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Why do business analysts and project managers get higher salaries than programmers?

  NRM      2011-11-21 03:06:30      1,554    0    0

People get paid less than their employers' "reservation price" (the most they would ever pay), and more than their "marginal product" (the least they would ever work for). Your actual pay on that spectrum is based on your bargaining power, relative to your employer.

Say your services to your company are worth $1000 a day. Under the gun, he would pay you that if he had no other choice. Say you would work for $100 a day if you had no other options. That's your range.

Say you're new and independent and unknown, and your boss is Google. Google has more bargaining power, because they can just wait and hire someone else, and lots of people want to work for them. You have less power, because you have to pay rent, so you'll get closer to $100 than $1000 a day.

Say you're the last COBOL programmer on Earth, and your boss's mainframe runs COBOL. Then you have more bargaining power, and will get closer to $1000 a day.

SO, either PM/BAs are worth more to the company, OR they have higher bargaining power. I don't think it's the first option, so must be the latter. Good people skills are rare. It's also hard to outsource them, as they have to meet clients. Their relative scarcity gives them more bargaining power, and thus higher pay.

Update: if you would like some more good info on pricing, this book is excellent and is used in many MBA programs.

Source:http://programmers.stackexchange.com/questions/45776/why-do-business-analysts-and-project-managers-get-higher-salaries-than-programme

PROGRAMMER SALARY DIFFERENCE PROGRAM MANAGER BARGAIN POWER ECONOMIC

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