How Much is That Software Developer?

Economic Pulse
March 30, 2015
Download PDF


Once a year, the Bureau of Labor Statistics releases data on 22 major occupational groups, highlighting employment by job classification and industry in addition to data on wages. Whereas the monthly payroll report details employment by establishment type, the annual Occupational Employment Statistics release describes employment and income by occupation. From the data, we can determine trends in wages (which include commissions, production bonuses as well as other forms of incentive pay) on both a national and regional basis, since the data are also parsed by Metropolitan Statistical Area.

Below, we highlight a few of the take-aways from the 2014 data release.

I. How have total wages changed between 2013 and 2014 by occupation?

Table 1: Wages by Occupation, National

Wages by Occupation, National

As shown in Table 1, most occupations experienced an increase in average annual wages. Across all occupations (including those not shown), the average increase in wages was 1.7%—in line with the increase in the Consumer Price Index and Personal Consumption Expenditure Index over the May 2013 to May 2014 period (2.1% and 1.7%, respectively)—consistent with the notion that cash wages have failed to outpace inflation.

II. How have wages changed between 2013 and 2014 regionally?

Regional wages are a function of occupation composition. For example, 70% of all petroleum engineers—who earned an average of $147,520 in 2014 compared to an average of $47,230 for all workers across all jobs—were employed in just three states: Texas, Oklahoma and California. States (and regions) with a greater share of higher-wage jobs will have higher average wages in aggregate. But what about the same job across different areas?

As shown in Table 2, the ten regions with the highest number of computer programmers in 2014 (as an example) offered average salaries of $91,368; for the U.S. as a whole, this figure was $82,690.

Table 2: Wage Data for Computer Programmers, by Metropolitan Statistical Areas, May 2014 (areas with the greatest number of computer programmers)

Wage Data for Computer Programmers, by Metropolitan Statistical Areas, May 2014 (areas with the greatest number of computer programmers)

The areas shown above, while having the most computer programmers on an absolute basis, were not necessarily those locations where wages were the highest or where the concentration of computer programmers was the greatest.

We can show similar data for a wide variety of occupations; the map below plots the relative number and median wage for a “software applications developer” for major metro regions, and shows a wide range of median wages: $62,150 for the Miami Metropolitan Division to almost twice as much ($115,850) in the Seattle Metropolitan Division. Not surprisingly, the industry that employed the highest percentage of software applications developers was software publishing (where 22% of all employees were developers), but this wasn’t the highest-paying industry. The software publishing industry paid applications developers an average of $109,030, but other industries paid more for employees with the exact same job: wireless telecommunications carriers (who paid an average of $120,630) and securities and commodity contracts intermediation and brokerage firms (who paid an average of $120,220).

An additional source of information can be gleaned by comparing the median wages for software applications developers with median wages for all jobs within the area as a whole. As shown in Table 3 below, the difference in the two figures provides a measure of the relative local wage premium, in this case, for software developer jobs. For example, median wages across all occupations and industries is roughly the same in Miami as Tampa ($31,080 versus $32,660, respectively); however, median wages for software application developers are twice as great in Miami and 2.8 times as great as in Tampa—suggesting a relatively higher premium for the occupation in Tampa than in Miami.

While the data are published with a lag, they can provide a helpful assessment of average and median pay by industry, occupation and area—all important variables for those employers evaluating multiple location options.

Map: Median Wage and Employment Data for Software Applications Developers, May 2014

Map: Median Wage and Employment Data for Software Applications Developers, May 2014

Table 3: Median Wages by Region: Software Applications Developers and All Jobs, May 2014

Median Wages by Region: Software Applications Developers and All Jobs, May 2014