Indian techies are worst paid; is that so?

Source: Indian techies are worst paid; is that so?

October 22, 2007

Indian media is abuzz with the news that Indian techies are lowest paid. Unfortunately the media is too busy in printing the news first before analyzing it!

As per Mercer Survey of IT Managers’ average salary position is as follows

USA $ 107 K
UK $ 118 K
Canada $ 93 K
Denmark $ 123 K

The corresponding figures for “low cost” nations are

India $ 25 K
Philippines$ 22 K
Vietnam $ 15 K

Average salary for professionals (not managers) is as follows

USA $ 60 K
UK $ 64 K
Canada $ 57 K
Denmark $ 70 K

The corresponding figures for “low cost” nations are

India $ 10 K
Philippines$ 8 K
Vietnam $ 6 K

The media mixed up managers’ salary with professionals’ salary.

With most of India’s professionals in 20s, the salary levels are low; the costs are much lower too. That is precisely our competitive advantage; if we can combine it with higher quality, we can grow much more in global software outsourcing business.

It is true in every OTHER profession, not in IT alone!

$ 10 K for a person in 20’s is a lot of money in India and the fact that there are 2.5 million such people in India is to be celebrated.

Economists and policy planners use “purchase parity” that links income to costs and raw salaries are never to be compared. An entry-level secretary in USA will earn about $ 10K; does any secretary in India get such a salary?

Such comparison of “apples & oranges” can lead to distortion and undue criticism (often without thinking) particularly from communists!