Sunday, October 13, 2013

Why I'll never leave Romania as a software developer

I am a +Perl software developer for 3 years and I'm a paid software developer for 7 years. I live in Cluj-Napoca, which is the second most populous city in Romania. 


It's been around 4 years since I started to have this feeling that I wouldn't have the same standard of living in another country as a software developer that I have in Romania. Back then I was netting around 700 EUR/month. Given that the average net income in Romania in that period was less than 325.91 EUR, it was probably the fact that I'm earning more than 2x than the national average income that created this feeling that I don't want to leave. Anyway, that was just a feeling and although I was earning that much compared to the rest of the people, I felt like struggling with money from one month to another. This struggling was caused  by my lack of money management, by the fact that back then my wife just started as a lawyer and the income she brought was nearly zero and by the fact that the overall purchasing power in Romania is extremely low.


Programmer's Income in Cluj-Napoca

Although the trend changed here and there from time to time, the general rule for paying a decent software developer in Cluj is the following (I'm always talking about after tax money - net income): 

  1. the developer starts with about 400 EUR
  2. every 6 months she gets a 100 EUR raise

Within some exceptional cases, things might vary - for good, or bad. 
In a good sense the programmer is able to force a raise:
  1. by simply asking
  2. by going to interviews to other companies,
  3. by changing workplaces from company A to company B and then back to A
  4. and of course, by having extraordinary performances and negotiating a raise
In a bad way, programmer's income can increase slowly if:
  1. the company he works for does not perform well
  2. he is not a good negotiator
  3. the company is a shitty one and, given that he's satisfied with what he earns, is not raising his salary although he deserves so
  4. he is not performing well

So, it not exceptional to find a programmer with 5 years of experience netting 1500 EUR/month, or one with 7 years of experience who earns 1700 EUR/month.

From Feelings to Numbers

Recently I found the great numbeo site which gathers prices from the cities all over the world and exposes them publicly. More, it can show comparisons between 2 cities regarding prices, salaries and correlating that with the total purchasing power, it gives estimates of one's needed income in order to live in another city.  With its help I could justify the feelings and confirm my hunches that it's impossible to live that well in other part of the world as I do in Cluj:

CityReference IncomeRent in foreign cityIncomeYearly net income
London47625,396.931,884.007,280.9387,371.20
Berlin27843,155.20800.003,955.2047,462.40
Amsterdam38264,336.131200.005,536.1352,033.56
New York48485,494.402,214.007,708.4092,500.80
San Francisco44845,081.872,216.007,297.8787,574.40

How I reached those numbers

Reference - it is how much one should earn in the given city to have the same quality of life as in Cluj, when in Cluj earns 1500 EUR net/month. In the table are displayed money after taxes, or net income, paying rent in both cities.
Income 1 - It is the net salary that one should earn in in the given city in order to be at the equivalent of 1700 EUR in Cluj, paying rent in both cities. I consider 1700 EUR, because this is close to my actual salary and it is an average income for one developer with 7 years of experience.
Rent in foreign city - rent for a 3 bedroom apartment, outside of city centre
Income 2 - given that I don't have to pay rent in Cluj and I'd have to pay in the foreign city, this is computed by accumulating Income 1 column and Rent in foreign city column
Yearly net income - Income 2 column multiplied with 12 

More Data Needed

We'd definitely have a much more clearer image if there would be a column with average programmer net income in those cities. Unfortunately, most of the sites I've looked are displaying only the gross (pre-tax) yearly income and it is rather impossible to compute the net income without thoroughly knowledge of the local laws and fiscal policies. So, if you have knowledge of the average net income a programmer earns in the above cities, please share them with us in the comments and I'll update this post.

Programmers Lifestyle in Cluj-Napoca

Given the low purchasing power in Romania in general, the day by day prices are also very small. Have a look at the numbeo page with prices for Cluj
In 1700 EUR/month you have whatever type of life you want - for a party animal, a way of living here can be: 
  1. eat in the city every day (12 EUR for 3 meals/day * 30 days = 360 EUR/month).
  2. go out in the most expensive clubs every weekend (30 EUR/night * 8 nights = 240 EUR/month)
  3. have as many beers you can drink every day of the work week in the most expensive pubs (5 beers * 1.5 EUR/beer * 22 days = 165 )
  4. circulate only by taxi (5 EUR/day * 30 days = 150 EUR)
  5. pay rent and utilities (370 EUR)
  6. total: 1285 EUR/month
If you like to live healthy, the costs are much lower. 
Cluj-Napoca is a university city, during the academic year its population increases with 33% (100 000 students are here) making it a busy town. Almost every day there is some cultural event to be part of, a movie projection somewhere, a concert to attend, or a party in some club. Being surrounded by so many young people makes me feel younger (I'm not that old though, I'm 31).
I live at one end of the city and Evozon's office is in the center of the town. It takes me 10 minutes by car to reach there, it's great.

Conclusions

Besides money, there are definitely other things when I considered moving, like entrepreneurial opportunities. That is why I chose the above cities: they are some of the most active cities with regards to startups and IT in the world. Those would be the cities I'd consider moving to when my entrepreneurial desires will take over. But until then, I am staying here and I'm doing my best to be an active part of the young startup communities that are getting born in Cluj.

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