AI isn't replacing jobs. AI spending is
fastcompany.com669 points by felineflock a day ago
669 points by felineflock a day ago
As a recently laid of senior engineer, to the extent that my job was replaced, it was replaced with offshore junior devs who'd already been working with the company for over year with a pretty rough level of productivity by man-hour, though maybe taking 3x the time to get things done is worth it if they're cheap enough. Which is to say I see my layoff as as cost cutting backed by a premise that there is no value in retaining senior level talent, to try and keep operating in the black, not because AI was materially producing a lot of benefits. (Because to the extent it was, I was the one reaping them compared to the offshore folks and less experienced onshore ones.)
In my experience, if you're working on a green-field project, you're working long hours, making very little visible progress, you have to write a lot of code, make important decisions.
All the while management is breathing down your neck and asking 'why isn't it ready yet'.
Once the thing is shipped, then all the important people come out of the woodwork, who were surely there all along, 'supporting' you from behind the scenes, there are photo ops and important people shaking hands. If they feel particularly charitable, then you might get a seat at the table. There's talk of spinning up a team around the product, and people fall over each other to get to lead it.
But the thing is, most likely they don't need your expertise any more, not really, once everything works, you don't really have a negotiating position as a dev. They get some cheap juniors to fix the bugs and add the missing feature niggles - hiring 3 juniors might not even be cheaper, the point is management does not have to depend on you, they can play their human resource games.
'But only I can fix that complex race condition, that popped up half a year after development' - well if it was good enough with the bug for people not to notice it for half a year, it's going to be good enough for another half, until the new devs can fix it.
This applies to ambitious feature requests as well - if the code's good enough that the contract was signed, the business requirement was met, they can just kick the can down the road until they can fix it.
I am finding this to be the new "meta" for the software development lifecycle. Given this new reality, it's getting harder and harder to actually invest in ambitious, green-field projects. In this new meta, individual contributors and leadership don't trust each other, leading to a vicious feedback loop of making it harder and harder to jumpstart ambitious projects.
It's hard to commit to a green-field project that is predicated on a level of risk that leaders are hesitant to take on as they would also take on the "counterparty risk" of the expert individual contributors holding them over the barrel to finish the project. The expert individual contributors are likewise hesitant to devote themselves to the task knowing that once leadership considers the "hard bits" to be done, leadership's aversion to risk will try to swap out the expert-individual-contributor roles with much more replaceable roles and ultimately replace the expert individual contributors.
P.S. The parallels between this cycle of mistrust and the modern dating crisis (in the US) does not elude me.
> In my experience, if you're working on a green-field project, you're working long hours, making very little visible progress, you have to write a lot of code, make important decisions.
Funny, this is the complete opposite of my experience. Greenfield projects I've been a part of have had a ton of highly visible progress with _frequent_ updates to stakeholders basically from day 1. Same goes for complex additional features.
I was going to say the same. In my experience I can say without hesitation green field projects is how you advance your career, become visible and get promoted.
I've seen both kinds. GF projects where the senior devs feel that they have to get something right from the beginning, spending a year just on that piece (a set of widgets, a data ingestion framework, a state machine that covers the entire underlying algorithm). And other GF projects which have frequent updates and are open to development with very few speed bumps.
Of course you can call out the former examples as incompetent or hubris, and they will probably occur less and less, but nevertheless they exist.
> 'But only I can fix that complex race condition, that popped up half a year after development' - well if it was good enough with the bug for people not to notice it for half a year, it's going to be good enough for another half, until the new devs can fix it.
From my time at AWS, and in light of the recent DynamoDB dns race condition bug, this is a line of thinking that is problematic.
There is so much complexity in the inner workings of any one of those services. Many of those services are now composed of many teams, each having turned over completely multiples of times.
Yes there are runbooks and knowledge passed down from each generation, to some extent. But when you hit some critical outage, edge case, etc., those people running the systems have such a different relationship to the system having simply maintained it vs. built it.
From a certain perspective, that line of thinking is only "problematic" if customers stop paying. In other words, the product only has to maintain a certain minimum quality threshold and doing any more is a waste of money. I don't necessarily agree with that myself but it is a common attitude.
For sure, as long as the product keeps selling and it stays up, great, the business is still viable.
I think its more analogous to a car with some problems that may be going unchecked; it still drives and gets you from A->B, until it doesn’t.
>>But when you hit some critical outage, edge case, etc., those people running the systems have such a different relationship to the system having simply maintained it vs. built it.
Long stays in most companies are practically non-existent these days, apart from a few folks who are present for long, unfortunately these people are often called lifers, coasters etc.
Simply put, no one person can say they contributed most to the building of a system. Barring very few rare projects.
So you already need the runbook, documentation model to run things, for the reason people themselves work along those lines.
You have an amazing amount of confidence that the new devs are going to fix subtle race conditions…
They’ll add a few sleep(5) calls to make them go away though..
> You have an amazing amount of confidence that the new devs are going to fix subtle race conditions…
> They’ll add a few sleep(5) calls to make them go away though..
I don't think torginus's point is that the new devs will find the proper fixes for the code, more that such a hack might be good enough in the eyes of both the company's management and the company's users.
As much as it pains me to recognize this (as a fan of clean, elegant code) not every bit of software needs to be clean and elegant to achieve its intended purpose (which is, at least in the corporate software world being discussed here, to make money).
If you meet the needs of your software's users, you can make a lot of money for a lot of years selling a piece of crap held together with chewing gum and elastic bands (and many companies have).
Such "sleep(5)" is actually a milestone in a project, a milestone that marks the beginning of deterioration and the end of architectural changes. I've seen multiple pull requests with "sleep" and similar shortcuts, and worse, I've rewound coding agent context and changes because of such model suggestions. I'm responsible for informing management about the consequences of such shortcuts and why we have to take the correct, often more time-consuming and more expensive, approach to avoid project derailment in the long term. I believe that management picks employees. If they don't trust my judgment, then it's okay for me, but I don't feel obliged to be responsible for the consequences.
For a lot of startups the "sleep(5)" code isn't a milestone, it's in their MVP code with maybe a TODO comment to fix later.
I'm certainly not defending such code, just saying that its out there and in some very successful projects.
If the managers where you work understand the dangers of taking on such tech debt and are willing to put in the resources to avoid it, consider yourself lucky, because in my experience that's not at all universal, or even particularly common, though it does certainly exist at some places.
What dev to do then?
IMHO, there's never been a better time to build your own product and learn to sell it. The effort that AI implementation requires is clearly exponential to complexity of the organization.
You can build faster now that you ever have: I am building faster than I have in 25 years of engineering. You have more capable support for all the unfamiliar processes of building a business imaginable.
And almost everyone larger than you is finding it harder to achieve similar productivity gains from implementing AI, if not outright struggling with it. This is a golden moment and won't last long.
It was never an issue to build something. The challenge is to sell your product to cover dev costs at least.
That too, is easier than ever.
It's just work, there's no secrets to it.
I already get multiple cold emails a month selling me some sort of software product or service that I don't need and that wouldn't work for me.
If a bunch of additional people start going and building MVPs, what keeps that from becoming even more of a flood, like what you get if you post a job application on LinkedIn nowdays?
I think sales is likely to get harder, not easier, soon.
And to your earlier post, I think the big question is: can individuals get more done on their own now building new things because of less organizational issues compared to incumbents, or because of less product complexity and scope? Is the organization the problem, or is the complexity of stuff built to try to service a thousand different previous sales deals and customers?
Nope - this is one of the blind spots people have.
Right now GeAI is making it easier for many people to get started on projects they have.
It’s improving starts of new projects.
GenAI is not creating demand for new projects. Or new novels, new movies, new stories.
People are ending up creating, essentially, for themselves.
I can't agree with this more, and it's exactly both the position and the impetus of my personal action plan for the next several years to come.
Truly, AI levels the playing field, if you just have the inclination to look at it that way. It brings such potential to the right people. In my hands, a software developer who has been slinging code for food for 40+ years, I am a 'god' with a cheap monthly subscription to Claude Code. I can run several projects and keep track of every one of them and see progress like I've never had that chance to, in my entire lifetime. And yes, I still wield the stick, because I KNOW how to do this stuff. Claude really doesn't. Claude just gives me raw material, individual orchestral parts as it were, that I can put together with a conductor's baton.
My enterprise client? They get barebones slop. Enough to keep things alive but yet never be scalable and extendable. And they deserve that. They slaughtered our entire US based team and went overseas. They retain me to keep the wheels on while offshore wires up worthless, unpredictable AI agents to 'enhance' the product. I'm taking their money until I can break free sometime next year. They get the scraps now, and they will never know until karma brings them their bitter fruit.
My personal project. A really, really fun and fluid development momentum. Truly art and logic combined with Claude doing the grunt work for me. Absolutely a blast and it will have a user base, and the user base will really enjoy the results.
New partnerships. You can now make ANYONE you know, that much more viable, that much more tech savvy. As an individual, with your talents and our new little 'digital helpers', you, yourself can become the David to any Goliath you wish. You can help elevate ideas, small teams, and aspiring entrepreneurs and have a blast doing so.
Shed the notion that this moment has to be dark for you. It doesn't. It just takes seeing that maybe, just maybe, the boneheads that are trying to capitalize in these horrendous actions which include lying about AI, lying about the reasons they are laying off, etc. are bringing about their very demise in real time. Clueless as to what they are doing.
And those of us with the knowledge, ethics, high standards, discipline, and honor, are now armed with the very thing that can bring down those who created it to harm us.
It IS a golden moment!
Similar trend at my company - we're looking to hire in India to reduce costs. The rumor is that we could replace 25% of our existing IT workforce without outsourced roles.
If anyone is worried about their job, it won't be AI that takes it - it will be outsourcing. The US offshores 300k jobs per year with a high percentage of them being IT (60-80% depending on source). It's really not that different to the offshoring of manufacturing decades ago. Why pay people onshore when you can pay someone in India half of that? Any job that doesn't require a physical presence or has legal pressures to keep it onshore will be at risk. It will likely get worse over time, just like manufacturing. I don't know what the future will look like if we continue outsourcing everything. It used to be that we outsource primary and secondary sector activies so that we could expand tertiary industries. What are we replacing the outsourced jobs with now?
Offshoring/outsourcing is nice on paper, but as management doesn’t have to deal with time zones, in reality it is much more chaos than expected. And how do they want to deal with fuckups? Thru Slack or Discord? :)
We had British SaaS supplier and all the time I have talked with Bangalore-based people. They had to work in night I suppose…
Also, Indian culture has a huge ‘overpromise, then try to cover it up’ issue at all levels. Outsourcers have really mastered it though.
Source: lived in India for a year.
Hard truths about outsourcing: you’re always dealing with a cultural, political, and legal gap.
Stuff that’s hella-illegal, that not even the remotest WFH citizen would ever try to pull, might look very tasty from another perspective. Economics that favour that cheap labour also means even marginal scams can seem wildly tempting on the other side.
A lot of tech has this culture in general: "fake it till you make it". I see this a lot in the startup culture as well.
I don’t see that as Indian culture as much as outsourcing. I’ve had tons of that from entirely domestic contractors, including people who’d bid on a project only to admit their team didn’t have the domain experience promised. I’m talking about things as basic as telling the client that they needed to buy an enormous SQL Server cluster because their “developers” didn’t know how to limit joins and were had deeply-nested loops processing duplicate results.
They do this because it often works: business people often lack the experience to tell whether excuses are correct, and large organizations have enough project churn that it’s entirely possible to wing it for the duration of a contract / pivot, get paid, and move on before someone knowledgeable notices that the old deliverables didn’t really work.
What they had in common was greed, and I think that’s where the association with India comes from, too, but as a selection bias affecting people who don’t otherwise have exposure to Indian workers: there’s a floor on what a productive developer is going to get paid – someone smart enough to do the job is also smart enough to realize when they’re being underpaid and all of the abuses I’ve seen were cases where some combination of the outsourcing outfit and senior management were basically saying “why cut our cost by just 30% when we can find someone who’ll show up to work for ¼ of our staff rate?” and then acting surprised when they can’t retain decent people (e.g. I once talked to a guy who had two clues to rub together as he was leaving and learned he was getting ⅓ of the hourly rate and bailed as quickly as possible to get closer to market rate). Less ethical American companies do that, too, but they still lose to the even cheaper body shops so they aren’t as successful, but in all cases I would say it’s not the entire nation’s culture but the subset of fake-it-til-you-make-it business types. Plenty of people in both countries detest that and don’t deserve to be lumped in with them.
Have you ever lived in India? (not just visited, but actually lived there)
I have, and while of course not 100% of any society is ever any specific way, Indian society is this way.
In the same way as german society is very ‘rules oriented’ (to put it mildly), even when individual germans can (and sometimes are!) the opposite.
Don’t mess with the Polizei and expect to come out unscathed, and don’t expect to get what you paid for (or what you’re asked to pay being a fair price) without fighting for it in India. Or for people to follow the rules if they can profit from not following the rules, even if it’s short term.
It’s just the way things work.
Occasionally, there are exceptions, but they typically prove the rule. (Ikea in India is awesome, for instance. And some individual local vendors are too. Autorickshaw drivers, cabbies, landlords, and vendors in busy markets tend to be the worst. Like 5x a fair price sometimes, or a fair price and 1/5 of what you should get. And in some situations, the Polizei are very kind. Like if you’re lost and a pleasant drunk. But do not argue with the Polizei, it will go very badly.).
Like in any society, these have reasons which are extremely obvious to most people in the society, and may not be obvious until you live there.
In India, for example, when everyone is trying to penny pinch/get rich quick because of a history of extractive behavior from authorities and economic/social instability to an extreme degree (including historically, famines, religious wars, purges, etc.) and so many factions/groups that ‘us vs them’ is just the norm - and once enough people start doing it, you’ll be screwed if you don’t do it yourself. It’s the prisoners dilemma writ large, but when there are already a ton of people floating around doing the ‘wrong’ thing. The rich can get away with not doing this (as much) sometimes, when they are dealing with foreigners, but it’s pervasive.
Or in Germany, when there is a history/culture of strong willed people doing what they want and making life harder for everyone else (in an environment where that can get people killed) but a reasonably consistent and obvious majority ‘us’ group, for instance. In weather that WILL kill the unprepared/weak without assistance a large portion of the year, and requires significant energy to be spent just to not freeze to death for everyone.
I’ve had two experiences with off-shoring. The first time my former CTO brought in a near shore firm and they worked independently on a large project. There was no knowledge transfer or collaboration with the on shore devs. They built what was asked, it was over engineered and much was built of little value. We still have the software they wrote but it is a liability. The second time, I’m now in the CTO position, instead of having the nearshore people silo’d we work integrated. Everyone is on the same team, code reviews, pull requests, all mutually understood. It’s so much better. It all starts from the top and if you don’t have vision you’re doomed to fail.
Usually 5 - 10 years later the industry will cry because of lacking competence and being left behind by new companies from nations that can produce cheaper and themselves.
It turns out there is little value in management alone. It will be cut loose like the rest. Perhaps these companies can become patent trolls.
Also they have a very hard time to find new talent since word gets around. Sometimes it works for industries like textile, but not always, and it doesn't work for engineering.
It mostly works for low budget or high volume products. It is still a bad long term strategy. Still, outsourcing didn't just start yesterday.
I do wonder at times if tariffs and offshoring protection are necessary at a certain point. Forcing a labor constraint on an economy (within reason) can spur efficiency. Accepting high structural unemployment in the name of the free market seems irrational.
I think we've taken free market to an extreme in a race to the bottom. Tariffs are probably a good thing, but maybe not in the way they have been currently implemented. Almost 15% of the country is on SNAP and we're spending hundreds of billions per month on debt interest. I'm not sure how we come back from this.
The issue is that retraining people is hard.
Frankly the race to the bottom does result in net good for humanity as a whole - but the transition period is not kind to the people who are losing their jobs.
My company has been intentionally causing attrition in the US by moving to effectively a 996 style schedule. As people quit, their positions are moved to the India office. It is not an officially communicated policy. I have just surmised this based on private conversations with the executives and what is actually happening.
Actual Indians, as always. Humans are cheaper, and have the capacity for long term memory formation.
The long term part is overstated in my experience. People move around a lot at these offshoring firms as better opportunities arise. In my experience by the time you find someone competent they’re already interviewing for a better role. Constant churn trying to find the next one.
The way the outsourced companies are structured, the folks who actually know things spend all their time selling new customers/placating existing customers. The moment someone shows promise/that they are actually skilled, they get moved out of the actual dev teams.
It’s genius, in a way.
This is the same on a lot of larger staffing agencies that promise to have all the people you need and can either do entire projects for you, or get you developers, designers, QA, project managers etc on short notice.
They have a few very competent developers who are primarily in the secondary sales in my experience. First sales contact is between non-technical management and their front-line sales (usually very attractive women). In the second sales contact, technical staff from the potential client is involved and they bring along their real developers. But those are not the ones you'll get on the project. They'll give you interviews with the developers you can get, and they're coached for the interviews and sound fine. But then in reality they are people who can't touch type and develop purely by trial and error without forming a mental model.
If hiring locally wasn't such a mess, nobody would talk to them. At some point even a junior developer is better than not having a developer at all. I assume AI will change that and they'll get replaced first.
I would say it is more sinister than just a cost-benefit analysis and plain racism in hiring. Cheap talent exists in far more places than India but somehow it almost always is India. Not only that but I have seen the strangest LinkedIn profiles where people graduate from no-name Indian universities and get a big-corp job here in the West like it is nothing.
Even Japan has become pro-Indian on immigration for tech: https://eastasiaforum.org/2025/11/06/takaichis-japan-looks-t... Wtf...
It's not a racism thing, it's because India is in a fairly unique position: their population is so large, that (relatively speaking) the top 0.1% of Indians in any sector tend to outnumber the top 0.1% of (for example) Americans in that sector, plus if an Indian immigrates to America, a company can pay them less than an equivalent American employee (for various reasons).
So you basically can pay an Indian immigrant a junior dev salary, for significantly-better-than-junior-dev work. It's just stonks.
>”for significantly-better-than-junior-dev work.”
Not even close. We had two offshore contractors working with our team for about two years and they were consistently terrible. Despite this, some higher up pressed us to “hire” them so we conducted an interview. One of them said they had 8+ years of SQL query optimization experience and could not explain what a table scan was. The other claimed to have 5 years of C++ experience and thought a pointer was a url. I am not exaggerating.
Whereas our team’s college intern turned junior dev has consistently delivered increasingly valuable contributions and doesn’t lie to us.
At least you got to interview them.
One of the first startups I worked at in the early aughts, I started as a front-end dev. Indian dude a few cubes over. I'm not kidding, he had a "Learn .Net Nuke" Wrox book he was constantly pouring over.
He was gone on my second day. Apparently the company had hired an outside recruiter who interviewed someone and when they got the job, this dude showed up. Apparently this was a really common scam back then.
I see not much has changed.
On the other hand, I've had extremely skilled senior Indian colleagues who were essentially paid like juniors.
As far as I understand, there's extreme variance between highest-tier and lowest-tier universities and it's not necessarily reflected in salaries when they're hired by Western companies.
YMMV
Tons of anecdotes like this: https://www.reddit.com/r/recruitinghell/comments/1eblg0d/rea...
Yes it is also racism, and tribalism - between Indian castes.
https://www.vice.com/en/article/silicon-valley-has-a-caste-d...
https://wol.iza.org/news/tech-giant-accused-of-hiring-bias-i...
etc..
The Indian diaspora is huge and you have second and third generation folks in executive office all over. As a political force, south Asians are increasingly powerful as well in many states.
There’s a lot of opportunities for personal networks, nepotism and plain old corruption to work. (Who is going to figure out that somebody dropped a few gold coins to your sibling as a kickback?) There’s a much smaller network of people with relationships to Eastern European or other companies.
> There’s a much smaller network of people with relationships to Eastern European or other companies.
Unlike eastern Europe, India is geopolitically in a pretty good spot right now, having decent relations with most developed countries, and not engaged in any major wars with its neighbors. The last company I worked for outsourced a lot of work to Russia. At a certain time in 2022 they suddenly had to shift a lot of that work to... India!
Absolutely. They are in the middle both physically and logically. Notice Trump’s big crackdown barely made a dent - mess with India, and Jamie Dimon and his peers are on the phone immediately… finance depends on the outsourcers onshore and offshore to function.
India’s long term positioning of neutrality and strategy with business, education and politics is bearing fruit.
No conspiracy theories are necessary here. The numbers speak for themselves.
Here is an article putting together data from GitHub about SW developers per country.
https://data-player.com/highest-number-of-software-developer...
When talking about outsourcing jobs from the U.S., you’re obviously gonna exclude the U.S. China is also not a factor. Neither are Western European countries or countries like Japan and S Korea because of relatively high salaries. Russia is out due to long standing geopolitical issues.
That basically leaves Brazil and Indonesia as the only alternatives to India in the top 10 and combined they don’t even have half the number of SW developers as India.
You need to then add Mexico, Vietnam, Turkey, Philippines and Poland to the above 3 to add up to the number of SW developers present in India.
Thats why the outsourcing industry is concentrated in India. You can setup 1 office in India and have access to as many SW developers (Indians are also very willing to migrate domestically, so an office in a single city is sufficient to cater to the entire domestic developer market) as you would if you setup 8 offices in & different countries across 4 continents.
Here you go, h1b hires still get paid American salaries so that throws the whole 'they get hired because they are cheap' argument out of the window: https://fortune.com/2025/09/22/india-government-responds-tru...
>70% is a pretty insane number that certainly speaks for itself.
Also, when you start giving a lot of tech jobs to people from one specific country, then the github developer numbers will naturally reflect that.
Grandparent was referring to outsourcing, not H-1B hiring.
I am talking about bias in hiring in general. I am responding that the bias in hiring towards this one country goes beyond that it is 'cheap'.
It is easy to make the 'cheap' argument when you talk about outsourcing but it no longer makes sense when you look at h1b numbers.
> I am talking about bias in hiring in general. I am responding that the bias in hiring towards this one country goes beyond that it is 'cheap'.
Same bias happened when manufacturing moved to China. However, no whining on HN since at the time, blue-collar American red-necks were getting their just deserts.
> hiring towards this one country goes beyond that it is 'cheap'.
No it doesn't, not materially anyway. Stats can be misleading if you don't pay attention. A lot of the big corps started hiring H1-B in large numbers long ago but since H1-Bs can't easily switch jobs and tend to suck up to higher-ups, soon their mid-management was occupied by H1-Bs.
Anybody who has tried to find a job in such an environment knows the drill - Indian managers hire only Indians and prefer H1-Bs to keep them docile. Salary isn't a consideration there, but it all starts with "cheap" and is sustained by ethnic loyalty and fear of the outsider.
In smaller companies where hiring is more natural, H1-Bs are still payed less and their inability to switch jobs makes them cheaper still.
That's a commonly made argument, but it's innumerate. Low h1b salaries lower local salaries. The reason you hire h1b is because they're cheap, and then the only locals you hire are the ones that will work at the price of h1bs.
Local salaries might even be slightly lower, because you get to hold h1bs prisoner (an added benefit.)
GCCs are expanding in Canada, Ireland, Poland, Czechia, and Costa Rica as well.
Indians are more visible, but salary expections have gotten extremely out of whack in the US, and extended WFH during COVID proved to most boards that companies can continue to operate when entire teams are communicating async.
If a large portion of interns and NCGs in the US are essentially expecting $45-70/hr salaries, it just isn't sustainable especially when factoring the growing skills deficit because universities failed CS students to a certain degree over the past 10 years by watering down programs in a short term bid to compete against bootcamps.
If we are paying Bay Area salaries, we expect performance comensurate to that salary. Basically, all companies are now starting to adopt the Netflix model of hiring in the US.
I was making $50/hour fresh out of college back in 2014. And I worked remotely. $45/hour today is not great given the cost of living.
FWIW, I get on the order of $40/hour as a senior with almost 10 years experience, and it allows me not to worry too much about spending (with a wife earning about a third of my salary and two kids). I think I could easily earn at least 50% more if I wanted to work for some rich but soul-crushing corp, but for obvious reasons I don't do that. I guess US cost of living is just insane. (I live in central Europe.)
> FWIW, I get on the order of $40/hour as a senior with almost 10 years experience, and it allows me not to worry too much about spending (with a wife earning about a third of my salary and two kids)
How much do you pay annually out of pocket for health insurance premiums and other healthcare expenses?
In the US that expense is very high, and is a major source of worry for working families.
> How much do you pay annually out of pocket for health insurance premiums and other healthcare expenses?
Very rough estimation: $9000. I'm not sure how much my wife pays - this is paid by the employer and she usually doesn't bother to check. (This is mainly insurance, we seldom use public healthcare.)
My wife is a full-time-mother and is currently uninsured because we'd be looking at doubling the cost of insurance, and paying close to 25k a year for insurance. It is a completely broken system at this point.
I'm similar salary band, I pay 9% of my annual salary for mandatory medical insurance, but it's usually hard to get an appointment in reasonable time so you are going to pay extra 50-100€ for a visit to the same doctor, but in private clinic. And also vaccination and dental is not covered by that 9% payment.
For most white collar jobs like tech here in the US, your out-of-pocket as percentage is income doesn't play a role in how we decide salary bands.
For a family of four, the average health plan is around $10k out of pocket from the employee along with around $20k in employer costs [0]. Yet the median American SWE salary is $187k [1] versus $66k in Poland [2], $93k in Canada [3], and $111k in the UK [4]. Either way an American ends up earning significantly more after healthcare costs and insurance.
The issue is salary expectations at the lower performance band haven't kept up with what is expected at that salary band.
> In the US that expense is very high, and is a major source of worry for working families
When benchmarked against similar peer cities in Canada [5] or the UK [6], CoL is roughly at par yet salaries are significantly higher in the US, especially when comparing peer tech markets like SF [7] versus London [8].
This is the crux of the issue - demanding 100% WFH well past the end of COVID made it hard for us to justify domestic hiring when
1. Async was successfully proven to not impact business operation
2. A reverse brain drain of all nationalities in the US during COVID meant it was easier for employers to work with them to open a hub office or GCC abroad
3. A new grad is demanding salaries that simply don't make the economics of training and hiring new grads work. At $70k-$110k it does, but not beyond that.
4. Companies have now adopted the Netflix model - by cutting low performers, we can actually give higher pay bands to employees who actually have a business impact, as can be reflected in the rise in 75th percentile tech salaries.
[0] - https://www.healthsystemtracker.org/chart-collection/how-muc...
[1] - https://www.levels.fyi/t/software-engineer/locations/united-...
[2] - https://www.levels.fyi/t/software-engineer/locations/canada
[3] - https://www.levels.fyi/t/software-engineer/locations/canada
[4] - https://www.levels.fyi/t/software-engineer/locations/united-...
[5] - https://www.numbeo.com/cost-of-living/compare_countries_resu...
[6] - https://www.numbeo.com/cost-of-living/compare_countries_resu...
[7] - https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
I think you make some solid points, but there are major tradeoffs some of the data is not totally convincing. If US workers are so much more highly paid than foreign workers, then we can reasonably expect the best workers to migrate to the US whenever possible. It's pretty easy for Canadians to cross the border. So one reason to hire American developers is for quality. The other is simply that these companies exist in the US, which means collaboration needs to be done in US time zones, which makes overseas workers far less efficient, not to mention the major negative impacts on worker morale. So there can be reasons to hire out of country, but the tradeoffs are significant even when well executed.
> If US workers are so much more highly paid than foreign workers, then we can reasonably expect the best workers to migrate to the US whenever possible
Not really.
No one wants to leave their families, and the upper tier of salaries in alternative geos are high enough to capture the higher talent tier because their salary expectations are based on their domestic condition.
On top of that, the US immigration system is severely backlogged. It can take decades for Chinese and Indian nationals to become green card holders, and we as employees increasingly expect foreign nationals to pay the filing costs - not us.
> other is simply that these companies exist in the US, which means collaboration needs to be done in US time zones, which makes overseas workers far less efficient and having major negative impacts on worker morale
Not anymore. WFH proved async work models can ensure business continuity.
On top of that, the bulk of layoffs during COVID were workers on work visas who were given the option to return to their home countries and open an office there.
This is what Google did in Hyderabad, Bangalore, and Warsaw, Databricks in Bangalore, Amazon in Canada and India, and Nvidia in Bangalore.
Furthermore, we as employers don't really sponsor VPs, Engineering Managers/Directors, Product Managers, and Staff/Principal Engineers on O-1 visas. Most are stuck on some form of EB1/2 or L1/2, and those who apply to O1s who aren't founders or extremely critical to the business are being sponsored but filing out-of-pocket.
It just isn't attractive to immigrate to America long term anymore as a white collar employee in most cases now aside from unicorn roles which employees then use to boomerang back to executive roles or demand US salaries in their home country.
Ideally we need to build a domestic talent pipeline, but universities failed severely by watering down curricula in an attempt to compete with bootcamps, which burnt a lot of employers disincentivizing them from hiring early career, and state and local jurisdictions in the US just don't give us the support or pipeline needed to build a competitive early career hiring pipeline.
For example, in cybersecurity, I can hire someone in Israel who has done offensive security work for a couple years in a military, police, internal security capacity or someone in India who participated in one of the dozens of Police Force, Army, or Home Affairs cybersecurity internship programs. Similar programs like Cyberpatriots and the Cyber Incentive Program (approx $100M) were mismanaged as was found in a 2023-25 investigation by the DHS OIG [0][1] and an entire generation of students of cybersecurity scholarships quit in 2016 when the Trump 1 admin cut funding for cybersecurity scholarship programs.
[0] - https://fedscoop.com/cisa-cyber-incentive-program-dhs-inspec...
[1] - https://www.oig.dhs.gov/sites/default/files/assets/2025-09/O...