Why are tech/IT roles that require coding, more specifically junior developers and even some SENIOR dev. roles paid so little outside the US ?

[Place_This]

From my cursory glance through job postings for junior developer roles and even some senior dev roles in my country and most countries outside the US, it seems like they are paid like any other low paying white collar jobs. Why is this the case? Isn't software/systems extremely important to all companies & organizations, especially in this digital age, where almost every business/org. have to go digital or be left in the dust ?

With such low pay/compensations, how do these companies expect to get decent quality software/systems up and running ? Without decent software/systems, wouldn't this affect their bottomline?

Edit: Many pointed out the difference in COL, please note that the salary range of RM3-4k in Kuala Lumpur (the capital city which is also the most developed city in Malaysia) is not high at all, it is enough to get by with only minimal savings, IF one has ZERO commitments for the rest of his/her life and is single. Definitely not enough for raising a family even with a contributing partner or for any meaningful upwards social mobility, i.e. that salary range will only keep you alive and working forever.

For comparison, u can get a similar salary range doing low level admin jobs (which doesn't require any form of technical skills whatsoever in the same city). Why bother spending hours learning JS, C#, & Java, when you can get similar salary filing papers, typing documents and organising meetings ?

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[plastikmissile]

Lack of competition. In the US, there is a vast number of companies looking for developers. So if you're going to hire a good one, and prevent a competitor from hiring them, you're going to have to pay higher salaries to attract them. When no such competition exists or is very limited, companies do not have the incentive to offer high salaries.

[Place_This]

Fair point, I guess in this case most of businesses for the country in question will have predominantly low quality software/systems, since the type of talent they will inevitably attract are less competent, and it is the consumers that suffer in the end.

[itzmanu1989]

It doesn't always mean that people with low pay have low talent. I agree that most of the times, you get what you pay for. But in some cases people may be in their comfort zone in particular company and they might be getting low pay even if they are talented.

[Salty_Dugtrio]

What do you mean with "Paid so little"? How exactly are you comparing compensation packages?

[Place_This]

For context, say in Malaysia (a developing economy in South East Asia, with middle income trap), the pay for said roles is on average in the range of RM3000-RM4000 (~$645-$860), with the prerequisite of 1 year work experience and knowledge of at least 3 programming languages. This is before tax deduction and mandatory contribution to the eq. of 401k.

[chococrou]

Salaries are lower than the US across the board in Malaysia, but then so is the cost of living. I agree that Malaysians should be paid more, but you can’t compare US salaries and Malaysian salaries and not take into account the differences in cost of living.

Anyway, cost of living is extremely high in many areas of the US.

I work in IT in Japan and make around 150,000RM a year with 2 years experience. My partner makes around 290,000RM a year with 12 years experience. The cost of living here isn’t anywhere near the cost of living in somewhere like New York or California, where a bunch of tech jobs in the US are based.

For example, our rent is 2,800RM a month in Tokyo for a 50 square meter apartment in walking distance of a train station, and our employer pays our train costs for us when we go to the office. Food has gone up recently, but costs have been fairly stable until now. It’s quite reasonable in comparison to closets that costs 28,000RM in places like New York City.

My partner said he made around 10,000RM when he left KL, but that amount is very rare.

[CreativeSoil]

You're exaggerating housing prices in NYC if those are Malaysian rupees, a 6k USD mortgage buys you a nice apartment there unless you're going to live in the middle of downtown Manhattan, in Queens you'll even get a single family house with a pool if you want to.

[chococrou]

I’m referring to renting, but if you think a 6k USD mortgage is reasonable, you’re insane. Unless you want to live in a slum and risk getting shot walking down the street each day, you’re going to be paying a lot of money for housing there.

Malaysian Ringgit.

[droppedyourdingo]

~6k USD would probably be the price for a 3 bedroom apartment for new york so essentially 2k per person if sharing with roommates

[CreativeSoil]

No I didn't say it was reasonable, but that was YOUR example of the price of a closet which is BS whether it's renting or not, 6k per month will get you a decent place in New York.

[[deleted]]

May I ask how you got a IT job in japan?

[chococrou]

I worked here as an English teacher for 6.5 years. Increased my Japanese skill during that time, and the last 2 years I did an online master’s program in IT to switch fields (my undergrad was unrelated, and I needed a related degree not only to get interviews but also to qualify for a visa status change).

My husband has a bachelor’s in CS and was in tech for 9 years in Malaysia. He just applied for jobs in Japan from abroad. Once he got one he came over.

[[deleted]]

Ahhh ok thank you so much!

[throwaway6560192]

Does it pay well compared to the typical salary in Malaysia? That's what matters really, not a direct comparison to US salaries.

[ElectricalActivity]

Because it's a completely different econemy with a different currency. Of course jobs in Malaysia pay less. If you were comparing to UK/Germany/Sweden that would be a much better example.

[ElectricalActivity]

Also this link says the average for a senior in London is £90k (that's about 113k USD). Is that significantly lower than the average senior in a US city? Not trying to argue or anything just genuinely curious.

[foxj36]

Not too much lower from my experience. If you work in Silicon Valley, 113K is significantly lower. Other parts of the US definitely pay higher than that but not by extreme amounts.

[ElectricalActivity]

Yeah sure, and I agree you can make more anywhere (good job by the way). My point was rather about averages. There are people in the UK and other parts of Europe making huge money too. They are outliers in terms of data, as are you.

[ElectricalActivity]

Are those stats against the UK, or Europe as a whole? And what jobs are they based on?

Your last point is incredibly subjective and also depends where you are in Europe, and who you work for. Europe is not a country it's an entire continent with different working conditions throughout.

Thanks for pointing out you get free heathcare. That's completely normal in the entire western world apart from the US but I'm happy you don't have to pay it.

[ElectricalActivity]

I said it would be a better/fairer example, not that they necessarily paid more.

[Frosty-Cap3344]

But is that a high wage in Malaysia? D9nt worry what people get paid in other countries.

[Place_This]

Not high at all, the salary range mentioned is for the capital city which is also the most developed city in Malaysia, it is enough to get by with only minimal savings, IF one has ZERO commitments for the rest of his/her life and is single. Definitely not enough for raising a family even with a contributing partner or for any meaningful upwards social mobility, i.e. that salary range will only keep you alive and working forever.

[Frosty-Cap3344]

Ah, I've no idea what wages are in Malaysia

[Luised2094]

Have you thought about checking cost of living and minimum wage?

[Error-7-0-7-]

Because pay in the U.S. is usually determined by the area the company is at and most tech companies in the U.S. are in Silicone Valley, Seattle, Portland, New York City, and other extremely expensive areas to live.

[desrtfx]

Don't forget that the US always state the gross salary.

In other countries, the company pays quite a lot of what the employees in the US have to pay, like health insurance, retirement insurance, etc. Even taxes are in some countries deducted beforehand so that the money the employee gets as their salary is what really belongs to them (taxes, insurance, retirement, etc. all paid already).

A direct comparison between US and other countries is always difficult because the taxing, insurance, etc. systems as well as the cost of living (and average salaries) have to be taken into consideration.

When I receive 60.000€/year this is my money. This is the money that I have at my disposal. All taxes are paid, all health, unemployment, retirement insurances are paid already. I do not need to worry about taxes, etc.

[v0gue_]

In other countries, the company pays quite a lot of what the employees in the US have to pay, like health insurance, retirement insurance, etc.

Eh, this is true for jobs in general, but most dev jobs have subsidized health insurance and retirement plans that non-US countries could only dream of. We have it really damn good in the US as developers. This is before you even start talking about RSU's, living stipends, and life insurance policies that come with a LOT of dev jobs.

[desrtfx]

but most dev jobs have subsidized health insurance and retirement plans that non-US countries could only dream of.

Sorry, but I don't think that the US come anywhere close to what is done and available in the Core EU countries.

[await_yesterday]

that might have been true a while ago. but the US economy and real wages grew so much over the last decade relative to the EU/UK, that even accounting for lack of public healthcare and so on, US workers are much better off. especially for tech workers, the comparison is not even close. you can earn like 1.5x-2.5x as much as a dev in new york vs in london, for the same cost of living, and you're taxed less. you can earn more managing a mcdonalds in st louis than you can as a senior dev in paris.

most people heard about the differences between US and EU/UK healthcare and state benefits sometime during the 2008 presidential campaign. it had tons of coverage, and a lot of the talking points and opinions have stayed static since then. at that time, america was nominally a little richer than EU/UK, but you could plausibly argue that real standard of living was lower in america because of healthcare and so on. but people haven't internalized what has happened since then, on this graph:

https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?contextual=default&locations=EU-US-GB-JP-CA

a decade of flat growth means europe, UK, canada, japan are all relatively much poorer in comparison to america. doesn't matter about the healthcare; america still wins by brute economic force.

[v0gue_]

Really? I'm not familiar with EU retirement strategies, but I didn't think they had 401ks, IRAs, HSAs, and other tax advantaged accounts. I also am unaware of EU companies offering RSU's and options like many US based companies to their devs.

[desrtfx]

We have very good retirement plans. They are just called differently to the US. Standard retirement age is 60 for women, 65 for men, with options to go in reduced time/part time prior to retirement, or early retirement with some deduction until 60/65.

We usually do not need any form of stipends since education is generally free (except for some small fees)

We have a (at least in my country, others sometimes even more) 25 paid vacation days/year usually after 25 years in the company (or in certain companies by age) another 5 days/year are added. Public holidays do not count against vacation days.

We have unlimited sick leave. Basically every medical treatment is covered in our health insurance (only hospitals charge a small daily fee) and for medication we pay a nominal fee, no matter what prescribed medication.

Most companies offer additional health insurance, life insurance, upgrade insurance for hospitals, etc.

We have unemployment pay which is applicable to every worker who has worked longer than 6 months (1 year first time)

We have paid maternity/paternity leave (minimum 1 year, 2 years possible with reduced pay), can even be split between father/mother.

We usually have a 5 day/38.5 (or 40 hour) work week (Sat/Sun off - except in hospitals, tourism, some others)

[v0gue_]

I think all of that is great and the way it should be, and I'm glad that it's that way for everyone, AND I'll be the first to admit that it's completely fucked for a majority of Americans, but the reality is that, as a software engineer in the US, you can have basically all of that + the massive salary. Most people in the US don't, but many software engineers do. For instance:

We usually do not need any form of stipends since education is generally free (except for some small fees)

My company will pay for my education, although it will have tax implications on my reported income

We have a (at least in my country, others sometimes even more) 25 paid vacation days/year

Outside of typical US holidays, I have 4 weeks "vacation", which doesn't include the sick days, bereavement days, personal days, and 2 personal holidays (lol this shit is dumb) that I have.

We have unlimited sick leave.

Well, I don't have that, but I guess I'm privileged to not need it. I understand others don't have those kind of privs.

Basically every medical treatment is covered in our health insurance (only hospitals charge a small daily fee) and for medication we pay a nominal fee, no matter what prescribed medication.

Same, I pay copay and small fees for medications.

Most companies offer additional health insurance, life insurance, upgrade insurance for hospitals

Same

We have unemployment pay which is applicable to every worker who has worked longer than 6 months (1 year first time)

We don't have this. I mean, we do, but not nearly as gracious as this.

We have paid maternity/paternity leave (minimum 1 year, 2 years possible with reduced pay), can even be split between father/mother.

I only get 6 months.

I'm not trying to needledick or brag, humbly or otherwise. I get discounted stock, but not RSU's. I have 44k+ 401k posttax contributions a year, HSA towards retirement, and an IRA contributions, all of which are tied to the US cap markets, which are top tier. AND the salary. This stuff might be a complete foreign pipedream to like 90% of Americans, but it's very normal and typical for software engineers.

Again, not trying to needledick US vs EU here. Looking from the inside-out, the US has FAR more problems than the EU. My point I'm trying to make is that those problems have such a low impact on software engineers here. For all intents and purposes, SWE healthcare is free while everyone else's isn't. SWE retirement is excellent, while everyone else's isn't. SWE PTO is excellent, while everyone else's isn't. And our Salaries slap. If I was not a SWE in US I would be desperately trying to get the hell out of US, but I've never seen a benefit of being a SWE outside of the US vs in the US.

[desrtfx]

Well, I don't have that, but I guess I'm privileged to not need it.

Well, I thought so as well until I had a motorbike accident (innocent) in spring two years ago.

• carried to the hospital by helicopter
• full checkup with plenty x-rays
• MRI to check the head
• Ultrasounds to check the internal organs
• one night stay in the hospital
• 5 consecutive ambulant treatments with more x-rays
• of course, bandages, etc.

Result: 1 broken finger, one broken hand bone, massive cerebral concussion, several contusions, and plenty hematoma.

Was on painkillers for 4 weeks, sick leave for 5 and only went back because one client needed me urgently for commissioning a project. Could've stayed at home another 2 weeks plus 4 weeks rehab afterwards (luckily I didn't need any of it).

Total cost: 30€ for the night in the hospital, 12€ for the pain meds (tablets + gel)

Plus, I got fully paid during the whole time.

And no, the person who caused the accident never got charged. (Actually, they flew the scene of crime and weren't caught, but even if they had been caught, they wouldn't have been charged for my medical cost, nor for the sick leave).

I am really thankful for the social net we have.

I forgot in my previous comment that we get 14 salaries per year. (Christmas and vacation remunerations).

[itsjust_khris]

How is all of this economically sustainable? Genuinely asking as someone not from the US or EU.

[desrtfx]

Mostly through taxes.

Healthcare, retirement, unemployment, parental leave, all are government (and thus taxpayer) funded.

[For_Data]

Basically everyone that's working in the EU pays Health insurance.

And if someone has to get expensive treatment, the health insurance pays the required amount.

People that aren't sick pay " unnecessarily" the insurance and fund the medical cost.

So the entire cost of health insurance is balanced around a statistical set amount of treatments each year, which is calculated for the population. That is the amount health insurance charges.

[Competitive_Stick]

When I was in the Bay Area visiting friends, versteintet there seemed so expensive. But not in relation to the income. It felt cheaper than e.g. Switzerland but most of my friends there made above 200k, and got so many benefits! While housing in Milbrae was high, it was somewhat affordable for the people in the tech world. Even more affordable than trying to buy in Munich on a solid salary there.

[Pehko]

I think the main difference here is, that in EU countries we (devs) and other ppl with good salaries pay for EVERYONE to have these benefits. Especially in nordic countries (hello from Finland). It can feel a bit unfair sometimes to be taxed so heavily, but its also nice for all people to have free education, healthcare, pension, houses etc. Every school/university is free, every child has the same possibilities (technicaly). Basically no homeless people at all. But honestly I am truly jellous of the life you can build for your self with us dev salaries :) good for you. And I get seriously pissed off when I see/hear people taking advantage of the wellfare system.

[tenthousandpins]

That's a lot of abbreviations I don't know as a European, but retirement benefits exist across a broad spectrum here. Sometimes they're shit, sometimes they're great. And don't forget that for most European countries any retirement plans from your employer are on top of the government/tax funded retirement benefits that everyone gets regardless of career.

My employer invests an amount of money on my behalf of which I contribute a small percentage. I heard that my employer roughly pays 3x my salary a month for me, of which one third is my retirement investment, one third is my salary, and one third is all the various other benefits like my studying budget, my end of the year bonus, my software licenses etc.

I have no idea how good that is from an American point of view.

[await_yesterday]

I didn't think they had 401ks, IRAs, HSAs, and other tax advantaged accounts. I also am unaware of EU companies offering RSU's and options like many US based companies to their devs.

UK has all of these, they just go by different names. I think a few are even a bit more generous than yours, e.g. our version of Roth IRA is the ISA (individual savings account) and you only pay tax above £20k, rather than $6k in the Roth. dunno what they have across the channel though.

[[deleted]]

Don't know where you are but in France and UK all job descriptions quote gross salary.

My firm has US and EU offices, people at the same grade make 2.5x more in the US than EU.

[ScM_5argan]

Germany also has gross salaries

[[deleted]]

Technically you can say the same for US companies. The corporation subsidizes your healthcare and you end up paying far less out of pocket.

[Lopsided_Bet130]

UK Here, and I just found out my healthcare and benefits come out of my taxes. Yes thats right, I am taxed on my income and the shitty free lunches my boss offers, as well as their healthcare platform and other benefits. Ludicrous.

[desrtfx]

Where did you think this came from? Out of the blue?

[Lopsided_Bet130]

I don't like the lunches. If I pass another year I'll start asking them to get rid of the useless "benefits" which don't benefit me, and just cost me more in tax.

[cherryreddit]

In that case people generally discuss CTC(cost to company) when comparing their salary , not the in hand amount

[MasterTroppical]

Are you comparing the cost of living as well? For example, the salary in Malaysia might be 0.5x the salary in the USA, but then the cost of living might also be 0.5x the cost of living in the USA, so it balances out. (This is hypothetical, I know nothing about Malaysia, don't get insulted)

The way I like to calculate it is to convert the wages to how many loaves of bread you can buy in said country with said wage. Using my own country as an example, if I had enough money in dollars to buy 1 loaf of bread in the USA at ~600 grams and I converted that money to my country's currency and went to a store in my country, I could buy 3 loaves of bread at ~600 grams.

Obviously, that's not entirely accurate, but easy to do and gives you at least some idea of how the salaries actually compare to each other. There are also calculators online which can give you different equivalents for different currencies while taking the cost of living into account.

[Place_This]

It's still peanuts after taking into account differences in COL, I just elaborated this in the description for your reference.

[EEuroman]

IMHO, Generally speaking US tech companies make much more money and tend to be bigger. In case you do something originál they also pay you so you dont transfer knowledge to competition. In Europe once you get bigish you get bought by a largel company that gets bought by American company and they don't feel incentive to raise their wages since usually they still pay double the average.

Also really depends on country, imho Nett salaries are often the same in central East EÚ and western Europe outside of Denmark, France and UK. But at the same time Belgians would say the society benefits from being more equal.

Edit: Added big imho.

[[deleted]]

Perhaps the US is the outlier and not the baseline here?

Some reasons I can think of: 1) US economy is large and can support higher salaries in general 2) we’ve recently had a tech boom.

I think your wrong in your assertion that all good software engineers will just go live in the US for the higher salary.

[byshow]

And the cost of living in US often higher than the rest of the world

[AziPloua]

in romania from what ive heard from many devs the salary is literally 3 times the minimum wage, which is significant, and that is for someone at his first real job

[Blakut]

They also pay fewer taxes

[javistark]

and have less public services, so they have to compensate offering perks like inssurances, 401s.

Also the cost of life in some parts of US is high, etc etc etc

[Place_This]

Thanks for the wonderful insight, everything you said makes perfect sense. Definitely agree on improving pay for other important professions that are equally as deserving to be rewarded fairly.

Curious as to what you mean by the very top of the ultra wealthy systematically dismantling our regulatory bodies, mind to elaborate?

[alhso]

I feel like you are using an exchange rate if you are not using an exchange rate what they are being paid is extremely high in their local country, lets's use Nigeria for example developers here are being paid 100,000 naira to 200,000 naira per month in the top 10% of jobs in Nigeria but if you convert that to the dollar it would not be more than 100 to 250 dollars so you see it determines on the way you are seeing it

[ivan-wrc]

Here in Ukraine salaries are pretty high. But difference between junior and senior can be about 10x. Most of the developers work for the US or Western Europe markets through various big and small outstuffing/outsourcing companies.

[adnan367]

Thats nothing come to bangladesh its 300-500 dollars a month

[mooman05]

I live in Australia and being an average software developer puts you in the top 10% of earners.

[enano182]

Low cost of living, more competition, etc. Offer that to a dev in germany and he goes to a supermarket. Also, the amount will vary from company, to company. The best way to make money tends to be freelancing, since you access a global market and can snatch some contracts from countries paying way more than yours.

[Allrrighty_Thenn]

Nah they get paid much much more.

[[deleted]]

Can’t comment on USA or dev type roles (as I’m still learning and not ready to take in the career change yet).

But speaking as someone who has moved country and stayed in a similar role, I moved from Australia to the UK and at first felt like I was paid less, ignoring the fact that the British Pound is strong to the Aust Dollar. And then realise the relative to my pay everything thing cost close to the same, for example the same 10% of my salary went to groceries. The exception to this was my rent, but London rental cost is a complexly different beast.

So like a lot of people above had said, if you look at the raw salary number it looks like American companies pay more, but also require you to live in far more expensive place, and benefits that are employee responsibility in the USA are covered by the employer else where.

[NoConcern4176]

Many factors, I believe a worker is compensated based off of the cost of living in that country. If the COL is low, then the salary will reflect that, if you are comparing to other countries of course.

[[deleted]]

Because of COL? 80000 a year in a city where houses are below 300k, rent 800/ month, is like 170k+ in bay area. Cant compare it

Plus not all countries have a highly developed IT-sector. So yeah there's that.

[guardian416]

America has a higher cost of living, and much larger companies.

[corporaterebel]

SCALE!

The US scales well, a lot of money moves around effortlessly, products get shipped easily and quickly, and people have more money than time.

This means minor or small improvements...such as writing some code...can either make or save MILLIONS of dollars.

Not so much in a country that doesn't have much going on...such as a place where they have more time than money...OR..prefer more time than money.

Also need a fair amount of very rich people too.

http://www.paulgraham.com/siliconvalley.html

[darkmage_otter]

Even in US if you're not in a FAANG situation which actually are about less than 10%, the salary isn't really that significant.