Is developer compensation becoming bimodal?

Well the first rule in developing is 'lifestyle', I agree with you 100% that if you willing to work in a shit-hole be that east-coast or houston, or any shit-hole in USA, sure there will be a job,

But if you want to live in a nice place, say San Franciso, and make enough to own a house and eat out every night, then its not what you know, but who you blow.

I agree with you, but say your FORTRAN programmer, chances are he's been doing the same thing for 30+ years, and he miserable and unhappy, sure he's got a job, but does he have a life? NO

Take a few years off, then go back, and see how hard it is to find a job, most employers only hire people who stay employed,

The jobs your describing are the dreg jobs of the IT industry, I think some ugly disease would be preferable to working in a fortune 500 company post mid-life, unless of course your the CEO/COO/CFO

It's always been this way, if your willing to live in a shitty place, there's always a job, the problem is getting a job in the good places, and a good job.

Yes, there is always defense, you can always get a job with the GOVernment, now there is a hell on earth.

I agree with you about the kids, I know its hard for most kids today to get in the door, mostly cuz they have no work schools, and only the very lucky get hired at graduation, again its who you know

In summary my sale is on being your own boss, and not ending up when you 50+ years old being somebody wage slave coding cobol, In Dearborn Michigan.

Developer compensation is high because developers produce more valuable work, and in the short term the labor market isn't that efficient. People don't make very efficient initial choices of career, and their initial choices are fairly sticky.

In the middle of a gold rush, how does it happen that people change their plans, and go out and mine the gold, sell the pick-axes etc? Dropping your plans generally sucks. All else being equal, you'd rather not. And you probably know less about the opportunity than the one you're pursuing. Because not everyone is going to drop everything and go mine gold, if the gold mining is profitable, the people who do pursue the opportunity are going to do very well. And that'll continue to be true for a long time — because people just don't respond to these opportunities that efficiently.

As a comparison: in Australia during the mining boom, the salaries available for work in the mining industry compared very favourably to other industries. And yet I knew lots of smart high-school grads starting degrees in fields like chemical engineering, aerospace engineering, computer engineering...Smart kids would eagerly enroll to study fields where there was no industry to speak of in Australia; even though a lot of them weren't planning to move overseas. In the meantime, salaries for mining-related fields were sky high.

My hand-wavey, empathic read on this is that following price signals into a field you don't have a particular affinity for feels somehow wrong. I think smart kids are very vulnerable to this sensation. They feel like simply going into the high-paying field is somehow too "obvious". It's an affront to their sense of individuality. I think the small/large company thing is in part a similar effect.

Funny thing that I was having a discussion with one of my friend who is in the middle of salary negotiation. The company is pushing him hard to accept the offer well below than his expectations and he was expecting more hike as he was relocating to bay area. He was quite disappointed that he didn't get the salary figure he was expecting but still wanted to accept the offer as he didn't want to loose the opportunity. We discussed at length about how the salaries in software ended up like this. Why are they not transparent like finance guys, lawyers, doctors etc. This is also the standard structure across the world for all software industries irrespective of the country. The salaries are not transparent and the developers are kept in dark.

How did we end up like this? Is it not a bad thing for the company that employees are demotivated when their pay sucks? I feel it is a very basic thing. To make more profits you need to build better products and sell better. How much can you save on operating costs by paying employees less?

I feel the companies & HR needs to modernize itself. There was a time, you could get away by paying a particular employee less and he may never find out. This is an Information age!! Information freely flows. There are many sites like Glassdoor, Paysa where people can go and find out more about salaries that you are paying to your employees. It is no longer a well kept secret. What is required here is that companies and HR's understand this and make salaries open and relevant to the value produced/added to the company.

Since the early managers probably didn't understand the dynamics they went with what they could do best at their time. I feel this model of negotiating a salary based on previous salary should be deprecated. It should be replaced with a more open model.

It doesn't hurt much to know that the next guy is getting paid more than me, if that guy truly deserves it and produces much better code or is adding more value to the company than me. What hurts more is that to know that the company values the other guy more and pays him more just because he is straight out of college or gets lucky at salary negotiation.

I think it is time Developers & Engineers talk more freely about their salary.

  > Programming also doesn’t have a licensing body limiting the number of programers,
  > nor is there the same prestige filter where you have to go to a top school to
  > get a well paying job.

This is my favorite quote from this article. I went to a great school and even though it wasn't Berkley, Stanford, MIT, or CMU, that qualification has never limited my ability to get great opportunities.

200k isn't that rare for senior engineers in large firms in NYC or the bay area.