The salaries for software developers have been stagnating for the past 10 years. The 2015 Dice.com Salary Survey puts the average income of someone in the tech field to be $89,450, which sounds great compared to the 2003 value of $69,400 until you factor in that nasty little ne'erdowell known as inflation. Adjustment on the 2003 value of $69,400 equates to $89,750 according to the US Inflation Calculator, which means salaries today are actually lower in real terms than they were at the start of the century.
Deteriorating working conditions
And let's not forget about all of the bellyaching we've been hearing lately from the software developers who are toughing it out down in the trenches of the big tech giants. A recent New York Times expose on working conditions for white collar workers at Amazon may have opened the eyes to the average Times reader, but it didn't come as a shock to those who actually make their living writing code and managing software projects. Ten years ago software jobs not only came with generous salaries, but the package also included housing allowances and a beer keg in the break room. Now it's considered a benefit if you only have to work a 60 hour week.
So why are software salaries so depressed? A quick look at job boards like Monster and Dice would lead one to believe that there's a massive demand for software developers. And it's not like the IT landscape hasn't been evolving over the past decade. From the proliferation of cloud computing to the pervasiveness of mobile applications, there has been plenty of change and upheaval that should inevitably lead to an ongoing increase in demand for software professionals who are adept at the latest technologies. But sadly, that simply doesn't appear to be the case.
The San Francisco salary paradox
Most interestingly, the most depressed wages would appear to be in the San Francisco Bay area. Technically speaking, bay area developers actually demand the highest salaries, up in the $120,000 range on average. But the fact is, that's a subsistence wage in San Francisco where a small detached bungalow in the suburbs can go for $2.5 million. A 5% interest rate on that amount alone would incur an annual interest rates of $125,000, which would more than consume that $120,000 salary. Add on property taxes and some of the highest state taxes in the nation, and someone who would appear to be a well paid IT professional is probably having a pretty hard time making ends meet.
So why is it that salaries are so depressed? Is the demand for software professionals just an illusion caused by the rotation of developers in and out of short-term projects, creating the appearance of demand when really nothing has ever changed? Or maybe it can all be blamed on India, where outsourcing firms like Tech Mahindra and Tata Consulting have flooded the market with highly capable software professionals who are willing to work at significantly lower rates?
Is outsourcing to blame?
Maybe software developers themselves are to blame. In Canada, when foreign immigrants started taking low wage farming jobs away from local workers, new laws were brought into effect under the Temporary Foreign Workers program. A great deal of political hay was made as the government stepped in to save the wages of low income Canadians. But the IT industry has been flooded with foreign workers on TN1 and H1B Visas who are paid a fraction of the wages paid to natural born citizens. Part of the TN1 and H1B programs is the requirement that workers are paid a competitive wage, not a cut-rate wage, so the laws already exist to prevent an undercutting of existing salaries, but sadly, there has been no political outcry from the completely unorganized IT developer industry, nor has there been any political will to step in and protect the wages of these middle-class workers.
It has been suggested that there is a software developer shortage, but if there is, it certainly isn't being reflected in the salaries and working conditions of the average software developer who is diligently doing their daily grind. And it's a shame, because software development is a highly specialized skill that is far too often undervalued. It's too bad there's nothing being done about it.