put profit only in someone else's pocket. If a firm is in Memphis instead of NYC and selling their services to essentially the same clients, then the owners of that business are already earning a greater profit on other cheaper operating costs like commercial real estate. By accepting a lower salary that simply covers a comfortable style of living you're simply putting even more money in the owner's pocket instead of yours. It's a classic case of pareto optimality. The only explanation I can think of is that many developers don't see themselves as professionals commanding the salaries of professionals as skerrit_bwoy pointed out. There is no reason that good developer in any market shouldn't be living at the exact same standard of living as the good doctors, lawyers, finance people in that market. They should be living in the same homes and sending their kids to the same schools, etc.
benmccann 14y ago
You can add more value to firms outside the midwest because there are very few firms in the midwest where tech is their core business. I was living in Cleveland and severely underpaid, but I could not find another company in the area that would give me a $20k raise because IT was just a cost to them and not how they made money. I moved to California and more than tripled my salary.
phamilton 14y ago
Your salary, by its very nature must be less than "value added", and more than "cost of living". Anything within that range fulfills the minimum requirements of both parties. The incentive to negotiate is based upon proximity to those limits. An engineer who barely makes enough to get by (like one making 90k with a family of 4 in the bay area) has greater incentive to negotiate than one making enough (65k in Boise, ID where a 3 bedroom house is 150k) in a less expensive area. In more expensive areas, overhead increases. $6k/month for a office in Palo Alto reduces "value added" for an employee significantly. Electricity costs almost double in CA than in Idaho. These and other factors affect the value added. (This doesn't factor in so much when you work remotely). I'm not going to get into supply and demand too much, but another big reason they pay less is because they can. Because very few employees are irreplaceable. Leaving a crappy 3 bedroom apartment in the bay area and moving to Idaho and buying a house in exchange for a 30% pay cut isn't a bad deal.
danssig 14y ago
My experience in the midwest was that they generally have very low estimates of what anything they pay for is worth (probably because they get this idea from the lower cost of living).
lifeisstillgood 14y ago
The problem with this is viewable on freelancer.com and other sites. Once you can be sure a coder will do good work remotely, then you can get a coder to do some work from anywhere on the planet, and those who have a much lower cost of living will happily undercut those who dont. It may be the single biggest driver against the growth of cities.
- jebblue 14y ago
  Yup, they say on their front page that the average job is under $200. That's about 3 to 4 hours work for me.
- boxy_brown 14y ago
  What you describe isn't a problem, it's the greatest possible outcome. Think about it from the point of view of the employer and the remote coder.
noonespecial 14y ago
Employers value proximity. They'll pay extra for it.