New Mexico is well known for its long stretches of fiery deserts, rich Native American culture and spicy food that can make people tough-as-nails drop to their knees and cry. What it isn’t known for: its startup scene, at least not in the same way as tech-heavy metropolises like San Francisco and New York.
That doesn’t mean, though, that people who live there don’t want to be a part of it.
“This is the kind of place where I want to raise my child, and with my wife finishing [school], it became more apparent that I needed to stay in Albuquerque. But there weren’t really that many options for tech work,” says Jackson Stakeman, 36, who left the California coast five years ago to be close to his parents, both of whom retired in Albuquerque. “I was getting pulled back to California, and it’s just not what I wanted.”
Stakeman eventually found work locally as a programming analyst and is now a senior consultant at Rural Sourcing Inc. (RSI), which provides IT resources in second- and third-tier cities around the country. But his plight to find a tech gig in a tech desert — no pun intended — is not anecdotal.
In 2015, close to 60,000 computer science degree-holders graduated from American colleges. Many of them live in what’s derisively called “flyover country” and have had to choose between leaving their cities or finding different work. With the concentration of tech companies located on the coasts, hiring managers have historically been forced to either recruit workers to relocate to these tech hubs or hire abroad.
All that has started to change, though, as both uncertain immigration policies and an increasingly expensive offshore workforce have pushed companies to seek talent in less-known U.S. cities.
Though some major companies, such as IBM, have pushed for hiring Americans in the wake of the current administration’s call for keeping jobs at home, others, like General Electric and Walmart, caught on years ago and began refocusing on “reshoring,” also known as domestic outsourcing, well before the modern rallying cry from the White House.
Between 2009 and 2011, 26 percent of American companies were looking to use offshore services. Two years later, that number dropped three points while interest in reshoring increased by 10 percentage points, according to a report by The Economist.
Much of the shift has to do with the costs associated with offshore work, which has increased in the past decade.
The internet initially made India and China prosperous for their ability to provide cheap labor to help design and build websites. But companies have become frustrated with the offshoring model, particularly as technology has advanced well beyond simple click-and-scroll websites to more interactive and complex ones — all of which require increased communication and response times from programmers.
“It takes so much overhead to manage a team offshore so that you can get over all the societal differences and language barriers. The reality is you can do it a lot better and faster if you just pick up a phone and talk with someone,” says Heather Terenzio, CEO of Techtonic Group, an outsourcing software development company in Boulder, Colo. “Everybody has a horror story about offshore outsourcing.”
That frustration isn’t uncommon, according to Monty Hamilton, CEO of RSI, where Stakeman works. With headquarters in Atlanta and four development centers elsewhere, including Albuquerque, RSI provides domestic outsourcing for larger companies by hiring programmers to work remotely from wherever they happen to live, whether that be the Midwest or the Mountain West.
“Offshoring was very good when it was a prescriptive solution,” Hamilton tells NationSwell. “But when it’s a more creative idea, now you have to add some people who can ask critical questions.”
Those critical questions often go unanswered when outsourcing to foreign workers who are more rote in their objectives, says Hamilton. He adds that the costs that come with hiring American aren’t significant enough to merit continuing an offshore practice.
“What used to be a 5-to-1 pay gap [between domestic and offshore workers] for professional development is now a 2-to-1 gap,” he says. “The gap is not worth the inconvenience factor.”
Indeed, the costs of offshore outsourcing have risen, with wages increasing nearly 72 percent each year between 2000 and 2008 in emerging countries, according to a 2013 report by the International Labour Organization (though that trend has reversed in some Asian countries).
Anecdotally, Terenzio agrees, telling NationSwell that while Techtonic hired offshore workers in Eastern Europe for 10 years, it experienced its own set of difficulties.
“We were finding that we had to write up every instruction with so much level of detail that we realized we could just train a junior developer in the U.S. with much more ease,” she says. “We’ve seen firsthand our productivity and efficiency go up, and our headaches go down.”
By hiring domestically for their IT and other tech needs, U.S. companies seem to be catching on.
“What we’ve seen is that people in tertiary cities would really like to make $50,000 to $60,000 as a programmer,” Terenzio says. Though that stands in stark contrast to the high six-figure incomes that developers in Silicon Valley can command, the cost of living in the Bay Area dwarfs most other places. Hiring workers in small towns is a win-win, she adds: “Wages there are lower, and people there are dying for those jobs. If you can outsource to India, you can outsource to somewhere in the U.S.”
And there’s a community benefit, as more people in smaller cities want to get in on the higher salaries that tech offers and keep those dollars in the local economy.
“Denver is my home, and I felt like I could navigate myself here in any path that I took,” says Barry Maldonado, a project manager at Techtonic, speaking of his time figuring out a career move from the nonprofit world to tech. “There were guys I knew who were younger than me and really succeeding not only in their positions but also in the financial side of life, which was one thing I still needed to work on.”
Maldonado enrolled in a coding bootcamp and was hired by Techtonic as a junior developer. His financial situation has “changed drastically,” he says.
Stakeman, the Albuquerque analyst, says that even though he no longer commands a West Coast salary, what he pays in New Mexico for his two-story home with a three-car garage is about the same as he did when living in a studio apartment in Southern California.
When asked if he was living comfortably, despite forgoing a six-figure salary, Stakeman was succinct: “Oh yeah. Oh yeah.”
Continue reading “Creating Big-City Jobs in Small-Town America”
Tag: salary
How an Ambitious Program Is Empowering Boston’s Women to Stand Up for Equal Pay
To eliminate the gender gap in paychecks, women must know how to ask for higher salaries comparable to their male colleagues, the proponents of a Boston initiative argue.
AAUW Work Smart, a partnership between the nonprofit American Association of University Women (AAUW) and the Mayor’s Office of Women’s Advancement, offers free salary-negotiation workshops to any woman who lives or works in Boston. At libraries, YWCAs and community centers, volunteer professionals coach participants on coping with their anxiety to effectively ask for a pay bump. Since the program’s 2015 launch, AAUW has hosted 72 workshops from downtown to Dorchester, reaching 1,700 women in the process. And that’s only a small slice of the goal: Over the next four years, AAUW Work Smart intends to reach 85,000, or half of Boston’s working women.
“If I’m working on the same project with the same job and same responsibilities, and I’m getting 64 percent less money than [my male colleague] does, that psychologically brings you down. It doesn’t empower you as an employee. It doesn’t motivate you to do the best of your ability,” says Kristina Desir, AAUW Work Smart’s program manager. Through the two-hour interactive workshops, “we’re trying to get women to get pay equity on their own.”
Nationally, women make 80 cents for every dollar a man makes. Over the course of a year, that adds up to a $10,470 difference, on average, for full-time, year-round workers. In Boston, as in the rest of the country, the racial gap compounds the problem. There, Asian women make only 77 cents for every dollar a white male takes home; black women, 63 cents; and Hispanic women, 52 cents.
Megan Costello, executive director of the Office of Women’s Advancement, doesn’t view those numbers simply as a feminist matter. The wage gap affects the city’s entire economy, she explains. ”If the majority of our city is underpaid and not paid what they’re worth, that not only hurts them as individuals but it hurts their families, their communities, and it hurts the entire city of Boston,” she told WBUR, the local public radio station. “So this is the right thing to do, but it is also important to the economic vitality of the city.”
To improve the stats, Desir’s workshops dispel the typical anxieties: “The fear of employers saying no, the fear of missing out on a job.” First, she focuses on teaching women to know their worth, to quantify the value they bring to a company. The instructors — many of whom come from Morgan Stanley — then demonstrate how to find industry-wide standards for salaries and benefits online. They also walk the women through different negotiation strategies, like asking for a better title even without a pay raise. After that, in pairs, the women practice role-playing as a manager and an employee asking for more pay.
There’s been some encouraging anecdotal results from Work Smart so far — one woman, for example, negotiated a 40 percent raise — and the model is expanding nationally, most recently to Washington, D.C., and San Jose and Long Beach, Calif. But Desir cautions that workshops alone won’t eliminate the gender gap in salaries. She hopes that, by teaching women how to advocate for themselves, the culture at large will start to shift and that one day, the burden won’t fall on women to demand what they rightly deserve.
Meet the School Chief Who’s Offering Double-Digit Raises to Teachers
We all know that good teachers matter. It’s just common sense that a child learns more with an outstanding educator leading the classroom.
That’s why Antwan Wilson, Oakland Unified School District’s new superintendent, has come up with a bold move to retain and attract the best and the brightest teachers. As SFGate reports, Wilson’s “Pathway to Excellence” plan includes a 10 percent raise for teachers over three years.
“Paying teachers is extremely important,” Wilson said in a press conference. “We have a double-digit (pay raise) offer on the table right now. On salaries, we are behind, but in benefits, we’re way ahead. But when you add those together, we’re still behind.”
Oakland, Calif. district teachers make less than their counterparts in Alameda County, according to the Oakland Tribune. (The median salary for Oakland’s public teachers is $59,782). Funds for the raise will stem from an extra $12 million the Oakland district received thanks to California’s schools funding program, according to the publication. Counter proposals will be considered next month.
MORE: Paying it Forward: Why This University President Gave Up a Quarter of His Salary
“If I am a teacher, what’s going to attract me to this district is how I was made to feel special,” Wilson added. “When we recruit you, did we talk to you and were we excited about you, or did we hire you and just forget about you? We need to think about their best interests, the best fit for them and how we made them feel successful.”
It’s no secret that the men and women who are trusted with educating America’s youth don’t get paid very much. The average salary for public school teachers in the United States is $56,643 a year, with many teachers making much less than that. By raising salaries, it incentivizes teachers to stay, and it also attracts new teachers to come aboard.
You might be surprised how big of a difference a good teacher makes. According to a (controversial) 2011 study cited in TIME magazine’s recent cover story, replacing a poorly performing teacher with a good one could increase students’ lifetime earnings by $250,000 per classroom. And as we previously reported, the (rigorously screened and highly experienced) teachers at an experimental charter school in New York City called The Equity Project (TEP) have a stunning salary of $125,000 annually. The result of their Wall Street compensation? Students have higher test scores and are accelerating their education; a Mathematica Policy Research says that TEP students learned in four years what would’ve taken more than five and a half years at other schools.
It’s clear that a good teacher can make a big difference in a student’s life. If we want to put the best educators in America’s classrooms, it’s time they are given every penny they are worth.
DON’T MISS: The State That’s Actually Hiring Teachers and Paying Them More
Paying It Forward: Why This University President Gave Up a Quarter of His Salary
As the debate over the national minimum wage rages on, one man has decided to take action on his own.
Raymond Burse, the interim president of Kentucky State University, has decided to take a $90,000 pay cut to boost the wages of the campus’s lowest-paid workers, reports the Lexington Herald-Leader.
Burse, who was set to make $349,869, will now make $259,744 annually after the cut was approved by the school’s board of regents. According to WLKY, he said that the pay cut was “necessary since some of the employees were making as little as $7.25 an hour.”
A total of 24 employees will now earn $10.25 an hour. Their new rate will remain even after a new president takes Burse’s place.
MORE: What This School District Administrator Did Will Warm Your Heart
“This is not a publicity stunt,” Burse told the Herald-Leader. “You don’t give up $90,000 for publicity. I did this for the people. This is something I’ve been thinking about from the very beginning.”
Burse first served as Kentucky State’s president from 1982 to 1989, then became a senior executive at General Electric for 17 years before retiring in 2012 with good benefits, reports say.
Even though Burse has brushed off his generosity, other public university officials might want to take note since many of them earn abundant salaries, such as Ohio State University’s E. Gordon Gee, the top-paid public college president in the country, who makes $1.8 million annually. (Vox notes that there are a few other college presidents who, like Burse, have decided to raise the minimum worker wage on their campuses.) And according to report from TIME, from 2009 to 2012 salaries have skyrocketed: “Executive compensation at public research universities increased 14 percent to an average of $544,554, while compensation for presidents at the highest-paying universities increased by a third, to $974,006.”
Burse said, however, that his gesture wasn’t meant to urge other presidents and execs to take similar action, telling the Herald-Leader that he was merely in a position where he could spread his wealth.
“My whole thing is I don’t need to work,” he said. “This is not a hobby, but in terms of the people who do the hard work and heavy lifting, they are at the lower pay scale.”
So while Burse might not be encouraging his peers to follow his lead, we certainly hope others do.
DON’T MISS: A Northwestern State Proves That a Higher Minimum Wage Doesn’t Necessarily Increase Unemployment
Could Making Salaries Public End the Gender Pay Gap?
Journalism circles are abuzz with speculation about why the first woman to take arguably the most prominent role in the industry was, by all accounts, fired with little fanfare last Wednesday for her two-and-a-half years of service.
One of the possible reasons provided for this unexpected dismissal: Jill Abramson may have asked too many questions about pay parity. But one writer has a possible solution to this troubling situation facing females — more salary transparency.
The oft-studied gender pay gap has become a touchstone in the modern workplace. As more women graduate college and demand job parity, they want (and deserve) equal pay, too. It’s not just a philosophical debate, but one that impacts families, poverty rates, and a host of socio-economic issues.
More: Ask the Experts: The Pay Gap Explained
Experts have suggested that flexible work schedules and pay scales that depend on output — not hours logged at a desk — could rewrite the pay equity debate. Publicizing salaries also has the potential to change salary inequalities. As the Quartz column notes, staying mum on salary information helps employers, not employees. “Making pay more transparent won’t close the gap on its own, but it puts a burden on companies to at least explain any disparity, and begin to resolve them,” writer Max Nisen notes.
Some firms have started posting salary information on the web. And the salaries of most government employees are public record. The Gray Lady may not be that agile, nor so inclined. But as the fallout from a story that turned a glass ceiling into a glass cliff continues, perhaps it’s time to revisit our assumptions about who knows what when it comes to salary equality.