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It's a global market. Many quality devs earn less than that in less developed countries. Why would they not want to work for less money if it allows them to be

It's a global market. Many quality devs earn less than that in less developed countries. Why would they not want to work for less money if it allows them to be competitive but is still a good amount of money for them? Why would you undercut their pricing power in the market just because Sillicon Valley has insane costs of living (but also insane job availability)?

zerr 11y ago
While SV is an extreme, the sad true is that the cost of living is not as low as it seems from outside - but the people are used to low income. They just buy less goods, live frugally, etc... I'm myself from less developed eastern European country, and the last time I checked, groceries - eggs, meat, milk, etc.. had comparable prices to that of Californian cities, such as San Diego... And if we're talking about getting high quality education, healthcare, etc... in developing countries you have to go premium, and it costs even more than in western countries.
- hluska 11y ago
  This is quite a surprising perspective. Thanks for sharing it!!
EugeneOZ 11y ago
Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive. upd.: and when they don't understand it, their price demping hurts whole market.
- dragonwriter 11y ago
  > Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive. In an efficient competitive market, the expected behavior is that each seller will set the price they are willing to sell the next unit of what they are selling at the cost to them of providing that next unit (including the opportunity cost of what they give up to provide it.) > and when they don't understand it, their price demping hurts whole market. I think they do understand it. Its just that the people who have higher costs don't like that it prices those sellers out of the market. But welcome to a robust competitive market.
  - EugeneOZ 11y ago
    1) No, price in any market is as high as buyers of this market can afford. 2) No, employers are not so naïve :) Everybody understand who you can hire for $5/hour and what to expect. I'm not interested in such employers and they are not interested in me, so it's just not my part of market and I don't care. As employer (sometimes I'm employer) I have to filter out people with low bids without even reading their profiles. I know what to expect from low price.
    - dragonwriter 11y ago
      > No, price in any market is as high as buyers of this market can afford. If market clearing price is set only by what buyers are willing to pay and not by costs, you have a monopolistic market in which rents are being extracted, not an efficient competitive market. If market clearing price is set only by sellers costs and not what buyers are willing to pay, you have the reverse case, where you have a monopoly buyer. In an ideal competitive market, the price a buyer is willing to pay to buy the next unit is set by the expected benefit buying another unit brings them, and the price a seller is willing to sell the next unit for is equal to the seller's cost (including opportunity cost) of providing the next unit, and the market clearing price is the price at which the number of buyers willing to pay that price or more is equal the number of sellers willing to sell at that price or less, and buyers only willing to pay less and sellers only willing to sell for more are priced out of the market.
father_of_two 11y ago
Even SV clients get as cheap as they can. I had one -- from SF bay, not exactly SV -- which agreed to pay me 75$ to create a function to write text into images at two different possible positions (bottom and centered). Ok, cheap, but it was a 1h or 2h work. Done. Then he started asking more positions, gradient backgrounds, a command line interface, then a REST interface... when I asked him JUST 250$ for the whole deal, he went nuts. Now I'm back to consulting, where I get more than the double of that per day. odesk and similar crapy sites suck.
scardine 11y ago
One USD buys 3 BRL (Brazilian Reals), so the exchange rate can make 3rd world products (including developers) look cheaper on the international market.

zerr 11y ago

While SV is an extreme, the sad true is that the cost of living is not as low as it seems from outside - but the people are used to low income. They just buy less goods, live frugally, etc... I'm myself from less developed eastern European country, and the last time I checked, groceries - eggs, meat, milk, etc.. had comparable prices to that of Californian cities, such as San Diego... And if we're talking about getting high quality education, healthcare, etc... in developing countries you have to go premium, and it costs even more than in western countries.

hluska 11y ago
This is quite a surprising perspective. Thanks for sharing it!!

EugeneOZ 11y ago

Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive. upd.: and when they don't understand it, their price demping hurts whole market.

dragonwriter 11y ago
> Because it's a market and prices of their time should be as high as their skills can be priced, not as low as possible to survive. In an efficient competitive market, the expected behavior is that each seller will set the price they are willing to sell the next unit of what they are selling at the cost to them of providing that next unit (including the opportunity cost of what they give up to provide it.) > and when they don't understand it, their price demping hurts whole market. I think they do understand it. Its just that the people who have higher costs don't like that it prices those sellers out of the market. But welcome to a robust competitive market.
- EugeneOZ 11y ago
  1) No, price in any market is as high as buyers of this market can afford. 2) No, employers are not so naïve :) Everybody understand who you can hire for $5/hour and what to expect. I'm not interested in such employers and they are not interested in me, so it's just not my part of market and I don't care. As employer (sometimes I'm employer) I have to filter out people with low bids without even reading their profiles. I know what to expect from low price.
  - dragonwriter 11y ago
    > No, price in any market is as high as buyers of this market can afford. If market clearing price is set only by what buyers are willing to pay and not by costs, you have a monopolistic market in which rents are being extracted, not an efficient competitive market. If market clearing price is set only by sellers costs and not what buyers are willing to pay, you have the reverse case, where you have a monopoly buyer. In an ideal competitive market, the price a buyer is willing to pay to buy the next unit is set by the expected benefit buying another unit brings them, and the price a seller is willing to sell the next unit for is equal to the seller's cost (including opportunity cost) of providing the next unit, and the market clearing price is the price at which the number of buyers willing to pay that price or more is equal the number of sellers willing to sell at that price or less, and buyers only willing to pay less and sellers only willing to sell for more are priced out of the market.

father_of_two 11y ago

Even SV clients get as cheap as they can. I had one -- from SF bay, not exactly SV -- which agreed to pay me 75$ to create a function to write text into images at two different possible positions (bottom and centered). Ok, cheap, but it was a 1h or 2h work. Done. Then he started asking more positions, gradient backgrounds, a command line interface, then a REST interface... when I asked him JUST 250$ for the whole deal, he went nuts. Now I'm back to consulting, where I get more than the double of that per day. odesk and similar crapy sites suck.

scardine 11y ago

One USD buys 3 BRL (Brazilian Reals), so the exchange rate can make 3rd world products (including developers) look cheaper on the international market.