Do You Make $60/hr for Programming?

azzkicker asks: "I was reading some AP articles on offshoring. It talks about the struggles of out-of-work programmers and the shifting of jobs overseas [in the US]. Part way through one article it says: 'The average programmer commands $60 an hour in the United States, six times the rate in India.' I don't disagree with the Indian rate (USD $80/day, $400/week, $20,800/year gross), but what is with the US rate (USD $480/day, $2400/week, $124,000/year gross)? I know that programmers are billed out at high rates, but most of my programmer friends in Midwest, USA (years of experience and CS degrees) don't even see $50K/year. What is the actual rate most programmers see? Do you see $60/hr? Is the US rate misleading corporations into outsourcing?" Does offshoring really save corporations that much money?

Billing rate

[duffbeer703]

Larger companies and government agencies pay IBM or Accenture or whomever $120+/hr for even basic IT staffers.

The programmers may be making $20-45/hr, depending on the city, but the customer still pays $$$.

The Indians bill low and pay their people low.

$60/hr salary or bill rate?

[Anonymous Coward]

I bet bill rate. If you can estimate an employee's pay at 2,000hrs * hourly = 120k of the author's estimate, you can deduct the first 25% for the cost of health insurance. There's $120k.

I know staffing agencies look to pay people 60% of their wage, estimate 20% for benefits and the meager 40% left to pay their sales staff, office staff, directors, and take a profit.

I would say that is the average bill rate of people that work for my staffing agency and have college degrees. I know of some that make 120k+ with and without degrees. But, they are usually project managers, not coders.

Loaded rates

[barries]

Don't forget that it costs a significant amount of money to seek, hire, train, and provide benefits (medical!) for people. Usually a $60 or $80/hr rate is a loaded rate that covers the full cost of an employee. In some cases this also pays for offsite space, utilities, equipement.

It can also reflect the quality of talent--a well run consultancy may also try to identify and retain people with higher levels talent so you'll get higher bang for your buck as opposed to a warm bodies in chairs type permatemp agency.

- Barrie

Re:Just my 2 cents.

[jmt9581]

While there are managers who definitely don't know how to objectively judge quality of software vs. quantity of software, there are counter-examples to your superprogramming friend. I'm sure that while many people on Slashdot know talented supergeeks with amazing technical skills, everyone knows at least one or two dweebs with no skill at all who just got into IT because it sounded like a good career decision in the late 90's.

In my opinion, the CS/IT world is going through a much-needed purging of some talentless dweebs from the workforce. Competition with overseas workers is simply part of that. I'm not saying that outsourcing programming jobs to India is always a good thing, just that it's not always a bad thing.

Overhead

[Mr. Darl McBride]

The average programmer salary is a bit less than that, but the overhead of keeping an employee is usually about 1.5x their salary.

Consider the amount of hardware, office space, insurance, matching social security, etc and you start to see the programmer's cost rise.

Well damn.

[/dev/trash]

When I had a full time job I made 28k a year. Now that I have some part time work, I get around 8 bucks an hour. So I call bullshit on this article.

Re:rule of thumb

[Ummagumma]

That 100% is not really true actually. The total an employee costs a company is their 'burdened rate' - generally the HR industry adds 30% of their salary to their base pay to determine this. It varies greatly by state, though, based on insurance rates, etc, and also by the benefits a company provies. More vacation = higher burdened rate, for instance.

so, $60/hr + 30% = ~$78/hr cost to the company.

no I don't

[slothman32]

Right now I don't have a job so no I don't get $60 an hour. When I did it was closer to $15. If I got a job it would be entry level and much less than $60. The few programmers, relatively, might get that much but that many out of jobs don't.