Monday, 16 June 2008

Comparing IT salaries across borders

An email was forwarded to me recently about a Trinidadian living abroad who was looking for a current salary survey for IT workers in Trinidad.
Having lived or worked in 2 countries outside of Trinidad for extensive periods (Barbados and the US), my first advice to this person was that a salary survey is not what one would need to make the decision of whether or not to work in a country.
Rather one should be looking for salary surveys as only one part in a "salaries vs standard of living" survey.

One may ask why does one need to know the standard of living if the salary is at least high enough to be comparable to what one currently earns in the country that one is presently resident, and at best some factorial higher than one's present salary. Here are several observations that may indicate why after they are duly considered.

1. A Trinidad based IT worker makes more than an Indian based IT worker, but not as much as a US/UK based IT worker if all typical annual salaries are equated to a USD dollar annual figure. For Trinidad I will exclude the Oil/Gas sector jobs as well as Government jobs, as I believe both of these are overinflated and eventually will collapse to normal market rates given sufficient time and pressure, especially from lower-priced global competitors.

2. As time goes by and competition through globalisation and offshoring/outsourcing initiatives heats up more from countries like China and India in IT industries, the salaries of those in that industry will tend to move more towards the India side of the scale rather than the US/UK side (unless Government intervenes to set local labour prices in some way, or Trinidad can offer something that proves a better incentive to India/China labour and negates the cost-per-person advantage Indian/China has).

3. An Indian IT worker, as an entry level graduate, makes a salary that is considered middle class income in that he can pay a mortgage, be married and support a family comfortably with that income. By contrast, Trinidad's entry level Computer Science graduates can barely afford to make monthly expenses at the salary one expects to get if not working inside the Oil or Gov't industries (if one rents and is not living with one's parents).

4. Given recent local inflation woes and the outlook that they will not subside anytime soon, Trinidad's cost of living is tending more towards the US side of the scale, even though Trinidad IT workers' salaries are expected to tend more towards the India side of the scale over time. This paradoxical movement would thus put an IT worker in Trinidad into a "lower middle class" level of living, vs a US worker who typically enjoys a "standard middle class" level of living, or an Indian IT worker who enjoys an "mid-to-upper middle class" level of living.

It doesn't really look like that much of a bold new world if one wants to work in Trinidad's IT sector and hope to live comfortably in the long run. This is, I believe, unless one is looking to start a business inside the IT industry that targets taking advantage of the wave of globalisation efforts currently happening worldwide.
Given sufficient incentives (from Government or outside venture capital investors to promote such initiatives) I'd say that this is one outlet I believe possesses the best option for local IT workers to make decent and sustainable incomes in the future and which can help in transitioning Trinidad from an "oil-driven" economy to a "services-driven" economy.