Software developer salaries have fallen in Australia since the start of the financial crisis and are expected to remain at the same level until the middle of the decade.
Software developers’ pay falls, according to the latest ABS data, and remain below that of other occupations, even after adjusting for inflation.
In the past 12 months, pay has fallen by around 20 per cent, or $2,500, for software developers and about $3,000 for computer systems and software developers.
But it’s not just software developers who are being paid less than before the financial crash.
Data from the Australian Bureau of Statistics shows the median Australian employee’s pay has been falling by almost $15,000 since the middle 2016, and it’s been falling even faster for software engineers.
As the ABS points out, the wage gap between software developers’ wages and that of their counterparts at other occupations is widening.
According to data from the Bureau of Australian Industry and Commerce, the median hourly wage of software developers in September 2016 was $21.32.
That figure rose to $23.31 in September 2017, then dropped to $22.20 in September 2018.
By contrast, for those working in other occupations the median pay has grown from $18.60 in September to $21 in September 2019.
The gap between the two levels of pay, $21 to $27, has remained the same, according the ABS.
So what’s happening?
As a result of the crash, software developers are seeing their wages fall.
And while that’s probably good news, it’s also a problem for companies like companies like Facebook, where a software engineer makes less than a computer science or computer engineering graduate.
“Software development salaries are now much lower than what they were five years ago,” says Craig McCracken, chief executive of the Australian Software Developers Association.
It’s a problem he says will be exacerbated by the retirement of more software engineers than ever before.
At Facebook, software engineers make $72,000 in Australia, down from $107,000 five years before the crash.
And the wage difference between them and other workers is much larger than the gap between them, says McCrackens, who is also a software developer himself.
When Facebook first announced its plan to reduce the number of software engineers it had on its payroll, it was able to pay those employees a median salary of $60,000, which McCrackenhans describes as “well below the minimum wage”.
“We’ve had some software engineers leave the company,” he says.
“We’re talking about thousands of them.
A lot of them are going to be out of work.
A lot of people are going through unemployment benefits.”
But McCrackern says the pay gap between those who work at Facebook and those who do not is getting wider.
Since 2016, his association has received more than $12 million in compensation claims, and the organisation is now paying out more than that.
Its chief executive, Michael Lee, says the organisation’s compensation costs are growing, and that they will likely rise further.
“[Software developers] are the frontline workers in our organisation,” Lee says.
Companies like Facebook are the most likely to receive compensation from the AUSDA, and pay them the maximum, says Lee.
McCracken says he doesn’t believe the pay disparity is linked to the financial downturn, but that it is a result.
There’s also evidence that pay inequality has become worse in Australia.
Between 2008 and 2017, the number the average pay gap increased for software engineering employees to $32,000.
However, the Aussies median pay dropped by $6,000 from that time, from $36,000 to $30,000 over that period, according TOI’s data.
If the gap is growing even more, it may be even worse for software and services companies, which have had to reduce their workforce and make concessions to their employees to make ends meet.
Many of these concessions were aimed at reducing the number or quality of software developed by the company.
Google, Facebook, Microsoft, and Amazon, which collectively have around 70 per cent of the software market, have all announced cuts to the number and quality of their software development teams.
Other companies, such as Amazon, Apple, and Facebook, have also begun to cut back on their software and software engineering workforce.
These concessions may be part of a larger trend, which has been driven by the rise of new technologies, such the cloud computing industry, which makes it possible for companies to keep their workforces small and agile.
McCracken says that in the past few years, he has seen a rise in companies seeking to make changes to their workforce to try and stay competitive in the market.
For example, he says a large software development company had to move away from its traditional role as a