We’re all used to rolling our eyes when we see headlines about the obscene wealth in Silicon Valley: Jeff Bezos making $6.2 billion in 5 minutes, Sean Parker’s $9 million wedding in a redwood forest, tech CEOs building expensive underground bunkers in case of doomsday.
And the inequality is getting worse, in and out of the tech sector. While CEOs at the 350 biggest U.S. companies earned an average pay of $18.9 million in 2017—a steep 17% increase from the previous year—wages for the average U.S. worker grew just 0.2% during that period, according to a new study by the Economic Policy Institute.
Average tech sector wages ($112,890) are more than double the average national wage ($54,520), but they also remain relatively stagnant. Wages increased by just 2.1%, which adjusted for inflation, is essentially flat, according to a CompTIA report. It’s been a source of frustration for many in the industry, considering that demand is so high. In May 2018, employers posted 314,000 tech job openings and only filled 8,700 of them, and the Bureau of Labor Statistics projects employment of software developers to grow 24% through 2026, faster than the average for all occupations.
In recent years, there have been a number of factors to explain this sluggishness: managed service providers driving down rates through volume-based negotiation for talent, and there’s been an increased use of foreign workers on H1B visas at lower salaries. But this should change soon, says Harley Lippman, CEO of staffing firm Genesis10, pointing to the intense competition for highly skilled workers and the Trump administration’s crackdown on H1B visas.
“That will put more demand on companies to increase wages,” Lippman says. “I was talking to a Fortune 500 client the other day and the CIO told me for the first time that they’re talking about raising salaries.”
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