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If Tech Is So Important, Why Are IT Wages Flat?
dcblogs writes "Despite the fact that technology plays an increasingly important role in the economy, IT wages remain persistently flat. This may be tech's inconvenient truth. In 2000, the average hourly wage was $37.27 in computer and math occupations for workers with at least a bachelor's degree. In 2011, it was $39.24, adjusted for inflation, according to a new report by the Economic Policy Institute. That translates to an average wage increase of less than a half percent a year. In real terms, IT wages overall have gone up by $1.97 an hour in just over 10 years, according to the EPI. Data from professional staffing firm Yoh shows wages in decline. In its latest measure for week 12 of 2012, the hourly wages were $31.45 and in 2010, for the same week, at $31.78. The worker who earned $31.78 in 2010 would need to make $33.71 today to stay even with inflation. Wages vary by skill and this data is broad. The unemployment rate for tech has been in the 3-4% range, but EPI says full employment has been historically around 2%."
If you're a competent programmer and live in the SF Bay Area, wages are definitely not flat, to the point of absurdity. There are kids just coming out of college making $80k or more as a starting salary, and quickly rising up to $120k+ within only a few years of experience.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
flat is rising.
Because IT stuff is easy. I mean, you just type some things and click a few buttons, right? That's not hard. Why do you need 100k a year to do that?
Long signatures suck.
... why do they earn so little? Nobody wants dirty toilets.
Engineers are the dumbest smart people in the world.
Get rid of the guest workers and offshore pressure, then wages can rise.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
The median household income in the US is $52,000 USA Quick Facts
My company prides itself on being "competitive" - which I take to mean they don't pay any more than they have to. The economy is in the tank, so they pay less (or lower raises) - you know, to be "competitive". After all, where else are employees going to go in this job market?
It must have been something you assimilated. . . .
Because of capitalism. Those who do the real important work never get what they are actually worth, as it would cut into the profits made by executives and investors. The labor market cannot ensure that people get paid what they're worth--by which I mean the value they produce--because there's almost always someone willing to do it for less. We under cut each other fighting for scraps, and those at the top keep the bulk of what we produce. This is how capitalism works.
Give me Classic Slashdot or give me death!
I am surprised that it has take the world so long to realise that IT salaries are overpriced. Because the hardware used to be so rare and expensive the people who used it and looked after it were also rare and expensive.Now that the hardware is cheap as chips, and the labor market is approaching truly global is it a big surprise that salaries are flat?
If a bad patch breaks my two year old $500 company laptop or a $200 tablet I am not going to pay somebody to fix it. I replace it and move my data over. There was a time when PCs cost thousands, and servers cost tens of thousands. People won't pay people $100/hr to fix a $200 devices.
I also imagine that it is a heck of a lot cheaper to engage off-shore programmers than using local resources (you can't do that for a truck driver...) - supply and demand in a free market in action.
IT is not being picked on, in particular.
Only the rich are getting richer.
Click that link to see
1) Corporate profit margins just hit an all-time high.
2) Wages as a percent of the economy are at an all-time low.
This is common across all sectors and all skill levels.
The corporations have set things up so that the owners and managers capture all of the profit and any productivity gains. They have also bought enough politicians to keep their tax rates low so they don't have to contribute to the "general welfare". Corporate profits and upper management incomes are at record levels.
The situation with tech wages is the same as that with WalMart employees. You are expendable and replaceable and if you make trouble you will be fired so just sit down and shut up and get to work. At least tech wages are above poverty level so they don't have to go on Medicaid and food stamps to survive... be thankful for small favors.
The last time things were this far out of kilter was the 1930s and that gave rise to the union movement (as well as socialists and communists). This time, people seem more complacent and are just happy to have small crumbs.
I don't read your sig. Why are you reading mine?
NEBS-compliant enterprise- or telco-grade systems still cost tens of thousands of dollars and people definitely pay people good money to work on them.
The company I work for is on-shoring work after figuring out that off-shoring it dropped the quality substantially.
Important != Valuable
The cleaning crew is important. Long haul truckers are important. Neither are high paying jobs.
Every occupation thinks theirs is the most important, and deserving of higher pay. IT is no different.
Not I, sir. I patiently wait for a raise, then leave when its apparent that I would have to ask to get it.
..because the rich man has been engaging in price fixing for wages for the last thirty years across all areas of the economy except executive compensation.
Two (related) reasons that I have heard as to why IT isn't valued as much as it should be (I myself am not in the IT field, so this is more like hearsay):
Clueless PHB: This is partly the fault of those who work in IT not educating those higher up in the food chain. PHBs don't look on IT as producers, but as cost centers. So they try to skimp on hiring competent people. And the IT people don't have direct relations with the clients (in most firms), so when it comes time to decide bonuses or raises, IT is generally at the back of the line. While IT is what allows everyone else to raise money, the PHBs would rather look at a $60k fresher vs. a $120k experienced admin and ask why they shouldn't just outsource it for $45k. They don't see the downside in having a poor IT team even after it bites them (just fire one newbie and hire another in his place).
One admin I know used this solution (based on "You and Your Research" by Richard Hamming) after most of his team were outsourced (not because the team was bad, but because the PHB saw cost savings): everytime the outsourcing created a problem and someone tried to scream at him (he was their internal liaison to the external contractor) he told them to go tell PHB "we lost/cost $X extra because the contractor screwed up." Only when the PHB saw how much the "real" cost of outsourcing IT was, did he reverse the policy.
Taking Credit: As an old saying goes - the competent IT admin fixes problems before they happen. And then the PHB wonders why he is paying $X for new servers and infrastructure when the current system works fine. IT people should be more proactive about boasting about what they do. Sure, this is distasteful to lots of technical people. But guess what? Everyone else brags and lets their manager know (in a not so subtle way) of why they deserve more money: "I sold $YYY to MY clients". So the IT team needs to take credit for sales they help with. If an employee used a lot of resources to construct a portfolio for a client, it isn't all to the trader's credit. YOUR software and hardware helped him run simulations and generate the portfolio. So add THAT to your pitch. If one of the IT workers stayed up half the night so a client could get some figures/data - he should get credit instead of letting the suit tell the story. A knight wouldn't have killed the dragon unless he had a magic sword - but the armorer doesn't get any songs written about him.
The flipside is to be realistic about what you are doing - this isn't the dot-com boom. Don't expect riches for trivial work. If you do good/tough work, expect to be compensated as well (and let your bosses know why YOU are better than everyone out there). But if you just make a CSS/HTML page, don't try to claim you are God's gift to the firm.
One very important point that you may have missed is this -- tech IS very important. Even organizations who don't care about IT beyond basic file and print have a stake in making sure things they use work well. But, IT is one of those fields where you can still cover over massive, huge, big balls of fail with money to the right vendor or cheap labor. Because of this, companies don't like to pay for competent help, or if they do, they squeeze every last nickel out of it that they can because they feel it's a waste.
Also, "tech" is too broad. The desktop support guy changing toner cartridges, the help desk person changing passwords and the systems architect trying to make sure everything doesn't come crashing to a halt when you put it in the same room have very different jobs, skills and responsibilities. On the simple break-fix support/part-swapper side, the work is getting easier and more automated. This means that you can hire fewer people, and those that you do hire don't need to have as much specialist knowledge. I'm a systems engineer, dealing with Intel server boxes every day -- the vendors have resorted to putting an extra "Don't pull this drive out!" light on hard disks so that part swappers don't pull a second drive out of a failed disk array and cause data loss. Even though the failed drive has a big blinky red light on it. That tells me that customers have complained about this happening enough...so you can draw your own conclusions about skill sets. On the higher end, you just run into wage pressure, companies trying to get away with as little as they can.
I think part of the reason for flat wages across the board is just the overall impression that "computers are simple" now, so why do we need to pay these geniuses to run them? Anyone in corporate IT is keenly aware of the "consumerization" trend, where everyone expects all systems to be as seamlessly integrated as their iPad, no matter how complex.
So at least in "big corporate IT," there are a few things putting wage pressure on:
Things like this make IT a very difficult field to work in. I'm not stupid enough to call myself a rock star IT god, but I certainly feel I'm competent and do a good job. Fortunately, I have an employer who appreciates that (for now) and I do OK. The other class of people who are making serious coin in the IT "racket" are the nomadic consultants. How many places have you worked where these guys seem to parachute in out of the sky when a very narrow specialist problem needs to be solved, charge hundreds an hour for months, and are off to the next place requiring that same specialty just as quick as they came in? I know a lot of these guys personally (can't do the lifestyle if you're married or have any sort of ties to any one place or thing) and they're definitely not hurting. For those of us tied down by one thing
If your plumber fucks up you can end up with thousands of dollars in water damage. If your electrician fucks up, your house can burn down. That's why we pay them fairly well and insist that they become certified.
I don't know why you think coding on a large project is easy either. The skillset required is not easy to find, and there are a whole lot of assholes who can make a total mess of your project and cost you thousands in delays and additional work because they don't know what they're doing. That's one of the big reasons you don't see as much coding outsourced these days. 5 or 10 years ago everybody was doing it, and also discovering that the product they got back was of poor quality compared to stuff from their in-house coders. It is very expensive to fix bad code.
I read the internet for the articles.
is that it's hard for a lot of managers to figure out who's valuable. Most smaller shops hire IT staff because they don't have the expertise in-house already. It's not like a cook that hires an assistant cook and can watch them and know if they are skilled or unskilled. I think most IT for smaller organizations are easy marks for unskilled IT, that can be incompetent and still appear valuable because the people doing the hiring and the managing can't properly assess a person's skills before OR after the hire.
And I think this hurts the average pay. I've seen this happen a lot around here, where idiots are working IT for someone and the idiot moves on, leaving behind the managers to think that they need to find a replacement "as good as Tim", and are completely astounded to find that their new hire Jason actually knows what he's doing and is a massive improvement. Leaves them wondering "were we paying Tim too much, or are we paying Jason too little?"
So now at least they know that good IT is worth paying more for, but the rest of the hiring pool out there that hasn't learned that lesson yet doesn't consider their IT all that valuable because they currently are employing an idiot and just have no idea how much more they could benefit from quality IT.
I work for the Department of Redundancy Department.
Want to cry in your soup?
For the middle class, real wages haven't risen since 1978. (chart). Of course the upper class has made out like gangbusters.
In other words, your buying power is the same as your Leisure Suit-wearing predecessors, whereas the rich have accumulated whole closets of never-been-used ivory-handled backscratchers.
Yeah, right.
the "Quit complaining and count your blessings" demands are what we've been getting told for decades by those at the top, "Cry me a river", the sad part is now we repeat it to eachother, ignorant of the fact that they were merely telling us that crap to protect their own raising income. Look at the year-over-year income rise % since the 60s, it is amazingly ridiculous how much CEO income raises have gone up in % over the years, not in total. Also look at the % of population in the middle class vs. % of population in the lower class since the 60s. Come back when you think we should all just keep sucking it up and aren't convinced if we continue to "Quit complaining" the middle class won't be gone altogether.
Last quarter the economy's profits grew quite a bit over previous quarters, however hiring remained flat. Quit complaining and work more hours, at least you've got a job right?
Y'all are making excuses for a much larger phenomenon. The implosion of the middle class. Here's a comparison of wage growth for Americans from 1967 until 2011. Look at the various jumps in the curve. You can see the big jump in the late sixties of the lowest quartile, the clear results of the war on poverty. The economic doldrums at the end of the Carter Administration. The sudden increase during the Reagan first term, but take special notice of how the rise benefits the upper quintile and even more so the top 5% (and if you could see the top 1% and top 0.01% I think you'd see something shocking.) The subsequent fall during the senior Bush Administration followed by the boom of the Clinton years (and make no mistake, the booms during both Reagan and Clinton involved huge economic expansions in industry, heavy industry for Reagan and information industries for Clinton. Then junior Bush's Terms, and here's where it get's interesting. Notice the steady decline in advancement. The majority of Americans are seeing their wages crashing towards stagnation or worse. In fact looking at the lowest quintile, over the last 10 years they've had a 20% drop in real wealth. Even the first quintile has remained stagnant with extreme fluctuation. So this is not just an IT thing. The only folks to see dramatic increase in personal wealth over the last 10 years I in a group smaller than the top 1%.
While that was going on, the real wealth of Americans at large has been disappearing. Here's a brilliant lecture on the looming collapse of the Middle Class and the economic forces responsible for the situations we all face today. Contrary to pundits conversations Americans spend significantly fewer inflation adjusted dollars on food, clothes, appliances and cars. Where they are getting killed is Cost of Housing, revolving credit and loan debt, Medical Insurance and drugs, Child Day Care, Cost of Fuel/Energy, that and there are new expenses surrounding electronic gadgets that have been a steadily growing part of the cost of living since the late 80s.
The Banks (both in banking, loans and real estate), Big Medicine/Pharma, and Energy have put the American Family in such a precarious position, that any small disruption or disturbance results in almost immediate financial collapse. The critical events facing Americans are Death of a spouse, Injury or Serious Illness, Divorce and extended Unemployment. Any of these (singly or in combination) are enough to initiate a cycle of debt, penalties and ultimate bankruptcy. Add to this growing inflation and the erosion of our savings and investments, and you can see that the American Family is under extraordinary financial stress. The American dream for a growing population is just being able to get by.
Adding to that, they are missing the top wage earners, who have retired, and are now including the n00bs who are earning entry level (for their position) wages.
If we went through a recession, and the several bubbles which have burst, and you only track individuals, there are some people who have lost jobs but average earnings are up. This is not a debate about how much people earn, which is where most people above gp were talking about.
The topic at hand is this - if IT is important to the world, why are they not paying IT people more?
The assumptions in the questions are beyond idiotic. As a whole, should everyone in IT be paid more just because we are important to the economy? Or are we just displacing people and earning their salaries?
How many people worked in tech, multiplied by their salaries? And compare that to now?
Adjusted for inflation, we are $2 ahead. How does Victor's quote mean anything when placed directly next to a quote disputing it? Adjusted, we are ahead.
Why Are IT Wages Flat? First paragraph - outsourcing, automation, and economy. WTF are the rest of you babbling on about?
Including all of the people who took retirement or quit for other industries, and all of the n00bs. The rest is explained in the article, leading to b4dc0d3r's law: NEVER read an article with a headline posed in the form of a question.
The real story is the EPI report, second link. Microsoft wants more H1-B visas, which is not new in the least. Microsoft wants to pay people from lower wage countries less money to work in the US. If you spot the conclusion, good for you. Microsoft wants to keep wages flat.
As a large tech employer, and someone who is lobbying for cheap labor, it's kinda obvious to me that dcblogs (submitter) is intentionally misusing statistics, and a poorly written CNET article, to prattle on about H1-B visas.
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