Since salaries are so much lower everywhere but the US, doesn't it make more sense to flip this argument around and instead ask: "why are software engineers' salaries so much higher in the US than everywhere else?"
Ask HN: Why do companies outside the US pay so much less?
11–20 of 225 posts
Re: Ask HN: Why do companies outside the US pay so much less?
#12The cost of life is lower. Healthcare is included in taxes.
The cost of life argument makes no sense. By this logic we should be seeing janitors, or translators, or piano teachers in SV being paid much, much more then they are. If there was a coal mine near San Francisco I suppose the miners would be paid 100k/year as well?
Glassdoor says that a janitorial salary has a national average of $21,060; compared with $31,200 in San Francisco & San Jose CA; and $24,000 in Wichita KS.
Sounds like Janitors are being paid more in SV.
Re: Ask HN: Why do companies outside the US pay so much less?
#13A lot of it is cost of living in a given area can vary a lot in the US. Also, if you're looking for an EU job, that may well be post-tax, include better medical benefits (US contract jobs often don't), not to mention potentially better retirement options and last, but definitely not least upwards of 8-weeks of pto/year.
A lot of US jobs, you're lucky to see even 2 weeks of PTO, and even then, if contracting, you don't see that. I wound up taking about a month and a half off due to a bad relocation/project cut experience last year, and that has a huge impact on your hourly/annual salary. The culture is just different and the tax models very different.
In the US variety in income taxes at the state level, or cost of housing can vary a lot and you'll see similar variance in IT/Developer pay as well.
Re: Ask HN: Why do companies outside the US pay so much less?
#14If you're comparing to European jobs, one factor is that the U.S. has higher income inequality then many other countries, which means generally the highly paid jobs pay more, and the poorly paid jobs pay less. This will make U.S. salaries look good in some areas, and bad in others. (The median U.S. salary is also a bit higher than most other countries, but not by enough to explain the differences seen specifically in…
Uhhhhhhhh income inequality does not have that kind of effect. Income inequality may effect the taxes paid by people, but it doesn't change salaries the way that you're suggesting.
America just has more highly paid jobs, because we've got some of the biggest companies and highest GDP per capita in the world. And this has the effect of creating a greater spread of income. It's a bigger, richer, pond.
Re: Ask HN: Why do companies outside the US pay so much less?
#15If you're comparing to European jobs, one factor is that the U.S. has higher income inequality then many other countries, which means generally the highly paid jobs pay more, and the poorly paid jobs pay less. This will make U.S. salaries look good in some areas, and bad in others. (The median U.S. salary is also a bit higher than most other countries, but not by enough to explain the differences seen specifically in…
This actually. It's not that the other countries are paying less, the US companies pay more. In Europe other kind of engineers (mechanical, electrical etc) are pretty much earning salaries at par with software engineers. And then further on the typically lower wage salary bracket... Where the salaries in the US would require keeping 2 jobs, in Europe is good enough to get by.
Re: Ask HN: Why do companies outside the US pay so much less?
#16Supply and demand?
I think there's a large variance in the US as well between different geographical areas. I would expect you can find x2 differences even within one geography.
There are a lot of factors in play:
- In SV there's a lot of "easy" money and a shortage of people.
- There's a lot of friction preventing this from equalizing. Immigration policies being one example.
- There have been significant currency movements over the last couple of years and those take some time to reflect back to things like prices and salaries. The strength of the US dollar means that at least temporarily you make that much more if you work in the US.
- Cost of living. If you have to pay more to own a house, pay for your kids education, commute, health, etc. then you can expect upwards pressure on salaries to make up for that.
- Risk premiums.
I think it's important to realize that these things can take a while to play out. When I look at today's salaries compared to 10 or 20 years ago I don't actually think they're very high but that's against a backdrop of erosion in other middle class salaries. Time will tell.
Re: Ask HN: Why do companies outside the US pay so much less?
#17Don't underestimate the impact of social norms. If I were looking for work in the USA, I'd expect a salary which I would feel very uncomfortable asking for in Canada.
Re: Ask HN: Why do companies outside the US pay so much less?
#18I haven't heard anyone suggest that overall demand for developers is higher in the USA.
The US has more companies that can see how to make more money off tech talent.
Re: Ask HN: Why do companies outside the US pay so much less?
#19The cost of life is lower. Healthcare is included in taxes.
The cost of life argument makes no sense. By this logic we should be seeing janitors, or translators, or piano teachers in SV being paid much, much more then they are. If there was a coal mine near San Francisco I suppose the miners would be paid 100k/year as well?
Since the average starting salary of a coal miner is $60-70k in the rural geographies where coal is mined, I'd say that yes, a coal mine in San Francisco would likely pay $100k.
Re: Ask HN: Why do companies outside the US pay so much less?
#20If I were to make USD 200K/year as a Software Engineer in Bangladesh, I'd probably be richer than the CEO of that company.
I believe you're referring to the ration salary/cost_of_living rather than comparing difference currencies, countries, politics, taxes, etc. In this case, I'd say that the ration is fairly even, minus stocks/bonuses. The base salary puts you in a similar spot in terms of buying power in your respective country if you're a software engineer. That's the beauty of this job... you can work anywhere in the world and maintain roughly the "same" buying power.