There is a huge pay gap in the tech world. Some blame it on gender or ethnicity or location, but it’s actually something else…
It’s actually a missing skill and a giant blind spot nobody wants to talk about. Lucky for you, I’ll talk about it.
This is a skill that almost every programmer lacks (regardless of age, gender, ethnicity, or location). And over the course of their career it costs most developers somewhere in the range of $2.1 million dollars (excluding interest).
That Is A Very Expensive Blind Spot
Programmers and technology people seem to hate the idea of selling things commercially. (Ironically, we all like getting paid large salaries to write code.)
If a business doesn’t sell things for lots of money, nobody will pay them to write code.
This disconnect is the beginning of a cascade of problems that ends up going from a tiny problem to a seven figure failure and most programmers I interact with are completely blind to it.
Don’t Be Evil?
First of all, making money is not evil. Selling is not evil. Without the ability to sell, you don’t have a business and people don’t have jobs.
Commerce, in general, is a good thing
Yet, programmers have huge hangups about commerce. Software engineers and designers will sabotage features and product designs to avoid guilt.
Avoid guilt? About what?
Guilt about money. Guilt about selling. Guilt about having money when someone else doesn’t.
The guilt translates into a fear of selling or manipulation in every form.
The Self-Immolation Of Business
I’ve seen developers trash high converting designs on the altar of “web standards”, their own personal feelings, or so called “best practices” made up by a random blog post on the internet.
I’ve seen high value features get pushed back and trampled down so that developers can work on their own pet projects.
Those things cost business the millions of dollars, and what’s worse is what programmers do to themselves which costs ridiculous amounts of money over their career…
The Sliding Scale Of Wages
Imagine for a moment that there is a sliding scale of wages. On one end a software developer can make $25,000 per year, and on the other end a software developer can make over $250,000 per year.
How do you get to the top end of the scale?
There is only one thing that truly makes the difference between the low end and the high end is a simple thought, a bizarre understanding that is easily overlooked by millions of people working in the software field.
What You Probably Think Makes The Biggest Difference
In Silicon Valley, the base pay starts near to $100,000 and can get over $250,000, especially when you get into management, have good benefits, and so on.
In the Midwest, the base pay starts near $35,000 and can get to $90,000 or possibly higher.
Elsewhere in the United States, there are similar ranges adjusting for demand and location.
You might think based on what I said location makes the biggest difference in what people get paid, and you’d be wrong.
You might think based on what you already believe that skill makes the biggest difference in what people get paid, and you’d be wrong.
You might think based on the news recently that gender, ethnicity, or sexual orientation makes the biggest difference in what people get paid, and you’d be wrong.
The One Thing That Actually Makes A Difference…
What determines your pay is what you believe you are worth and if you are willing to convince other people you are right.
And that is the key to the biggest mistake or the biggest missing skill programmers suffer from. They don’t know what they are worth and even if they do, they are afraid to ask.
If you and another guy both start a minimum wage job at McDonald’s and you get $7.50 an hour, you will assume your friend is making the same money.
Now, picture this…
What happens when you find out your friend is making $15.00 an hour while you are making half that?
If you’re smart, you’ll ask yourself why he’s making more. It’s not location, it’s not skill, it’s not gender or ethnicity, it’s because they asked/persuaded/convinced your boss to pay them more.
Now, Here’s A Key Point
Once you know he’s worth $15/hr, you start believing you are worth $15/hr and that gives you license to renegotiate your deal or go find a $15/hr deal of your own.
In case it isn’t obvious, let me be clear. Whether you are talking about minimum wage or maximum wage, it’s always a negotiation.
Most Developers Are Poor Negotiators
Someone offers X job for Y dollars and they take it.
If you live in the Midwest, surrounded by peers maxing out at say $50,000, the idea of asking for $100,000 is obscene. If you live in Silicon Valley, $100,000 might put you in the poor house (figuratively speaking).
A lot of people in both places sell themselves short to the tune of $50,000–$70,000 per year by the time they are 10–15 years into the field.
That means over the last 30 years of their working career, they can get paid as much as $2,100,000 less than they could if they knew how to negotiate better.
If you figure in compound interest, it’s an absurd number.
Why Give Up The Money?
That is to me the biggest mistake that programmers make. They don’t understand money or business enough on average to make very good deals for themselves. As a result, it costs them millions of dollars in lost earnings.
Given that most of us work to make money, losing out on giant sums of money due to financial and business ignorance seems crazy to me. Yet, it happens every day.
Perception Is The Real Pay Gap
It’s not based on age, gender, ethnicity, skills, talent, experience, or location.
It’s your perception of your own self-worth and ability to sell that to other people.
I call it The Perception Pay Gap.
I’ve worked for $5.25 an hour and I’ve worked for $250 an hour and I’ve even worked for free. The biggest impact on what I make is my own belief and ability to sell that belief.
That is to say, my own perception formed my “pay gap”.
But What About…?
At this point in the article, you might get the mistaken belief that I’m saying that skills don’t matter. You might also think I’m disregarding issues of gender, ethnicity, age, or location on income.
That is not what I’m saying. Those things can have an impact. But there is something that has a bigger impact…
Asking For More Money!
I’ve seen over and over again a $10,000 gap between developers on the same team because one person asked for more money.
I’ve had friends raise their consulting rates from $50/hr to $150/hr by asking for more money.
I know some people have figured out how to charge over $500/hr by asking for more money.
The people asking for the money have no hangups about it. That is why they can ask and that is why they get paid more.
And that is why I say it’s your perception of your own self-worth and ability to sell that to other people. If you don’t believe you are worth the money, you won’t ask for the money.
When you believe you should be making more money, you’ll ask for it and with enough persistence you’ll get it. That is how The Perception Pay Gap works.
The greater your perception of what is possible, the more you ask for and thus the more you get. It works on a small level, and it works on a very very big level.
Successful People Already Know This
Did you know that Hillary Clinton and Barack Obama get like $250,000 to deliver a speech they’ve already delivered 100 times?
Did you know that Jay-Z, Beyonce, Madonna, and Elton John routinely charge $250 for a concert ticket and over $1,500 for backstage passes?
Did you know that Elon Musk is negotiating for a potential $6.5 billion dollar compensation plan at Tesla?
They all make more money than most ever will.
Now as a counterpoint…
We All Start At The Bottom
Go watch this video of Beyonce singing in someone’s backyard as a kid.
Nobody was paying $250 a ticket to see that performance. There were no $1,500 backyard passes.
None of the people I just mentioned started out making that kind of money. Most of them are women, minorities, or immigrants.
Their circumstances weren’t ideal and they still won.
And that’s the whole deal. Regardless of circumstances, each figured out how to change their perceptions about their own self-worth and then ask for more money as a result.
Your circumstances aren’t the predictor of success. Your perception and self-belief is.
Are you the cause of your circumstances or the effect? It’s really up to you and your perception.
The Perception Pay Gap Challenge
Now, here is my challenge to the skeptics who think I’m full of baloney…
If you have a job… Go to your boss today and ask for a raise. If they say no, wait 3-6 months and ask again.
If you are looking for a job… Ask for $10,000 more than you are comfortable asking for in a negotiation.
If you are doing freelance… Raise your rates by $25/hr on your next job.
If you are running a business… Raise your prices by 10-100% for all new customers.
Go ahead and test my theory. Ask for more money. See what happens. I bet you end up making more money one way or another.