The yawning salary gap

Steve Hamm

There's so much talk about tech industry salary inflation in India. And there's no question that it's a problem--both for India's competitiveness with other low-cost countries and, day to day, for companies that are fighting it out on the ground for talent. But my checks with a handful of data sources suggest that the wage differential between the United States and India will remain substantial for a long time.

A survey from Dice Holdings, an online recruitment company, showed that IT salaries in the US increased 5.2% last year to $73,308. Engineers with in-demand skills get paid even more handsomely: ERP: $96,161; CRM: $90,499.

In India, IT leaders say, salaries for software programmers are rising at about 15% per year. Sounds high until you see the base those numbers are coming off of. Survey data from PayScale, another online recruiting site, show software programer pay averaging $8,200 in the state of Karnataka, where Bangalore is located. In Tamil Nadu, where Chennai is fast becoming a tech hot spot, the average is $5,800.

If you do the math you see that the average US tech employee's pay increase was more than half the total pay of an Indian programer in Tamil Nadu. At that rate, it will be a couple of decades before Indian pay scales draw close to those in America.

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