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Is developer compensation becoming bimodal?

danluu.com

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Re: Is developer compensation becoming bimodal?

#51

Developer salaries in the UK are very modest. Companies don't even know how to identify good developers, so they have no hope of competing over them.

According to www.itjobswatch.co.uk a senior Java developer earns £70k. But can command day rate of £575. That works out at about double. Suggestion it is bimodal.

Re: Is developer compensation becoming bimodal?

#52
post #9

IMHO, the title should be fixed to mention that it is only about developer compensation in the USA . I am always surprised at the salaries in the USA. I have two bachelor degrees and two master degrees from two well established universities, and earn about 2k euro a month (before 20% tax deduction), which is considered fairly decent for a starter. Even then, many corporations outsource software development to Eastern…

Granted there are different shades of outsourcing/remote work, compensations are only decent in the context of local market rates but in no way they are proportional to the work being done. It is only fair due to lack of regulation in the space of international work.

Consider how basecamp works for example

https://m.signalvnoise.com/how-we-pay-people-at-basecamp-f1d...

https://www.wageunion.eu/

Re: Is developer compensation becoming bimodal?

#53
post #32

Earlier quoted context omitted.

Europe is far beyond the US (regarding cs saleries, I mean), but in e.g. Germany it's not that bad. I've a masters degree and about 3 years work experience and am at around 6k a month (+ vacation bonus +christmas bonus +personal performance bonus +company retirement plan) which is quite average in southern germany at least for bigger company and engineering/technical roles.

In the US, my salary was about that (6250 USD/month) straight out of university 12 years ago, but of course I only had 2 weeks paid vacation. I did get bonuses, but no pension. IIRC taxes are slightly lower in Germany too. After putting the maximum amount into a 401(k) (self funded, pre-tax retirement) and paying taxes, I took home around $3500 per month, excluding bonuses.

That's about what I get after taxes, too (in EUR, ~3.6k EUR), but my retirement (with 7% interest) and healthcare costs are covered completely. Also I have about 40 vacation days and a 37h work week :)

Re: Is developer compensation becoming bimodal?

#54
post #7

I'm partial to the O-ring explanation. Software engineering is uniquely multiplicative because it's possible for a software engineer to create software that does software engineering. Chemical/electrical/mechanical engineers can't use their field to automate their field. Doctors and lawyers are almost exclusively service jobs, unlike the manufacturing nature of engineering. Automation is a force multiplier, and softw…

Yeah, but the questions is if creating tools (software that does software engineering) is so complex that only a few developers can do it well? Otherwise this tool creation would still be subject to market prices just as regular development.

Re: Is developer compensation becoming bimodal?

#55

Almost all professional and semi-professional salaries are becoming bimodal. I'm too tired at the moment to look this up, but the NY Times had a piece sometime in the last couple of years where they were discussing income distributions, and had an interactive, and what they looked like, almost across the board, was a bigger lower mode, and then a second, smaller, more spiked mode much higher. What struck me about tha…

I can imagine a simple explanation where one mode of gratification aims to pay as low as possible to keep the workforce willing to work at all, and another mode is to use pay amount to avoid talent from going away. Pay is thought about and used differently in both modes, and it's a simple enough management pattern that it could translate to every field. This is an over simplistic hypothesis and it would need more info to confirm but it seems potentially reasonable to me.

Re: Is developer compensation becoming bimodal?

#56
post #5

Earlier quoted context omitted.

do you have any quantified evidence of this or is it just a gut feeling

Well, it’s anecdotal from experience and my network. 10 years ago we would get 1-5 applications for a programming job, and most would frankly be underqualified. The last position I put up for a regular .net, jboss and sharepoint position had over 300 applicants, several vastly overqualified. I work in the public sector, so it’s not exactly because we offer what most developers consider “dream positions” and we certai…

> The last position I put up ... had over 300 applicants, several vastly overqualified.

Interesting how this contrasts with the widely-held perception that there is a programmer shortage.

Re: Is developer compensation becoming bimodal?

#57

To the puzzle about developer comp outstripping EE or other engineering disciplines pay (ie Civil Engineering god help me), I agree that the student in those fields could apply themselves to become able programmers. So why the huge disparity in pay? I have two ideas: 1. Lots of technically able people still don’t enjoy plugging their mind into a machine. Its probably hard to believe in the HN community but many peopl…

If I look at the situation in my home country, chemical engineers still make more than any other kind. Why? Because big pharma (and big tobacco!) extract the most profits per engineer.

When I was in Germany, mechanical and electrical engineers were typically making more than me. Same reason.

A few american software companies are making over a million yearly per developer. 200k for a new grad is nothing to them.

You're right that investors probably spend more to fund the work of programmers in VC backed startups, but nobody forces them. They could simply start investing in more companies outside tech hubs (or even outside the country).

Re: Is developer compensation becoming bimodal?

#58
post #38

Yes, it is. And the example used in the article of chemical engineering reinforces the point. It ties into computer science quite nicely. To become a chemical engineer, you first have to complete the course work for a degree in chemistry. Chemistry as chemistry is an extremely modular subject matter; you can solve most problems in discrete steps in isolation. In a computer science sense, chemistry is about pure funct…

Tbt, I haven't seen that much evidence that correlates developer ability with salary. For example, developers living in the Silicon Valley are paid the most. Not because they are the best, but because they are living in the Silicon Valley. Geographical factors play a much bigger role in compensation than developer ability.

But that 'greater' SV salary for a junior developer can give you less purchasing power than a 'lower' salary for a senior somewhere in Europe, due to cost of living.

Granted, money is 'absolute' if you use it to e.g travel around the world, but most people don't do that. In general money is 'relative' to one's environment.

Re: Is developer compensation becoming bimodal?

#59

Almost all professional and semi-professional salaries are becoming bimodal. I'm too tired at the moment to look this up, but the NY Times had a piece sometime in the last couple of years where they were discussing income distributions, and had an interactive, and what they looked like, almost across the board, was a bigger lower mode, and then a second, smaller, more spiked mode much higher. What struck me about tha…

>it suggested (at least to me) very unnatural about how incomes were being allocated

I feel like the word "unnatural" is doing a lot of work here... can you explain what you mean? Do you believe economies "naturally" generate equal income distributions?

At first glace it's as natural as any economic phenomenon: it emerges from the uncoordinated actions of many different individuals.

My sense is that you actually meant "unfair" or "undesirable" or "evil", but it seems worth clarifying.

Re: Is developer compensation becoming bimodal?

#60
Goods distributed as software and, to a lesser degree, online services have phenomenal scaling leverage arising from very low marginal costs.

I can write some software publish it and in a matter of months have it improving the lives of hundreds of millions of people.

Engineering aptitude is rare, or at least we haven't learned how to mass produce high end engineering aptitude. It's hard to argue that any other domain of engineering has anywhere near the kind of leverage that software does.

Automation has also radically improved the effectiveness of top software performers. Even a one man 'team' with a moderate level of skill can have pretty comprehensive set of automated tests. There is design automation in other engineering fields, of course, but it's especially potent for software because the automation can capture basically everything and because software engineering is also the skill needed to improve the automation itself.

Some of the bimodality may be due to binning what really is functionally separate fields under one name. I've known people who were great at wiring up prefabricated functions to build UIs and simple processes, but wouldn't have constructed a novel datastructure if their lives depended on it. It's hard to draw bright lines because there is a bit of continuum and people grow and change... but there seem to be some pretty distinct categories out there.

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