June 20, 2015

...Learn TDD with Codemanship

If We're In Such High-Demand and Short Supply, Why Has Developer Pay Been Falling?

Thoughts turn again to the push by government, employers and other interested parties to get more people "coding", and on the mythical shortage of professional programmers that has driven much of it over the last few years.

Being a scientific sort of a cat, I'm always interested to see what evidence exists to support any position - whether it be the "let's get everybody coding" lobby's, or mine that (while I'm all in favour of everybody trying it) there is no such skills shortage that needs urgently addressing.

In a free and properly functioning market, we'd expect any resource that is in short supply to go up in value. When demand outstrips supply - especially by as much as the lobbyists claim - we get a "seller's market" where suppliers can name their price to a larger extent.

This should mean that we see the salaries and contract rates of professional software developers going up in real terms. Checking out the advertised salary trends on itjobswatch.co.uk we see a markedly different picture, though; developer earnings have been going down, and for many years.

For example, jobs advertised looking for a "Developer" had a rough average salary of about £38,000 per year 10 years ago. Today, it's hovering around the £42,000 mark, with the occasional blip as the latest new and shiny thing drives a temporary increase in the average before the market readjusts again - presumably after more people have had a chance to get the new and shiny thing on their CV.

Adjusting for inflation, the 2005 equivalent of £42,000 is about £30,000. That is to say, in real terms, average developer salaries have actually fallen by about 25%.

Add in the misery of house prices rises and the cost of travel rising way above the rate of inflation, and this paints a picture of today's developer being much worse off than she was in 2005.

If developer pay had kept pace with inflation, the average today would be £60,000 p.a. And that trend is repeated across regions, across programming languages and across most industries. C# developer pay has been falling. Java developer pay has been falling. London developer pay has been falling, Manchester developer pay has been falling. Pay for devs working in banks has been falling,. Pay for devs working in retail has been falling. The upper-quartile pay has been falling, The lower quartile pay has been falling.

And when we look at contractor pay, it's even more depressing. Many very experienced developers report charging the same rates today as they did as much as 20 years ago. My own experience, and that of my peers, has been that rates never recovered after the first dotcom bubble went pop in 2001, and they've been flatlining ever since - not even creeping up below the rate of inflation.

Now, how does this square with a seller's market?

In short: it doesn't.

Posted 5 years, 5 months ago on June 20, 2015