May 16, 2013

The weasels are winning: Software pay falls 2% in 2012

Happy weasel
From Computerworld, an IT trade publication:
Software developer wages fall 2% as workforce expands 
Less costly young, and long unemployed older developers may be expanding the workforce at less cost to employers 
By Patrick Thibodeau 
Computerworld - WASHINGTON -- The U.S. tech industry added nearly 64,000 software related jobs last year, but as the workforce expanded, the average size of workers' pay checks declined by nearly 2%. 
There are multiple theories for the decline in pay, but a common one cited by analysts is simply that the new people being hired are paid less than those already on the job. 
The average annual wage of all workers in the software services sector was $99,000 in 2012, about $2,000 less than the prior year, reported TechAmerica Foundation in its annual Cyberstates report. 
The foundation is an affiliate of the industry trade group TechAmerca. It uses Labor Dept. data to assemble its report. ...
The Cyberstates report puts the tech labor force at 5.95 million in 2012, an increase of 1.1% from the prior year. Of that, 1.87 million workers are in software services jobs. 
Software services, which includes government defined labor categories software publishers, custom programmers, computer facilities management and other computer related services, are the best paid and the largest segment of the tech work force. 
The next largest, engineering and tech services, employs 1.62 million. Wages for workers in this segment increased by $1,500 to $92,500. But unlike software services, job growth was modest, increasing by only 11,300 last year. 
David Foote, the CEO of Foote Associates, which analyzes IT hiring trends and wages, said the supply of workers in the software services segment "is plentiful. Of course, there are many unemployed workers who want to get back to work."
Employers, consequently, did not need to offer generous wage packages to fill many of their jobs. "In fact, [employers] could get workers pretty cheap," said Foote. 
Foote said the IT industry-specific Cyberstates study doesn't include all tech workers. Working against the wage decline is high demand for certain software skill sets, which puts upward pay pressure on certain jobs that are harder to fill, he said. 
Victor Janulaitis, CEO of Janco Associates, a research firm that also analyzes IT wage and employment trends, cited a number of reason for the decline in wages for software professionals. First, technology is becoming easier to implement without having an IT professional, he said. Also, the option of turning to outsourcing creates less pressure to increase wages. 

But, as Mark Zuckerberg tells us, this is just a start: the United States government must help him drive down wages even farther. Zuck getting even richer at the expense of his workers is Good for the Economy.


Anonymous said...

I thought they were beavers, not weasels.

But ever since the Gang of Eight went live, the new threads have been coming so fast and furious that I haven't been able to keep up with everything in these parts.

Anonymous said...

"Now take a moment and imagine a Mother's Day Parade in the suburbs of Denver, a neighborhood in Edina or a plaza in Austin where bullets rain down on civilians and even hit children. I can't help but imagine the around-the-clock news coverage. And I can't help but think it's because most of America can identify with the fear of being bombarded with gunfire while just enjoying a parade in the middle of town. But America can't identify with being at a parade in the "inner city" where "gang violence" erupts. The "oh my God, that could happen to me" factor isn't present with a story about New Orleans or the Chicago southside.

But no matter where the incident occurred, the victims are still there. Victims like 10-year-old Ka'Nard Allen whose father was stabbed to death in October. Whose five-year-old cousin was shot to death at Ka'Nard's birthday party last May (Ka'Nard was also shot in the neck that day). He was also grazed with a bullet in his cheek at the Mother's Day parade. No matter what part of the country Ka'Nard is from, his story should linger in your heart."

Cail Corishev said...

There are multiple theories for the decline in pay, but a common one cited by analysts is simply that the new people being hired are paid less than those already on the job.

Well, duh. I can only think of two ways for average pay to decline: outright pay cuts (which are still rare), or new hires getting paid less than the average. What are these other "multiple theories"?

David said...

>There are multiple theories for the decline in pay, but a common one cited by analysts is simply that the new people being hired are paid less than those already on the job.<

A decline in pay is caused by people's being paid less? How much are these analysts paid, anyway?

The Radical Centrist said...

you are on a roll, steve. Loving it. However, your readership probably doesn't love it. Many of them have been taught to idolize the rich. Who would have thought that both mainstream Left dogma and mainstream Right dogma have been subverted by the plutocrats?

Anonymous said...

No radical centrist, most of us do not idolize plutocrats. Perhaps you're thinking of Economist subscribers.

-The Judean People's Front

Anonymous said...

Africans finally open and run their own factories. Gives whole new meaning to 'infant industry'.

Hunsdon said...

JPF: I thought it was my turn to hit the Radical Centrist. However, you're doing a good job, I'll take the evening off.

pat said...

I know something about this issue - from several perspectives.

First of all I supervised a group of Russian and Ukrainian software engineers a few years back. Almost all of them were here on an H1B-Visa.

Secondly my lifelong friend was the guy at the San Francisco office of the federal Labor Department who was responsible for regulating these visas in the Bay Area and Silicon Valley.

Third I have another friend and former employee who is fine coder but unemployed.

The telecommunications company I worked for had been established by Russian Jews who were admitted to the US under some kind of sanctuary policy. They decided then to hire young Ukrainian and Russian software engineers. The head of the company was not technical. I worked for his nephew who was also not technical.

BTW I learned that Ukrainians were almost all anti-Semites. They blame the Jews for the Stalin era genocide. Until I figured this out I was baffled by the company's internal hostility.

I was the only technical American in the building. Most of the marketing and sales people were Americans but I was on the technical floor where I was the only native American. Some units there had no English speakers.

Some of these H1B visa coders were brilliant but some were complete dolts. I had a former KGB major who had been responsible - so they said - for targeting ICBMs on America. We were all relieved because he was just about the stupidest programmer I ever knew. Had there been a nuclear war we would have been safe. Mexico and Canada however might have been in trouble.

My Labor Department buddy is not technical. He used to ask me what he thought of as technical issues. I don't remember what were all the issues then but I do remember that they were ridiculous. He was struggling with some bureaucratic doctrine about whether there were any coders in America. He was the ablest guy in the Labor Department - that's why he got this job - but he didn't have a clue as to how the real labor market worked. He once asked me if there were any 'C' coders in the Bay Area. He didn't get it that the number of C coders expanded and contracted with prevailing wage rates. When I needed to become a C coder myself - I just did it. Coders emerge when wages are high.

Lastly I have a buddy who is unemployed now but was a excellent coder at another place I worked. This place was an Internet start-up. None of the people there were immigrants on visas.

I inherited a staff who were very weak technically. The reason was simple, the HR director thought programmers shouldn't be paid much. Half of the guys he had hired were hopeless, but he wouldn't know that.

I fired many of them and then had to struggle to hire replacements in a market where everyone paid more. I did eventually get some good people but it was hard. I had to do a lot of recruiting and a lot of interviewing.

The lessons are: non-technical people always hire the wrong technical person, and the number of available technical personnel is simply a function of salary. Pay more get more. There is no need to import anyone.


x said...

now you've made me miss cartoon network.

Anonymous said...

I'd pretty much second Albertosaurus. It's easy to forget there was a time--just after the end of the Cold War--when silicon valley was briefly full of Russians (many Jews, but also Germans, Ukranians, and some actual ethnic Russians). Many seem to have made a bundle and moved on or back, some still remain.

It wasn't that long ago, but there seemed to be a lot fewer Indians. The Indian outsourcing firms institutionalized the whole business of taking advantage of US immigration law.

A lot of MBA types, often in the upper levels of large tech companies, have bizarre ideas about technology and engineering. Many truly don't seem to get it. They shouldn't be driving our immigration discussion.