i think Devs in other countries make too little

March 12, 2024

Labor markets are not global even when software is. From a market design lens, this is segmentation and monopsony: firms have local wage power while remote demand is gated by networks, language, and trust. The result is that a developer can ship globally useful code while being paid like the work is local and disposable.

I paid a developer in Peru about $400 for two weeks of work. The output was real value, but the compensation was a local equilibrium, not a global one. A friend who worked at NTTData and another company building cloud infrastructure had strong fundamentals, yet comp still tracked local benchmarks instead of value created. It is not that the work is less valuable; it is that the bargaining set is smaller, and the market price is sticky.

The technical framing is efficiency-wage theory: pay closer to global productivity to reduce churn, raise quality, and capture compounding knowledge. In software, that compounding is brutal: a seasoned dev carries tacit system knowledge, deployment heuristics, and incident response intuition you cannot buy with a cheap replacement. The codebase becomes a memory palace, and underpaying is like erasing rooms every few months.

A concrete example: a data pipeline team in Lima can ship a stable ingestion service that avoids silent data loss. If they are underpaid, the team turns over, and you rebuild operational knowledge every quarter. The real cost is not salary, it is error recovery and lost learning loops. Every incident becomes a rediscovery of the same root causes.

If you want durable systems, pay as if the market were global. The risk you avoid is not just bugs, but the drift between who creates value and who captures it. In the long run, stable teams are cheaper than endless relearning.