The less the median developer on a software project team is paid, the more the project will cost to complete.
Traditional business wisdom states that paying less for a developer results in a cheaper project cost overall. So companies lower salaries, cut bonuses, and outsource for cheaper labor.
Except the less money you pay, the less skilled and motivated the worker. Sure they bang away at the keyboard for less money per hour, but will they produce high-quality, clean, concise code? Will a cheap developer have the skill or the motivation to find an elegant and simple solution to a complex business problem? Experience says not.
When you try to turn real people’s passion into interchangeable “man hours”, then what you end up with is a guy banging on a keyboard, not great software.
