Good News, Bad News, and the Really Bad News

The bad news is relative to gross output, software developers in the USA are being overpaid. Relative to gross output, software developers make two to three times the annual income as wood workers or metal fabricators. The good news it is supply and demand that dictates salaries. Luckily, the demand for software products is still outpacing the available supply of workers. Since there is a large growth in the software development industry, it is pretty easy to find another job at a pretty nice salary.

The really bad news is that this growth in the USA and Western Europe will not last forever. The growth in employment and the increase of salaries of software developers is starting to slow down in the USA. In 1999 the average salary for those in software development was $66,400 and by 2006 it had reached 69,200. This represents an increase of less than one percent increase per year.

The really bad news is companies understand software developers are being overpaid. This is one of the motivations to look for cheaper labor in places like India, China, and Eastern Europe.