[IP] more on Tech: A 'hostile environment' for US natives????
Begin forwarded message:
From: Tom Goltz <tgoltz@xxxxxxxxxxxxxxxxx>
Date: May 7, 2005 1:33:42 PM EDT
To: dave@xxxxxxxxxx
Cc: Benjamin Black <ben@xxxxxxxxxx>
Subject: Re: [IP] more on Tech: A 'hostile environment' for US
natives????
At 06:03 PM 5/6/2005, Benjamin Black wrote:
I think this hits the nail on the head: developers in the US have
unrealistic expectations of how they are to be compensated that are
based on the view that developers are scarce. Outsourcing gives the
lie to the scarcity myth.
There are always developers far above average who will continue to
command premium compensation, but the preponderance of folks will have
to come to grips with the fact that they must compete not just on
ability, but on price.
Ignoring the question of supply for the moment, being a developer is
a business, and like any other business, must have a higher income
than expenses. For the purposes of my example here, I'm going to use
San Jose, since it has more jobs for developers than anywhere else in
the United States.
Federal, State and local taxes account for approximately 30% of the
average household income. Note that this is a national average, and
fails to account for the fact that the taxes in California are
significantly above average.
According to the San Jose Department of Housing (http://
www.sjhousing.org/data/costs.html), the average monthly rent in 2004
was $1,236. The median home price for Santa Clara County was $649,000.
According to Bank of America's online mortgage calculator, and
assuming a 10% down payment of $65,000 and a 6.5% interest rate on a
30-year fixed rate loan, you will need an annual household income of
$150,000 in order to be able to afford to purchase that median
house. This is an optimistic number based on no other debt payments
(no school loan, auto loan or credit card payments), and gives a
monthly housing payment of approximately $5,000.
According to the U.S. Department of Labor Bureau of Labor Statistics
(http://www.bls.gov/oes/current/oes_ca.htm#b15-0000), in November of
2003, the average annual pay for computer programmers in California
ranged from $74,040 to $89,000. Assuming a household that has two
people earning this level of money, they can barely afford to
purchase the median house. Assuming that one of the wage earners has
family care responsibilities that significantly reduce their outside
earnings or significant school loan debt, they probably cannot afford
the median house. (The average undergraduate student loan debt as of
2002 was $18,900, $31,700 for graduate school, giving your household
a school loan debt of up to $64,700)
Now, based on the idea that developers must compete on price on an
international basis, where do you propose that a developer living in
Santa Clara County should cut their expenses so they can afford to
deliver their services at a significantly lower price?
-------------------------------------
You are subscribed as roessler@xxxxxxxxxxxxxxxxxx
To manage your subscription, go to
http://v2.listbox.com/member/?listname=ip
Archives at: http://www.interesting-people.org/archives/interesting-people/