It is often mentioned that Software Engineer salaries in Europe are significantly lower compared to US salaries, even adjusting for lower Cost of Living.
The consensus on why that is seems to be: * Individual contributors in Europe are not as valued as much as managerial professions, due to cultural/historical reasons
* Salaries in the US are skewed due to the presence of FAANG companies and VC money, which inflate salaries through the large amount of capital they inject in the system
* Europe has less freedom of enterprise (debatable), is in general more risk averse, and has a less dynamic job market (more difficult to fire lower performers), which results in lower wages to compensate for these factors.
Reasons aside, how can the European tech job market become more competitive?
The thing is, I just can’t find an argument why I should be able to get very rich doing my job. It’s a comfortable job. It pays a good salary. I got here by taking no risk at all. I wouldn’t want to switch jobs just to drive up my pay even if I could. I have other things to think about. I have worked 20 years in the same job and so have my colleagues. This is a cultural difference I feel.
You can't have low inequality by definition if you decide to start paying one group a ton of money.
Well, this is a lot like the housing conversation in the US. "I want my house to go up in value, and be a great investment!" Also: "Why can't I afford a house?"
You can't have your cake and eat it too.
It's not necessarily a failure, it's just a different place to draw the line on social contract. While individual contributors earn less the social safety net also makes it much easier to found and grow a business without the threat of death and guarantees a peaceable minimum standard of living. It's also worth pointing out that salary, especially at high seniority levels, becomes a smaller and smaller part of total compensation.
"You can't have low inequality by definition if you decide to start paying one group a ton of money."
Very few of even FAANG-level salaries are high enough to put them in the same bucket as the people who wield power through their wealth. Paying the entire field of SWE laborers even 50% more salary is not going to appreciably change the inequality gap.
You can, if you give the other groups a ton of money too.
Wages in Europe have stagnated compared to GDP [1] too, so it's not unreasonable to fight for higher wages.
[1]: https://www.robert-schuman.eu/en/european-issues/0289-labour...
That's true, but the question is, the higher salary you refuse to take as a SWE in Europe, does it really go instead to someone else in need of it? Or is it just pocketed by someone who already has more money than you?
Sure, but you can still ensure that the lower classes have a good standard of living. Most wealth isn't zero sum. People talk about income/wealth inequality in the US, but to me, based on the complaints people have, it just seems like a proxy for poor standard of living.
> Well, this is a lot like the housing conversation in the US. "I want my house to go up in value, and be a great investment!" Also: "Why can't I afford a house?"
The big difference here is that the supply of land is fixed, and thus (almost all) housing wealth is zero sum. But for other things, this is not the case, so you can't apply the logic of housing to other things.
If you're a SWE on a half or even a third of an SV salary, you're still in the top 5%. Do you feel rich? No. Are you easily able to buy a house in the southeast early in your career? No. But for every person earning more than you there are twenty earning less than you.
The number of super-rich dominating the conversation, the political donations, and the housebuying is surprisingly small, and most of them make far more from investments than from salary. Actual income for "work" caps out at a few million for celebrities and sportspeople.
Even among the ordinary I know people who've been out-earned by their houses - that is, the annual rise in the value of their (mortgaged) house was more than their salaried income.
If you were to compare the roots of Computer Science and its culture to other professions, it initially stemmed from the nerds and nerds were always trained to see themselves as low status, in fact by definition being a geek would make you an outcast amongst others..
It just so happened by pure luck that many successful startups grew thanks to our field and being a SWE became suddenly desirable.
So I'm not surprised that demanding a fair wage or forming unions are some of the things we struggle with.
Our industry is constantly trying to bring its own value down (anyone can code, it's easy,..), you never hear about other industries complaining they are "overpaid" or belittle the value they bring to people and businesses.
It's an unfortunate truth about studying CS and if I may be boldly controversial on HN, it might also one of the reasons we don't see too many women in this low status field.
I think when it comes to Europe people should specificity the countries. If you take Europe or even the EU as one entity then it is one of the most unequal places on Earth when it comes to income and wealth.
Bulgaria is an EU member state and in 2018 had an adjusted net national income per capita of $8,148.[0] Luxembourg is part of the EU as well and in 2018 it was $60,189. Denmark was at $52,641. Poland was at $12,954.
All of this varies enormously from country to country.
Now what happens if you include expats in the calculation?
> makes it much easier to found and grow a business without the threat of death
And yet you see a lot of Europeans and Canadians founders going to the valley for funding. Yet the opposite almost never happens.
This problem isn't unique to the US, and exists in Europe too, as well as New Zealand and probably other countries too. For this particular point, the US and Europe aren't all that different.
Many of my colleagues in Europe, make far less than 1/2 of what I do from a compensation perspective. However, they're able to live essentially the same lifestyle I am. Nice flat in a vibrant, walkable, top-tier urban locale with the ability to afford most things in life. They're able to do so because they have less worry about surprise medical bills, paying to care for their elders, saving $200k for the kids' college, etc. My employment is also at will. I can leave or be forced to leave at a moment's notice.
Obviously, I'm only offering anecdotes here, but (IMHO) once that lifestyle moves out of reach, then companies will be forced to increase pay.
The inequality exists between those who need to work for a living and the ownership class that does not.
The remote work proposition in particular is extremely enticing. Getting paid in a currency with 10-20% more buying power while still receiving the same government services was pretty swell.
This does not mean that devs are supposed to earn millions, but 2x or 3x average salary is not the inequality that's ethically bad.
Wanting affordable home ownership is not contradictory to growth of home asset prices.
I also think your argument about income inequality is not right. Achieving income equality by suppressing wages and paying below competitive market rates is nothing to be proud of - and largely for professions like SWE, it has absolutely nothing to do with income levels at the low end close to poverty, which is what matters when understanding income inequality.
We should be raising purchasing power and unlocking possibilities for people. That’s the real purpose of reducing inequality.
Otherwise we can just take the trivial solution: destroy all technology and return everyone to subsistence agrarian society. Near perfect income equality, near zero societal level wealth.
That said, living in Europe doesn't always equal good living conditions and stability - it depends on the particular country you're in as well.
My net salary is just over 1000€ per month as a software dev. My living expenses eat up around half of that. If a quick search turns up that in USA the median salary for a dev is around 100k$ per year ( https://money.usnews.com/careers/best-jobs/software-develope... ), that means that i'd need anywhere from ~8 to ~14 years to save as much as they could in a year (depending on their disposable income, taxes, currency value etc.).
In short, i'd much prefer not to spend a decade to get to the point where i'm as financially stable who's worked for a year, if even that.
People oftentimes mention purchasing power parity, but it breaks down in a global economy: for example, i cannot afford AWS and most SaaS/PaaS tools.
That's just one of the reasons why one could look for a better financial situation. Compound interest and investments in general could be another. Stability and peace of mind, although not guaranteed, could be a third.
That's really low, even for poorer European countries. Decent middle-level software engineer in, let's say, Ukraine (no offense meant - it is a good country, just isn't one famous for high incomes), easily makes at least 2k (and I say "at least" - that's awfully underpaid).
> that means that i'd need anywhere from ~8 to ~14 years to save as much as they could in a year
That's a bit exaggerated figure. It's 100k before taxes (so, around $5.8k/mo), and rent (or mortgage) costs are significantly higher (I believe it's around $1-3k/mo, highly varying depending on where you live and how comfortable you live). And it's not just rent but other expenses as well.
Now that companies are cozying up to remote work, I think I’ll jist do more frequent 3 month trips and work in the evenings when I run out of vacation days. Then I can keep my cushy American salary and afford to travel, avoid dealing with VISAs, and France get my cost of living / tourism money without me taking a Frenchman’s job. Seems like a better arrangement all around.
You would be underpaid in India, where I live, let alone Europe.
You're way underpaid even for Latvia. The national average now is 1100 EUR gross, or 812 EUR net (https://www.lsm.lv/raksts/zinas/ekonomika/videja-alga-uz-pap...), but for the IT field the average gross is 1829 EUR, which I believe is around 1300 net. Unless you're somewhere in Latgale where everything is much cheaper, or unless you just graduated last year, your net income should be at least some 20% higher.
Obviously, you'd have much higher living costs and the weather would be slighty worse, but lets face it no one lives in Latvia for the weather either!
I would like to know what country/city you are based out of. In the US, that wage is well below the poverty line.
You seem to be completely unaware of how wildly the cost of education has increased even over just the past decade, especially for 4-year institutions.
I just want to point out how incredibly, incredibly rare that is for anyone to have that experience in the US today, where according to you:
1. You were able to graduate debt free, and since you say you had no debt "through scholarships and grants", I'm taking that to mean your parents didn't pay for your college. While that is certainly possible (e.g. some colleges offer free rides for very top students), it is VERY rare.
2. You intend to save nothing for your children's education. That is not only exceedingly rare, pretty much all financial aid packages expect/require a certain amount of parental contributions. You better hope your kids get lots of scholarships and grants, otherwise they won't be going to college.
Personally, I went to a top US university. I had some grants and scholarships but my parents still contributed a good part to my first 2 years, and I graduated with considerable but manageable debt. I've worked in software jobs over the past 2 decades, including 1 company where my stock options were worth a considerable amount, so I've saved a lot. I work considerably more than 40 hours a week, so honestly I'm quite envious of your "20-30 hours a week" story - I don't know any job where you can work that little and still get paid that well. I see a very large portion of my salary every year go to healthcare and retirement, and as I am childless I don't have to save for my kids education.
I mean, I'm doing quite well, and I still have anxiety about all the things I need to save for. I can't imagine making a more median-level salary, with today's cost of education, and with kids, and not being much more stressed at the prospect of having to handle everything financially.
A lot of things are possible but not probable.
That's a pretty scuffed mindset, man. Set your kids up for success. There's no virtue is going head first into crippling debt.
Deleted Comment
This is the most European thing I've ever heard. Most people would not like to take risks and would not even think about stepping outside of their comfort zone. Personally, I think this is the reason why there are less startups in Europe compared to US. No one would like to take a risk unless it's absolutely necessary.
> I have worked 20 years in the same job and so have my colleagues.
I do not mean to be offensive and I know everyone has their own cup of tea. But 20 years doing the same the job?? This would literally be death to me personally as a software engineer. Changing your job is part of your career growth in-order to expose yourself to new challenges, problems and new environments. Of course this comes with a risk factor and personally, this risk and excitement is what makes life interesting. I would kill my self if I got stuck in the same job for 20 years.
If you have a good job with a stimulating environment, colleagues, and decent pay, then the perception of being stuck does not exist. Over time the role will change to reflect the changing organisation and role.
Results? Unimpressive, fails over fails.
I know value the steady job I have and I keep tearing myself for not opting for this sooner. I don't know if I would be already burnt out if I haven't tried, but timing wasn't great, that's for sure.
Thank you
> This would literally be death to me
I think how often you change jobs depends on the challenges and type of work. My first project was over 10 years from start to initial release.
I don't think switching jobs is that necessary if you can be challenged in your current job. Ever changing problems are exactly why I'm staying. I tried switching to do some web work in a couple of places, but found that I really hated it and that most things in the "web stack" are just crud and it's really hard to find really hard or complex problems in the space (Where the complexity isn't in something tangential like ops/configuration/scaling...). I'm an engineering/math type person so it's a bit scarce.
I keep a constant lookout for new jobs, but I filter out 99% of positions simply because it looks like generic web tech jobs.
It's mostly a rational calculation. Because of crab mentality and stigma of failure, the downside is worse in Europe. The expected value of risk is lower than in America.
A lot of people prefer work to live, while others prefer live to work. Both strategies are perfectly fine.
In some sense this is true, but lets not get carried away. The American Startupism is all about the flash, big growth, big impact, big IPO. In EU you have companies slowly grinding a hard problem for 20 years that also have huge impact but no flashy news. Look at things like vertical farming, ASLR, fintech. Thats all thanks to low risk and stability.
I calculated moving to Europe as a SWE would lead to a drastic lifestyle change for me—even with retirement, healthcare and children's education considered (with 2 children, Europe wins at 3 hands down).
"Isn't it inconvenient that you have to work for someone else for 8 hours every day, only so you don't need to start a fire?"
I'm positive you can do all of those things with an average salary, at least in northern europe. There is little to worry about once you have a roof over your head. You may not have that Tesla though.
Its stress reducing in itself and versatile.
Nonetheless i also think its a better strategy to become rich enough fast and then retire earlier to have more time for myself and to cook more and do other normal things myself more often again.
As long as i don't have a realistic chance of getting so rich, that i can buy an island, or/and travel for 20 years firstclass, my life will not change anymore in any significant way with me earning more money.
Curious - Can you explain your calculations and did they include a difference between price vs value?
Honestly this part of the European mentality is hard for an outsider understand. I lived there for ~10 years and heard this argument countless times.
I want a fulfilling life and part of that is a fulfilling job. It's hard to believe a job on the same company can be fulfilling for 20+ years. Changing jobs is part of professional growth IMO.
Different strokes for different folks I guess.
I don't see why not. I have never worked for small companies (always 25k+ sizes ) so my view may be skewed but the scope of these companies are so large that changing a project can mean totally different ways of working and sometimes totally different industries. Can it be that it's easier in europe to change your job context within the company and not so in america?
> Changing jobs is part of professional growth IMO.
Actually it's hard for me to understand why this is taken for granted in America and my home country India. Sounds like KPI chasing to me.
In my experience, the only companies I’ve been in where all my coworkers were first class was in the Netherlands.
I cannot see myself working 20 years in the same company in the US or Japan, but I think I can see myself doing it in the Netherlands.
If I was working in web/db/internet stuff there would be much more jobs of the same kind. Then I’d switch more too I think. The reason I’m sticking is also because I work in a niche (which I like).
I’m also from Germany. There is significant wealth inequality, but making €40-60k pre-tax a year is very attainable for most developers here. In Switzerland, it’s even higher (€60-70k+) and they have to pay fewer taxes (with a higher cost of living).
But the „average life“ in Germany for a developer is very good. About 4-5 weeks of vacation every year, no expectations of working more than 9-5 (at the average employer), and after 1 year working at a job you’re eligible for unemployment insurance which means you get 60% of your net salary for 1 year if you’re unemployed.
With regards to attaining riches:
You can live comfortably with €2000/month net as a single (and easily with €3-4k with two incomes and two small kids in a smaller city), so for most people, it’s possible to save 500+€/month (most don’t because of lifestyle inflation, but that’s a different matter). With side hustles (small freelance work) you can easily save €500-1000/month which means that after 5-7 years you are able to save €80,000. Continuously investing in stocks, pension plans and ETFs (what most Germans also don’t do) means that you can accumulate half a million euros by the age of 45-50.
And this is the average developer, no 10x rockstar. Having a net worth of €700k to one million euros when you’re 67 years old with a very good work-life-balance is nothing to be ashamed of. With more ambition, you can freelance for €75/h which translates to a six-figure income. With that, it’s possible to build a net worth of 2-3 million over 20-30 years.
For people who want to be a millionaire in 10-15 years, this is not very attractive. But when you consider the work-life-balance and the labor rights, it's easy to see how people would choose that. For high-achievers, I would also recommend working in the US or Switzerland. But for average developers, it's not that bad of a deal.
Nearly all employees would accept more pay if they were offered it, nearly all employers would pay less if they could - so like any market it is always an equilibrium between the two. And frankly in some job markets the salary is negotiated better than others.
There is a sort of learned helplessness to 'I don't deserve more for this job' etc. in the eternal words of Unforgiven - deserve's got nothing to do with it.
I completely agree.
I certainly would accept more pay. But I wouldn't switch jobs just to get it. There are several reasons, most importantly that interesting jobs in my niche are scarce. So my employer has a resource that is perhaps scarcer than myself!. Second (and this is the part where it becomes self-fulfilling), because there are no super high salaries, I'm close to a kind of ceiling. I'm not sure what that ceiling is and you could always be lucky and find some extremely well paying job, but let's say that for a job I'd be willing to do, the ceiling is within 50% more than I'm currently making.
If marginal taxes are 50% (at least), then that's a net 25% pay rise. It's basically $1500 more a month net, and it would require me to make probably several job switches. It's certainly not insignificant, but it's just not significant enough. Had there been jobs across the street paying 3x what I do, then certainly I'd start chasing more money. But I value my 6-8w holidays, I can already afford to travel etc. I'm comfortable.
And the maximum you feel you can get away with. It’s a market, after all.
I've seen people (including myself) trying to change the lifestyle, thus money is a vehicle to do so and to build something with. Not everybody has got rich parents or sugar daddies, some people start from nearly zero and try to climb the social ladder.
A higher salary can unlock multiple benefits, in terms of long-term economical security (e. g. in case of market crash and companies go bankrupt / berserk mode, laying people off) and maybe buy yourself a house/apartment.
Plus, saving for children's future is one of the best gift a parent can do.
Coming to an end: having a salary which is similar to what in SF are offered would be really good
I see this opinion a lot and I do take it personally.
I come from a workers family and getting into IT was hard. I still pay off a (small 10k) debt from university. It took me years to get into the industry, working for very little pay. All the while I didn't do anything for my pension. Now I have a good income, but income alone is not enough to buy a house near the city. Having a migration background in Germany might not have helped.
Do you really think engineers, bankers, administration, lawyers, teachers and real estate agents have it worse?
In an industry that's created to destroy jobs, why would I work for less?
Another way to think about this is that your job generates certain value in the economy. If labor's salary doesn't capture that, then that value is going somewhere - either to your governments via taxes or to capital owners. I understand that some Europeans will not have problems with the former, but are you comfortable letting capital class capture all the remaining value after taxes? If not, that is a good enough argument because allowing that to happen is what is driving wealth inequality to high levels.
Exactly this. European social democracy allows people to have relatively calm life without burden to start their careers with huge school debt. Or worrying about health insurances. Once you will have family (OP), you will see that not saving for their health insurances and school also helps a lot and I wouldn't change this for USA system. On the other side, it is very simple for software engineer to get a job anywhere in the world, but do take into account pros and cons.
Anyway, to the topic, the way of raising salaries in any sector has always been the same. Form a syndicate, get enough people to join and go on strike (and if you live in EU you are very well covered and protected regarding syndicate activities).
I think this is part of your company's culture, not your society's culture. There are also lots of Dunder-Mifflin type companies in America where nobody has any ambition and everyone just coasts until retirement.
Sure, but if you are a really good engineer in software, someone is going to get "very rich" from your work. Why not (partly) you?
The short answer is that he is replaceable, while the owners are not.
Of course, plenty of people work for themselves, that's the beauty of the free marketplace.
But to assume increasing salaries _is the way to go_ feels like such a capitalist/american viewpoint that it's hard to understand why it's trying to be applicable to Europe too.
I haven't got billionaire status ambitions, but I also don't want my elder years to be effectively dictated by the vicissitudes of the political environment.
This means the number in my wallet and bank account may look smaller, but I still live a rich life with money to spend however I want.
It's the exact opposite of complacency.
You can't count on politics being constant, but "there is a large welfare state here also in 15 years" I consider about as likely as the sun rising tomorrow.
In the UK, at least, I'm not sure this is still true. On retirement, I planning on getting nothing from the government once I get there, and it's looking increasingly likely that I won't be allowed to retire until slightly later in life.
That being said, I have paid off my student loans in less than 10 years of work, so I can't complain about the cost and quality of education.
In the UK ever less is expected of the government. I keep reading "I don't expect a state pension" on the Internet. Of course, some people look at the finances and economic outlook and arrive at that conclusion on their own, but I feel a great many others are being primed for this situation. We just expect to be screwed by our government now and it seems like defeat. :(
A disaster would mean I get perhaps 60 or 70 or 80% if my projected pension - but I’d live ok on that too. I’m not saving nothing personally, it’s just where I live you usually have to invest in a house if you want one. So the situation is you trust either the pension system or the housing market to hold up. If both were to fail I’d have problems.
Very different. I cannot imagine staying anymore more than two years - aren't you bored?
Of course this means that you're actually not doing the exact same thing at the same company all the time. A good company allows for that. Either because you can easily switch projects, switch teams, move up, move sideways etc. Depends on things like company size, structure, culture etc. And yourself obviously.
Lower wages for this amount of security seems a great deal to me.
That everyone should aim to be super stinking rich, or everyone is living in the gutter, but there's no inbetween
Unis are telling people that they can be the next zuckerberg or bezos, instead of telling them that they can earn well enough to have a very comfortable lifestyle for the rest of their lives
In a similar vein, you're describing a lower headline salary buying a comparable standard of living because you aren't paying a mortage-equivalent sum for healthcare and education.
Also if you somehow manage to increase your income, over half of it disappears in taxes and social security contributions.
You still need to save for a pension in almost every European economy, one isn't given to you (state pensions in Europe, even in the UK, are contribution-based). Welfare systems in Europe are not redistributive like in the US, they are typically contributory (you get out what you put in). So there is no sense in which your fundamental needs will be met irregardless of anything else.
I think the issue with the US is that you have a very redistributive political economy, and so many people believe that those elements are the same everywhere AND they could have all the free healthcare...it doesn't really work that way (marginal tax rates on middle-class incomes are above 50% in some European economies, and top rates are usually lower than in the US...try doing that in the US).
But I don’t need to save for their education or anything like that. I don’t save explicitly in their name.
Deleted Comment
So the question is: why are managers, HR, etc. paid so much more than SWE in Europe? They bring less value to the company.
Doctors are paid around a 1/3 of what doctors get in the US
Nurses around half
Lawyers vary, but quick googling suggests it's around half to third
Finance, insurance and real estate pays waaaay less
Store managers at Walmart get about twice as much store managers at Lidl Europe
The skew in upper management pay is even higher
and on and on...
Dead Comment
Others are: having connections that result in value for a company, and having a scarce skill so you can do something valuable for a company. SWE falls under the latter, for the companies that can leverage them highly enough.
With the highest salaries perhaps 20-40% higher than mine and marginal tax 50% making that 10-20%, the prospect is basically, would I switch jobs a few times for that little, when I like my situation?
If the ceiling was higher, I’d switch. It’s a self fulfilling prophecy :)
He /should/ be paid commensurate with the value he produces.
In reality, he is paid the market rate.
I would rather reduce the wages of those richer than SWEs by taxing them more and using that to reduce housing prices, increase wages of health workers and educational staff, and pay for more social programs to get the poor out of their misery.
Optimally, it's my firm belief that we should be working towards UBI to reduce bullshit jobs everywhere. I want people to be able to work on things that matter and things they care about, while living in a place they care about and for without having to constantly sweat about money.
If European SWEs wanted to raise their wages, we would have to unionize and demand a greater share of revenue. Also, we would have to vote for politicians that want to force large companies to pay their fair share in taxes. Google, Amazon, apple and others have a leg up because they can make billions without paying our countries their due taxes.
In a sense you don't, depending on how you count. My gross salary is after the pension is deduced. The gross includes my kids university costs, but they are deduced as taxes so don't show up on the net. An american deduces the kids university costs from his net salary (and there could be more, e.g. pensions).
Comparing pay as a simple number "gross pay" is extremely difficult. Comparing net pay purchasing power or similar after necessary expenses including savings (and kids university) is probably more accurate.
I'd like to know this: if I got 2x the pay in the US, could I instead ask to work 1/2 and get the current pay level I have?
Most likely no, right? So in what way is that higher pay actually helping me pursue passions? I'd be working at least as much as I do now, and most likely more, for that money.
When exactly are those passions supposed to be pursued? When retiring? I'm pursuing that now. I have had 6-8weeks off in summer the last 10 years. I like to travel, etc.
Which country? You should definitely be saving for retirement
Also I don't think I'll want to retire very soon which helps the calculation. Saving durig a 50 year career to live 10-15 years is very different from saving for a 40 year career to be retired 20-25 years. I'm hoping to work to at least 70 or longer and that makes a huge difference too. I some times hear US devs talking about wanting to retire at 55 or 60 - which I'd want too if I didn't have summer off every year!
For reference I make around $70k as a senior type eng. Not huge but the “ceiling” (for cash comp) if I switched jobs 10 times and ended up at a very well paying job in the end would be 20-40% more - which is 10-20% net!
That said, I don't think it's just a matter of culture.
Also just because capitalism likely makes the world better on average, doesn't mean we all have to go ferengi and dedicate our lives to pursuit of maximum profit :D (Perhaps there is a balance)
There is a scarcity of talent here too but in order to take advantage of it you typically have to actively seek higher pay. I just don’t want to switch jobs, it’s not that I don’t want higher pay.
that's what drives down the price. as long as other people are willing to create the same output for less money, you will be paid less
Why?
There's no shame in wanting to work for a company and focus on a work-life balance. Americans (again, traditionally) celebrate(d) those with higher ambitions and achievement. In Silicon Valley and the startup world (many of whom are on HN), the entrepreneur/founder vs. employee issue can be very sensitive.
It works, until it doesn't. In America you can compensate yourself for this risk by simply getting a job where you are paid a higher salary than the average. Then you don't really care what happens with the social safety net, you've already hedged against it by saving and investing for yourself, and possibly becoming very rich.
Personally I'd be stressed if I were in your position. Government welfare isn't some liquid asset. If you decide you want to go live in some other country with a higher standard of living, such as the United States, is your government going to give you $100k or more to go start a life there at the same standard of living you're used to? I doubt it. You'll have to start from scratch, little to no savings, no real credit history, and paying much more for things that were a lot cheaper back in your home country. And if you were to retire in the US, I have a dim view of your future if you have no savings for retirement. If you are already close to retirement and haven't saved anything, you simply will not be able to retire.
Basically you're locked in to your home country, and have no realistic options for leaving unless you become richer. If the country goes to shit, so do you. This is not the case somewhere like America, where how well off you are is decoupled from how the country is doing as a whole. Government risk is eliminated, your cash flow and net worth is all that matters. That's much easier to understand and helps you sleep at night.
Be careful.
United States is the country that's most likely to go to shit. All of us wealthy professionals here are sitting on a powder keg of inequality and delusional politics, and nobody will be decoupled from it when it blows up.
I plan to stay for a few more years, then return to my safe North European home country with a solid stash of savings. My kids can go to good schools where teaching is in their native language. When they get older, they can go to free college if they're willing to put in the effort. When I retire, I won't need to worry about exhausting my savings because I've got a home fully paid and a sufficient baseline is guaranteed from the national pension system. There doesn't seem to by anything that would make me want to stay in America — perhaps the worst place on Earth to retire.
> In America you can compensate yourself for this risk by simply getting a job where you are paid a higher salary than the average.
Oh wow! If I want a more secure life, I'll just get a higher paying job. I didn't think of that before!
If everyone does that then it just drives the average salary up. In other words, the system can't survive unless there's a strata of people at the bottom who are below average and, by your definition, relying on a government that possibly won't help them.
In Europe as most people rely on the government everyone has an incentive to vote for parties that won't fail those people.
I suspect that low European software salaries are just a function of low profitability of European software companies. e.g, spotify is (at best) around $44k per employee, SAP is $41k.
[0] https://fortune.com/2020/08/24/apple-microsoft-facebook-amaz...
In pretty much all of the EU, even in expensive cities like Stockholm or Dublin, if you earn a salary of €100,000, you can live a pretty decent life. Heck even on €50,000, you can do well in a lot of places.
Good luck doing the same in any of the top 10 most expensive cities in the US.
Maybe why US brands tend to get big in the US and then export overseas? US has a homogenous and large market, which brands can make a lot of money in and develop a solid profitable base. That's probably very hard to do in Europe.
So many VC funded projects seem to be aimed at American cultural problems too, exporting the issues they are trying to solve and fighting non American wye to solve those issues.
That's not really true. It's fair to say that a lot of supermarket chains have operations only in a single country, but there are quite a few multi-country brands as well which aren't uncommon.
A few examples: Carrefour, Auchen, Lidl, Audi, Tesco, (Euro/Inter)Spar, Iceland, Rewe - and that doesn't include subsidiaries of the same company (e.g. ICA/Rimi).
The US dominates the software market (mostly for historic reasons but also for its unrivaled entrepreneur/VC/risk-taking management style) which sells it products everywhere in the world, earning much more on that way. And the remaining software products in Europe are acquired one-by-one (e.g. Skype).
Having said all of that: Being a software engineer in Europe is a privilege with a good income situation.
It would be actually very, very interesting to see the PPE information for a more comprehensive set of companies in the US and EU tech sectors.
Or maybe it's me out of the loop and the six figure salaries are the norm in the US even outside the most profitable companies in the world?
Edit: welp, of course the data was linked in the article: https://tipalti.com/profit-per-employee/
Just picking companies randomly a little lower from the list, Qualcomm is 118k, Oracle 81k, Advanced Micro Devices 30k.
Would Facebook have become the Facebook we all know and love today if it had started in Europe? Probably not, because local legislators as well as the public would have said "whoa, we're not doing THAT!" I mean, Belgium outright banned Facebook from collecting data a few years ago, and there are other cases as well.
Companies such as Intel and Microsoft have been repeatedly fined, and it's not hard to see how they would have ben prevented getting in such a position in the first place if they had been started in Europe.
Now, according to some viewpoints profit and size is everything; I've seen this expressed on HN a few times with comments such as "all tech giants are American, Europe is shit", but what this misses is the question if we're really better off with all these tech giants in the first place, because to be honest I'm not so sure that we are. I think quite a few Europeans would see the existence of these companies as a failure of the American system, rather than a success.
So part of the reason is that the US allows for some business practices that would be very difficult (or outright illegal) if a company would be EU-based.
It’s really a function of a willingness to make “big bets” that, when they pay off, pay handsomely.
[0]https://news.ycombinator.com/item?id=25717390
Germany and Scandinavia come in a distant second, with Southern Europe falling significantly behind. The disparity in IT-intensive industries is particularly large.[2]
This is true even when comparing the productivity of workforces within the same market. I.e. European who work for American multinationals tend to be more productive than those who work for local multinationals. The short answer is that American management culture is really world-class. And, I think in software in particular, good management is a major force multiplier in terms of output and execution.
[1] https://www.aeaweb.org/articles?id=10.1257/jep.24.1.203
[2] https://www.aeaweb.org/articles?id=10.1257/aer.102.1.167
The companies are bigger with much larger market share (often a significant fraction of the Earth's population) and benefit from the economies of scale that go with that - it's not like Facebook needs a million times more employees than a tiny web service a fraction of its size - tech work benefits massively from scale.
I'd argue the USA has these large companies for various reasons (the start-up environment with lots of VC money, supportive universities etc.) and dominates Europe because Europe doesn't engage in protectionism.
In Russia and China, where protectionism is much more common, the American tech giants are nowhere near dominant and they have their own local giants with Baidu, Yandex etc.
No one can beat Companies like Google, MS, Amazon.
Even a company like Facebook which basically does nothing useful earns so much money just because it was the social media platform which was early enough and one.
And with Google and similiar companies having the money year over year to hire the best people puts them even further at the edge.
It is not magic to be market leader in a market as young as it.
The value engineers for US companies generate is higher than the value engineers for EU/CAD companies generate, so they have a better bargaining position.
This is probably because US companies have a bigger market to start in, and have been more successful at expanding into other markets (including EU and CAD). The profit of tech companies is constrained by size of market addressed, not number of employees they hire.
https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...
Google and Facebook both have as many contractors as employees: https://www.nytimes.com/2019/05/28/technology/google-temp-wo...
> But the company’s increasing reliance on temps and contractors has some Google employees wondering if management is undermining its carefully crafted culture. As of March, Google worked with roughly 121,000 temps and contractors around the world, compared with 102,000 full-time employees, according to an internal document obtained by The New York Times.
Accounting for those would reduce profit-per-employee to half. Furthermore, those contractors earn a lot less, further boosting the wages for the full-time employees.
That doesn't tell you AT ALL if Europe companies are 'low profitabile' or just 'avg'/'normal' while no one can just comped with the history of SV/SFR.
The real question then becomes: how do other countries cultivate highly-profitable tech companies (similar to the ones in the US)?
Americans want their fair share of the pie, which will always lead to certain people making more and others making less. Compensation is more than just money to us. It's vacation, stock, better healthcare, expanded education resources and benefits, buying programs, etc... This can be both good and bad. I suspect you can find an endless list of rosy and dark examples to draw from. Most Americans would like to think of themselves as quite independent from the government, whether they want to admit it or not.
The value in risk and reward versus security and stability is just different. It's okay that they're different too. Personally, I believe letting people leave the US without monetary penalties so they can pursue cultures that more match their own values is the solution. I once thought that having a system setup so that people could switch places between countries might be beneficial, one that augments the current immigration system.
I don't think this is the right take at all. They way I see it, Americans want to get rich so they have access to the same quality of education / healthcare and leisure time / stability that the average (western) European has by default. Americans fight for scraps.
For instance, look at the list of minimum annual leave by country [1], or countries by infant and under five mortality rate [2], or education rankings [3], or countries by traffic-related death rate [4].
[1]: https://en.wikipedia.org/wiki/List_of_minimum_annual_leave_b... [2]: https://en.wikipedia.org/wiki/List_of_countries_by_infant_an... [3]: https://en.wikipedia.org/wiki/Programme_for_International_St... [4]: https://en.wikipedia.org/wiki/List_of_countries_by_traffic-r...
https://en.wikipedia.org/wiki/List_of_countries_by_tertiary_...
> Personally, I believe letting people leave the US without monetary penalties so they can pursue cultures that more match their own values is the solution.
There are no monetary penalties unless you are both much wealthier than the average person and have substantial unrealized capital gains. The hard part is finding another country that will take you, not leaving.
Not if you only count STEM degrees, then USA is far behind.
https://www.businessinsider.com/most-technological-countries...
I'm not sure why American's don't study STEM, you'd think they wanted to study something that pays off. But maybe it is the other way around, with government funded education they only offer STEM degrees since that is what the government thinks will pay off hence more people study STEM?
I am aware, which is why:
> I once thought that having a system setup so that people could switch places between countries might be beneficial, one that augments the current immigration system.
I've never heard of such an idea before, so I don't know what to call it, but this is the problem it was aimed at solving when I had the idea.
Sorry that's nonsense. Tech remains in Europe generally very well paid compared to national averages, albeit just not stratospherically so like some (not even all) US areas/firms.
I'm sure there are of course still relatively poorly paid tech roles, but tech Europe-wide simply cannot be characterised as too ill paid to build savings!
Do not bet on your money when your government goes down. In the current situation (China raises, switching of federal reserves from the Dollar to a more diverse bucket, a US Capitol invaded), the dollar went down from its 100% safety in the 90s to a shaky 90% currently. And that can spiral quickly when something radical happens (like a coup) and the world stops trusting the US.
Just saying: I do not trust my bank account.
Also, I don't think many people, countries and businesses are going to trust China. They have a bad track record especially in crypto (detaining CEOs, freezing money, etc...). Everybody else is too small to matter (ie: New Zealand, Emirates, etc...).
I managed to save about €10k/year on a €42k/year salary (and I was being woefully underpaid even by European standards for what I do, but that's a different story, I should have earned at least 60k, but ah well) which I used to fund my business.
Maybe you can save more in the US – I don't know – but you can save plenty of money on tech salaries in Europe.
Deleted Comment
It's the same in the US, take for example Trump that fought the Chinese to bring more work back home. Another president can create the opposite flow of jobs.
How many people lost heir jobs and homes during the Financial crisis of 2007–2008 ?
Theres an interesting sort of recursion where companies compete with others slightly earlier and slightly later than them, where the more mature company promises less risk (in the form of cash and equity $ value as of the last round raise) compared to the less mature company. This means that e.g. Stripe must offer comparable or higher salaries than a series B or C company, and slightly “less” equity compared to the less mature companies more risky but higher potential equity. So the salary floor is driven by very early upstarts, and companies are pressured as they mature to increase that floor or employees leave to other companies with the same salary but less equity risk.
So, 2 things: early companies must be able to grow (so their equity over the long term outpaces or matches larger companies) and early companies must be able to pay something close to reasonable salary (in SV this is usually ~70% salary of top of market, so 90k from a seed startup vs 130k from a FAANG). Basically, more companies need to be started and access to initial investment is a huge part of that.
* Substantially more actual vacation time
* Substantially cheaper and yet similar health, dental, and vision coverage
* Less risk/stress associated with job security
* A very similar job market
I don't imagine this is the same in every country in the EU, just as technical job markets are different in the US. But working in the US Tech Sector isn't the panacea of work related issues.
This depends on the company, last startup I worked at gave me around 6 weeks of vacation per year not counting holidays. Of course I got paid less than FAANG but still better than Europe even without the equity.
>* Substantially cheaper and yet similar health, dental, and vision coverage
I have heard a lot of people in Europe (UK and Germany) complain about issues with getting health coverage for non life threatening issues unless they also had private insurance. No idea how many companies pay for that in Europe.
>* Less risk/stress associated with job security
My bank account is my job security. I don't think I ever was worried about job loss after a few years of building up savings.
The experience my friends have in the EU seems to be pretty good over all with healthcare. The US healthcare system give fantastic results at a phenomenal and often strange price. It's a trade-off I'm sure.
I agree that having savings helps. And I have quite a bit of savings. But I still wouldn't feel comfortable being laid off .
Over all I'm here in the US and I love it. But I'm pointing out that there is give and take to everywhere.
Also everyone keeps talking about working for FAANG but.... The vast majority of US engineers don't work for them.
Getting 6 weeks of vacation instead of 3? I’d still rather take the extra $150k. Having to shell out $15k for healthcare each year? I’d still take the extra $150k.
I paid $8400 in insurance premiums for my insurance. I also added $5200 in pretax to my HSA account which I used.
I paid about 30% to taxes.
I'm not complaining. I'd just like to point out that my high salary (which is not > $200,000) comes with some costs.
Care to elaborate? Especially the part about vacation. Do you mean that US developers will retire early than their European counterparts because they are earning more in average and by doing so will enjoy more free time? I'd rather prefer to enjoy my free time when I'm in my 20s and 30s than when I'm in my 40s, 50s, etc.
The part about the health coverage: well, that's the thing, you never know if you'll deal with expensive or rare illness... so the European way of health coverage is worth it.
I recall the React creator's base salary is 100k/year in London, and he works at Facebook.
This often makes these companies more agile (the cycle times for requirements and feedback are shorter) and seems to make the business more willing to pay for engineering talent generally (as the decision makers see the value or are former engineers themselves.)
This is easier in some industries than others - consumer internet and commercial software companies will tend to organize more like this then health care, for example.
So I guess my answer would be ensure your software engineers aren't just doing software, but helping define the businesses
This isn't universal, there are startups here that "get it". But it's ubiquitous in large companies that have money, and that drives the salary market.
It seems inevitable that this will change in time either by the old guard catching up or new companies displacing them. I think one of the key driving forces behind this could be the return home of people with experience from SV style companies. As they join companies or start their own they are likely to advocate for approaches that more strongly couple the organization to its technology.
In the Canadian startup circles I once inhabited this was a broadly accepted idea. Seeing people move to the US for high paying tech jobs was generally celebrated, because there was an expectation that many of them would eventually return and be a boost to the overall ecosystem.
I previously worked for a large consulting firm and in the Australian side the software arm was seen as 'just another billable unit' even though we built software primarily for internal engineers to use, this has some nasty side-effects (wasted time/money on busywork, inability to do useful work without 'proving usefulness' first).
The London arm was much more of a 'startup' focus, billing time was second to doing good work and delighting clients (internal or not).
I'm now at a London startup that 'gets it' and when I inevitably move back to Australia I'll be taking these learnings back with me and hopefully be Senior enough to try and encourage change in whichever company I end up in (assuming it is needed).
Not an easy feat. Most would be reliant on the H1B program.
The only jobs filled by locals were those which had artificial cap on employee numbers and local regulations(accountants/legal)
Whilst some of these engineers were A+ level brilliant, most were mediocre and doing jobs that could easily be done by local talent.
The benefits for companies doing this? - immigration visa tied to job and ability to lowball salary (as residence in host country was itself a major plus) thus ensuring salaries rose way slower than demand would otherwise have made them.
The one off cost of Visa is nothing compared to the money those companies saved.
I think most people are mediocore, and doing mediocore jovs -thats ok
Keep in mind that this allowed some compabies to afford half-decent engineers whereas they would nornally only be able to afford junior talent. Whether that works out to a net benefit is ofcourse debatable.
I personally find that a lot on management of engineers in UK is shockingly inefficient. I dont kniw what its like elsewhere, but i recon average 'efficiency' is under 50%