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If Tech Is So Important, Why Are IT Wages Flat? 660

Posted by Soulskill
from the all-about-the-benjamins dept.
dcblogs writes "Despite the fact that technology plays an increasingly important role in the economy, IT wages remain persistently flat. This may be tech's inconvenient truth. In 2000, the average hourly wage was $37.27 in computer and math occupations for workers with at least a bachelor's degree. In 2011, it was $39.24, adjusted for inflation, according to a new report by the Economic Policy Institute. That translates to an average wage increase of less than a half percent a year. In real terms, IT wages overall have gone up by $1.97 an hour in just over 10 years, according to the EPI. Data from professional staffing firm Yoh shows wages in decline. In its latest measure for week 12 of 2012, the hourly wages were $31.45 and in 2010, for the same week, at $31.78. The worker who earned $31.78 in 2010 would need to make $33.71 today to stay even with inflation. Wages vary by skill and this data is broad. The unemployment rate for tech has been in the 3-4% range, but EPI says full employment has been historically around 2%."
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If Tech Is So Important, Why Are IT Wages Flat?

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  • Rich Get Richer (Score:5, Informative)

    by Mr_Blank (172031) on Wednesday December 05, 2012 @06:11PM (#42197051) Journal

    IT is not being picked on, in particular.
        Only the rich are getting richer [businessinsider.com].

    Click that link to see
    1) Corporate profit margins just hit an all-time high.
    2) Wages as a percent of the economy are at an all-time low.

  • by Anonymous Coward on Wednesday December 05, 2012 @06:25PM (#42197253)

    You should probably consider the cost of buying a home or paying rent in your calculations.

    At the peak of the downturn I spent ~$800k on a condo on the peninsula (which has since gone up in value. woo.) In many other areas of the country this would buy you a mansion in the (proverbial) hills. I have family in the midwest with a ~4000 square foot home for ~$300-400k on a lake. And this isn't out in the country. Firmly in suburbia.

    Yes you can buy homes in parts of the bay area for less than that (and commute 50 miles in bumper to bumper traffic each way...), but I could also go buy a
    modest home in the midwest for $80-$100k instead of comparing it to a mansion.

  • Re:Capitalism (Score:4, Informative)

    by swillden (191260) <shawn-ds@willden.org> on Wednesday December 05, 2012 @09:13PM (#42199103) Homepage Journal

    Do you hav 401k? Aren't you therefore an investor?

    Nope. My 401(k) will be taxed as ordinary income when I go to withdraw from it. If I was an investor, it would be taxed as a capital gain.

    You're investing either way.

    And, if you prefer, you can choose to invest with after-tax dollars, and then when you take your money it's appreciation would be taxed as a capital gain. That's your choice.

  • by Gorobei (127755) on Wednesday December 05, 2012 @10:02PM (#42199479)

    Individual employees' pay should be going up steadily, but is it really shocking that the wages for the same job/experience should remain flat? Admittedly, there is probably some change in the underlying age/experience demographics, but it is probably not massive. Should someone hired today at entry level really expect more (inflation aside) than in 2000?

    Not shocking, just common sense...

    Replace: "Despite the fact that technology plays an increasingly important role in the economy, IT wages remain persistently flat.

    With: "Despite the fact that fast food plays an increasingly important role in the economy, fast food wages remain persistently flat.

    The world is automating low-level IT jobs just like it automated other low-skill manual labor. Ten years from now, 90% of IT jobs will be closer to minimum wage, and the other 10% will be more lucrative "professional" jobs.

  • by b4dc0d3r (1268512) on Wednesday December 05, 2012 @10:12PM (#42199561)

    Adding to that, they are missing the top wage earners, who have retired, and are now including the n00bs who are earning entry level (for their position) wages.

    If we went through a recession, and the several bubbles which have burst, and you only track individuals, there are some people who have lost jobs but average earnings are up. This is not a debate about how much people earn, which is where most people above gp were talking about.

    The topic at hand is this - if IT is important to the world, why are they not paying IT people more?

    The assumptions in the questions are beyond idiotic. As a whole, should everyone in IT be paid more just because we are important to the economy? Or are we just displacing people and earning their salaries?

    How many people worked in tech, multiplied by their salaries? And compare that to now?

    The still sluggish U.S. economy gets most of the blame for this wage stagnation, but factors such as outsourcing and automation also contribute to the problem, say analysts.

    "IT salaries have not really kept pace with inflation," said Victor Janulaitis, the CEO of Janco Associates, which reports on IT wage compensation.

    In 2000, the average hourly wage was $37.27 in computer and math occupations for workers with at least a bachelor's degree. In 2011, it was $39.24, adjusted for inflation, according to a new report by the Economic Policy Institute (EPI).

    Adjusted for inflation, we are $2 ahead. How does Victor's quote mean anything when placed directly next to a quote disputing it? Adjusted, we are ahead.

    Why Are IT Wages Flat? First paragraph - outsourcing, automation, and economy. WTF are the rest of you babbling on about?

    That translates to an average wage increase of less than 0.5% a year.

    Including all of the people who took retirement or quit for other industries, and all of the n00bs. The rest is explained in the article, leading to b4dc0d3r's law: NEVER read an article with a headline posed in the form of a question.

    The real story is the EPI report, second link. Microsoft wants more H1-B visas, which is not new in the least. Microsoft wants to pay people from lower wage countries less money to work in the US. If you spot the conclusion, good for you. Microsoft wants to keep wages flat.

    As a large tech employer, and someone who is lobbying for cheap labor, it's kinda obvious to me that dcblogs (submitter) is intentionally misusing statistics, and a poorly written CNET article, to prattle on about H1-B visas.

  • by germansausage (682057) on Thursday December 06, 2012 @12:45AM (#42200677)
    Years and years ago, when Michael Dell was maybe about 30, they asked him why he didn't sell Dell, retire, and have some fun. His answer was "What could possibly be more fun than running a billion dollar computer company?"

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