Ask Slashdot: Why Are American Tech Workers Paid So Well?

Slashdot reader davidwr is "an American-born, American-educated mid-career IT professional." But he's still curious about why American geeks earn more than their IT counterparts overseas: If I'm a mid-career programmer looking for a job, why should I expect to be paid a whole lot more than my peer in India when applying for a job that could easily be outsourced to India? If I do get the job, why should I expect to keep it more than a year or two instead of being told "your job is being outsourced" before 2020? Is my American education and 5-25 years of experience in the American workplace really worth it to an employer?

Should we, as an industry, lower our salary expectations -- and that of students entering the field -- to make us more competitive with our peers in India and similar "much cheaper labor than first world" economies? If not, what should we be doing to make ourselves competitive in ways that our peers overseas cannot duplicate?
What's the secret ingredient that justifies those higher salaries? Leave your answers in the comments. Why are American tech workers paid so well?

Comments

Salary Growth Closes A Lot of Gaps

[mtippett]

Some numbers from my personal experience.

1) Salary Growth. In general, the Indian Salaries are increasing by 10%, US Salaries are increasing by 3%.
2) Salary Scalability. In general, Junior staff are about 5 offshore to 1 onshore. Mid level staff are about 3:1. Senior staff are 2:1.

China used to be a good low cost offshore location, however senior staff are now more or less the same cost (assuming remote team management). You offshore to China for reasons *other* than cost reduction. India will ultimately be no different.

Mid to senior engineers will be generally cost neutral within a decade, junior engineers - not so much.

Near-shoring will likely replace the off-shoring - in some cases it already does.

Former Director of Software Development Here

[localman]

For my dollars, I'd much rather work directly with people who are a committed part of a team. It's tough enough to achieve that with direct hires; I don't think you can do it with outsourcing.

I think part of this relates to the nature of software. People always talk about writing software - but that's the easy part. The hard part is *expanding* and *maintaining* software. And generally speaking people who have a history with the code are going to do a better job of it: faster, and more precise. You can also have a much tighter development loop between developers, testers, and users if you have them all in-house. I used to have my developers spend some time using the tools they built with the people who actually used them for the job (I did this myself as well). You learn practical details that are hard to communicate any other way. And speaking of communication: I had a few outsourced workers (forced on me by upper management) and communication was always inferior.

I'm not saying that there's no use for outsourcing, or that it's always the wrong choice. But my experience is that proximity matters. And history matters. And personal familiarity matters. So one needs to factor all that in when making the choice. And yeah, I think I got about 4x the quality and productivity out of my in-house people as my outsourced people.

Location

[Anonymous Coward]

North American companies are absolutely idiotic about this. They will happily employ remote employees from India who (obviously) never come into the office, ever for a discount. Typically the quality of work output is low as is the knowledge level. At least that's been my experience.

Yet those jobs aren't offered to Americans, and I don't get why not. If you have low skill with computers, but an aptitude to learn, you could do the same quality of work that's being outsourced for $20 - 30k a year. So why not offer the job over here with the same standards? (100% work from home, no expectations that you'll work any standard hours, ever. And if you get the project done early, enjoy the vacation time.) You would be surprised at how many people would take such a job and find it is enough to keep them going and give them the experience they need to enter the field. Sure, if you live in NYC $20k means you'll be dead inside of 12 weeks, but move to Mississippi and it's enough for a single guy to live frugally for the year while he ups his skills.

In fact, honestly, I don't get why companies don't offer work from home for most tech jobs. You get to pay lower salaries for the same work because people don't have to live in extremely expensive cities and you get to save further on not having to have an office.

Work life balance?

[Nkwe]

The United States is known for the hard work of its people. The rest of the world has criticized the US's lack of work/life balance (many say the US spends too much time working, more than anywhere else.) Assuming this is true, it would be a reason that US workers are worth more - in general harder working people are more productive. I would say this is especially true in Information Technology, particularly software development where the amount of time required to stay current and keep up with changing technology is enormous.

As others have posted, the ultimate answer that the marketplace dictates the value, and the labor market place currently values American tech workers highly.

Re:Work life balance?

[AmiMoJo]

Another way of looking at it is that US workers are more exploitable. The lack of safety nets, the need for private health insurance, incredibly high student debt, lack of unions. They all work to make it easier to exploit US workers with long hours and poor conditions.

It seems like the high wages are just to cover living costs, especially in places like Silicon Valley where rents are insane. It also creates a race to the bottom where everyone is competing to work longer and harder than the next guy.

Japan and the EU have laws to prevent exploitation and limit the number of hours people can work a week, specifically to prevent all that from happening. Wages are lower but so is the cost of living. Except for the UK most students don't have massive debts, and getting sick isn't the leading cause of bankruptcy. Except for the UK, there are often rent controls too.

Quality and accountability

[Facekhan]

There is simply a completely different type of employment culture in India than in the US. In the US we are used to interacting with a self-selecting group of immigrants who work really hard and often put up with a lot of stuff under H1 or other visa programs that American citizens wouldn't tolerate from employers.

Back in India though, there is a culture of treating employees like shit, and consequently a culture among employees of working as little as possible. Employers also don't screen candidates well for off-shore call centers and the like because if they are working on a large contract, all the accountability is based on metrics that can be manipulated and the US based business that contracted them probably only cares about reducing their costs.

My Indian and other immigrant coworkers work their asses off. The support teams I deal with in India can't even be bothered to show up to a phone call and are usually incapable of anything more than opening up a ticket with the software/hardware vendor directly.

So Go Ahead...

[rally2xs]

...and hire all foreign staff. When they eventually leave, hire someone else that wants to learn the code base, waste however long it takes them to learn it, and then say goodbye to them when they too go back to wherever they came from.

Or go ahead and outsource the whole thing to half-way round the world, so's you have to talk to 'em at 2 AM when you're tired as F and get stuff screwed up, or alternatively, they're working at 2 AM when the human being is at his worst and they get stuff all F'd up.

We're worth it 'cuz we're here, and won't necessarily be saying goodbye so's you have to retrain a whole new crew every couple-three years. You won't have to repeat yourself to be understood nor listen very, very closely to understand what we're saying either.

But the American business is always going to go for the short-term gain, so go ahead - the people that would have graduated from American universities with software degrees are also smart enough to realize that you're going to skimp on wages, and make them compete unfairly with the rest of the world, and decide to get into some other line of work that is more steady and maybe doesn't even require all that study. There's lotsa jobs with decent, but not breathtaking pay that don't require accumulating a huge debt - maybe they can be OK with being a welder, or a railroad locomotive engineer, or 1 of a 100 different things to do that can't be outsourced and don't commonly involve a lot of layoffs. Hell, some of those jobs even have unions, something that makes it hard to feel sorry for the uppity software bunch that think they're too good to need a union, in spite of actors and pro sports players using them - but nooooo.... software people are too proud to form a union that would sue the asses off some company like Disney that (illegally) hires 250 software people from overseas to replace 250 of their US Citizen software people simply because the furriners will work for peanuts.

If the furriners are at all better at this than than US citizens, then its probably because the smartest US citizens are too smart to put in that sort of time and expense to compete for a job with a US company that's going to s*** all over them and fire them simply for wanting a salary commensurate with living well in the USA for the efforts required to acquire similar knowledge for other more lucrative careers.

So, suck it up, US industry. You created this situation. Just go ahead and suffer when you can't control your cheap labor because... losing your penny-pinching salary isn't worth enough to do what you want them to if they want to go home and you want 'em to stay. Y'all deserve each other.

Less than 1/3 the output

[Tony Isaac]

I currently supervise a team in Bangalorre, along with a couple of junior developers here in the US. The US developers, though only a year or two out of college, easily outperform even the "mid-level" developers from India. The price our company pays for Indian developers is about 1/3 the cost of US developers, but so far, we have not been able to make the math work. Even 3 Indian devs cannot produce the same quantity and quality of output as a single junior US developer. This is a pattern I've observed numerous times at different companies.

This disparity has not been missed by accounting departments. Bringing offshore tech jobs back to the US has become so commonplace that it has come to be called "reshoring." I don't think US tech salaries are in any kind of jeopardy.

Re:Less than 1/3 the output

[eWarz]

Not only that, but in healthcare you are practically required to do so. Having foreign developers touch medical data in 2016 is considered to be a violation of HIPAA. You can attempt to get around the rules, but these days regulators want to see that all code was written by people that can be held accountable if things go wrong. If your app is breached and they find out you used a company in India, you could be in serious trouble.

Reminds me of an old Soviet joke

[melted]

Here it goes: "An old man is lying on a bed in his room. It's year 1917, the Socialist revolution is in full swing. His grandson runs excitedly into the room and proclaims: "The Bolsheviks are winning, there won't be any rich people anymore!" To which his grandfather replies: "Weird, back in our day we revolted so that there wouldn't be any poor people, not to get rid of the rich".

Which is a long way of suggesting: maybe a better question to ask is why the non-US programmers are paid so poorly. TBH I don't think US programmers are that well paid, outside of relatively few outliers. They tend to live in the areas with some of the highest cost of living in the world. That's out of necessity: all the high paying jobs are there. I'd say a good fraction of US high tech professionals is what real middle class is supposed to look like. Not rich, but with a roof over their head and non-zero savings. I don't consider that a privilege. I consider that a bare minimum.

I'm paid well because...

[Khyber]

A. I can rig your entire building for gigabit wired and wireless transfer speeds. T568B all day.
B. I can configure your stuff from MPLS to ASA to software-defined stacks.
C. I can get on-site when your remote access inevitably fails, assuming you're not stupid enough to rely upon cloud-only solutions.
D. I actually speak and understand English.
E. I have other skills that your company might want, and I am asked about quite often (Doorbell job after wiring up their patch panels? $40/hr.)
F. I possess got over two decades of experience.
G. My warranties and guarantees on my work actually mean something.
H. I don't read off a fucking script, nor do I ever need to.
I. And the list goes on.....

The reason is huge

[terminal.dk]

How many great software products have you seen being invented and created in India ? Is the number around null ? Or is it a large NULL ?

There are many reasons why Indians are not really a threat, and it is not only the language problem. It is their culture. Been in a startup in Bangledesh for 3 months, most employees from Indian universities. They work very hierachical, and not independent. It is almost impossible to make an employee choose between a blue and a red ball, we want hios managers approval first. I could not get my employees to to code things using stuff not part of their curriculum. I had to train them in those chapters in their book from university that was not part of their university education. Their attitude is, that it is better do make nothing than to make a mistake. They don't know the word no. They can't say they can't do it, but would rather delay forever.

Now I am in a large company, and the code quality we get out of India, no matter what huge front company we use, is nowhere as good as an average local person with a bachelor in CS can deliver. Their missing ability to think and read documentation, and explore is a killer.

The big threat comes from christian countries, countries with our culture. The threat comes from eastern europe and south america. They think more or less the same way. They can work independent. If they don't get an answer, they will decide on a direction to go. Even if they go the wrong direction, it is stillbetter than looking out the windows until the boss comes around.

And one important fact that you forget is, that brain workers, including IT developers, has a salary way above average salary in whatever country they are from. Personally, I would say it takes 3-5 average indians to be as efficient as an average westerner. that is $10.000-$15.000/month. So there is not good economi in using indian developers if they are available locally.

Outsourcing of jobs is mostly operations, where it is accepted that the level will be much worse at half the cost. And partly development because you can't get the skills locally. Operations today is waiting for the server to burn and then piss on it. Nothing proactively, except from scheduled reboots. So whatever is outsourced to india is not the same thing as the comanies used to get. They get less $ for $. They could save more money by deciding on the same service level with inhouse staff, and fire 90% of IT operations staff, and use external consultant when things are bad. They would even get a better service from that solution. Outsourcing to india is the new black. Everybody does it, nobody is happy, but because everybody does it, it must be the best.

Access is the key

[AHuxley]

The top US universities produced the best students for decades. The US gov and mil looked after the best with funding.
The US private sector enjoyed contracts.
The US gov pushed for the world to accept US standards and tech as part of free trade deals.
So all that creating for a global economy, funding and skill kept other nations locked out and US products as the only option.
Other nations never had that free flowing cash for science, students, the mil. To them it was limited hard currency, a loan or US charity to only buy a US product.
Their best had to be careful with funds or could only get so much out of education, the private sector or their mil.
The US also enjoyed freedom, freedom of speech, freedom to study, read. Its students had a well funded creative and smart side other nations lacked due to wars, poverty, faith, cults or type of gov.
That all worked well for decades. The changes now are a global workforce and a lack of visa tests.
US universities are no longer getting the best wealthy students, giving loans to the best middle class and testing for free access to the gifted poor.
With ever more university students with average ability taking up limited places or been granted limited places for non academic reasons a change will result.
The few really bright and gifted graduates will command the ability to select work they want. With the rest of their fellow students been well below average they have some option in who to work for and will accept a great offer.
The secret is:
The very best US graduates come with security clearances, trust and the ability to attract gov and mil funding. They have been the best in the world for decades.
But with changes to education, a flood of average students been passed now seeking the same granted access to work only the best will command good wages.

I have dealt with overseas IT

[EmperorOfCanada]

Wow, just wow. You haven't been down a darker nastier hole than dealing with an Indian IT company. Employees rotate like there are revolving doors installed in every cubical. No matter how good their English, there is a communication's barrier. Contracts are pretty much brought out on a daily basis. Procedure overwhelms any project; yet the procedure simply protects them while providing no value, but then they bill the shit out of you for that time.

Then there is this strange touchiness about any perceived insult. You say something doesn't work and they will either pretend they didn't hear you, or they will list off the resumes of all those involved. "Mamdoop, graduated top of his class, in a program that only accepts 100 students from over 1 million applicants. Are you saying that you know C++ better than he?" To which I reply, the program is crashing, it is crashing because he didn't do any tests at all and any client ID over 100 will crash the software.

Boom contract time: "Your sample set of clients only had 100 clients." This ignores the fact that the contract also stipulated that there will be 100,000-500,000 clients.

And it just goes on and on and on. Then after you finish successfully managing to sue them in an American court, you see that they are using your company name for a positive reference.

Then there is the endless changing of the contract. Somehow the monthly billing of $40,000 goes up to $45,000 and the extra is for "administrative excesses" and you say no, but it takes months for them to remove it, and as the end comes closer it goes up and up and up with subtle threats about the software ever being delivered if it doesn't get paid.

The best is when one of your own employees turns out to be related to the company in India that got the contract in the first place. You are never able to prove that something scummy happened but your employee gets wildly upset when the contract is canceled with extreme prejudice. Like holy shit losing his mind upset.

Somehow they have created a facade of competence without actually creating the competence. A simple test is how many companies in India are actually making viable software products for themselves. Not the government, not for others, but an Indian Facebook. I don't think that it is possible. I suspect that there are all kinds of Vapourware companies, as they would have that nailed down cold; but a company that does something cool, has lots of customers, makes lots of real money, and doesn't have a government department firehosing money into it.

Without that excellence, why would we go there again? This is why Western Programmers make the big bucks; they deliver what was wanted.

Re:Difference in work product

[AmiMoJo]

The UK might become the new India for outsourcing. Perfect command of English, only 5 hours time difference so at least there is some overlap, similar culture... But much lower wages. As the value of our currency continues to decline and we push for cheaper labour and lower pay, we will start to become very competitive with India for highly skilled developers.

Re:High wages are not a divine right

[MachineShedFred]

India had no wide-level destruction during World War II. China didn't have a lot of infrastructure to destroy - they were still mostly an agrarian society when the Japanese invaded in 1937. There wasn't a single bullet fired in WW2 on the continent of South America, and yet they still don't have the level of industry or world-changing advances.

You're probably right about the advantage over western Europe, Russia (USSR), and Japan, but it hardly explains the idea of American exceptionalism in the 20th century.

Re: Supply and demand

[MachineShedFred]

You do know there are other jobs in IT besides being a help desk phoneslap, right? I know this might be a shock for you, but not every business can run on Quickbooks. Sometimes a company will have a very complex billing structure, based around many factors that make it unique to that business, requiring custom software development in order to make it work. This software isn't written by "IT help desk flunkies" but by real software engineers, working in IT.

People who build data centers, and networks are in IT. People who keep servers running, secure, and performing as best as they can to deliver the information and services that the business needs are in IT.

The help desk job used to be the foot in the door - something you do that helps hone troubleshooting skills and gets people familiar with systems and how they operate, and how they can fail, and what to do about it. But there's other people that put those systems together to begin with - people who looked at systems from different vendors and providers, tested them and discussed the merits of each, and then chose and implemented them. Or, even built and coded the thing from the bare metal on up. All of that is IT's job, and it didn't just magically genesis itself.

Sure, you can say that some of that could be done on contract, or outsourced as well - but the results are usually far poorer than the often terrible results of even outsourcing the help desk.

Re: Supply and demand

[bzipitidoo]

Thing is, that $2/day stuff is a myth. That does not put any value to all the labor of doing everything yourself.

Standard of living is the big factor. We in the US could live on $2/day if we cut everything, and I mean everything. Not just no Internet and cable TV, but no electricity, water, sewage, and road. You could then spend your time working in your vegetable garden and milking your goats so you'd have something to eat, and trudging to the nearby creek for fresh water, trying to avoid all the shit on the trail, hoping you don't catch cholera or some of those lovely intestinal parasites, and chopping wood so you don't freeze next winter and can have a cook fire. If you do get sick, you tough it out, or die. Transport? Walk, or saddle up, or hitch up the wagon. Clothes? Grow some flax or cotton, spin the fibers yourself with a spinning wheel, weave it into cloth, then cut and sew into shape. So what if that takes weeks, what better things do you have to do? Sanitation? Forget the daily shower, you're going to bathe once a week, maybe. You only washed when you were so heavily coated with grime and filth that it was interfering with your ability to labor. Mow the lawn? Ha ha, are you nuts? Send in the goats, dummy! Refrigerator? Without electricity? No, you're going to use a root cellar, and maybe an ice house. There's also canning. Cold? Put on a coat. Hot? Sweat it, A/C is for sissies. Wash your clothes by hand in a wash tub and hang them from a clothesline to dry. That's not too far off from how my great grandparents lived: farm with a veggie garden, no electricity or indoor plumbing, just chamberpots stowed under the bed, except they didn't do their own clothes, they bought factory stuff for that, and they had a well, none of this hauling of water 1km or more.

We've really run wild. Many modern conveniences are great to have, but enable a great deal of waste and foolishness. Many companies made a businesses out of catering to our dumber instincts. The biggest things the daily shower does are waste a whole lot of fresh water, make water infrastructure businesses and shampoo and soap manufacturers richer, and actually make us less healthy by washing away beneficial bacteria! And we do it because we've brainwashed ourselves into believing that body odor is offensive. We've all dealt with suburban sprawl. Car manufacturers have brilliantly exploited our foibles to promote the car at the expense of all other forms of transportation. Then there are expensive hobbies such as boating, owning your own swimming pool, off roading, hot rodding, skiing, or flying your own private plane. Even something less intense on required equipment such as golf isn't too cheap either. So many sports have commercial interests dangling options in front of us to turn it from not too terribly costly to insanely expensive.

A relevant incident is the 2010 suicide of Joseph Stack. He was angry that the government had bailed out big banks but he personally was being audited by the IRS. He flew his private plane into an IRS building in Austin. While I sympathize with his complaints, the fact that he had a private plane shows he wasn't hurting for money.