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Ask HN: Why is pay so much higher in the US? (or is it?)

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Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#61

Post by dagw »

First look at the top N tech (and tech adjacent) companies in the US and work out their revenue pr employee. Now do the same for Europe and Korea.

Second, look at how much VC money is invested into tech companies each year in the US, and compare that with Europe and Korea.

A lot of US companies simply have a lot more money sloshing about, and as such can afford to pay a lot more money to attract talent, driving up the price for the whole market.

So the real question is, why are European and Korean companies so bad at attracting investments and making money.

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#62

Post by [deleted] »

ChuckNorris89 wrote: post #51
gigatexal wrote: post #12

Earlier quoted context omitted.

Haha pay is higher in the US because, sure, it's the world's largest economy. Though there are more millionares being minted in China than in the US every year. Nevertheless I'd sure as shit not want to build my business in China. I used to think this was because of relatively higher taxes in the EU than in the US but at the top end the highest wage earners are taxed rather heavily. A 500k salary is not 500k takehome…

>I find the EU (Germany in particular), is hurting for talent enough that my mediocre skills (working on skilling up) are in demand and I'm relatively well paid >80k eur/yr Can I ask where in Germany?

[deleted]

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#63

Post by chrisseaton »

ivolimmen wrote: post #50
chrisseaton wrote: post #40

Earlier quoted context omitted.

> They have a 401K. What would you prefer? Defined-benefits, dependent on your company managing your pension? Most people would rather it was independent and invested.

Well I am kind of unique and have a pension that is paid by my employer, and I have a personal pension (sort of a 401K). Do keep in mind that pension fund in the Netherlands are really well guarded (loads of laws). An employer or intermediary could never withdraw anything (neither can you unless you are at pension age).

What happens in 20 years if the company hasn’t invested enough to pay your pension? A big downside of corporate pensions is when they fall short. For example British Airways has like a 3 billion deficit. I bet they wish they just got their money invested by a third party instead!

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#64

Post by phphphphp »

spacejogger wrote: post #45
phphphphp wrote: post #13

Earlier quoted context omitted.

Find a job with a US company that has a UK presence (a multinational like Google, Facebook etc.) and get promoted enough (e.g: to Engineering Manager) to be eligible for an L1 visa, then request to transfer from the UK to the US. The L1 visa process is the easiest, and has a path to citizenship. https://www.nnuimmigration.com/l1-visa-to-green-card/ (UK salaries are competitive enough nowadays that it's not really wor…

How are UK salaries competitive? Even in London, salaries are, at best, 50% of what they are in Silicon Valley for 'typical' companies. At FAANG companies (e.g.: the Google/FB/etc London offices), they are about 70% of what they are in Silicon Valley. Cost of living is higher in SV, but not that much higher.

I believe that 70% is very, very competitive — I’d go as far as to say 70% of an SF salary, in London, is better. There’s a bunch of considerations, not just the cost of living, but things like healthcare, which allow for a high-earner to better leverage their earnings to improve their quality of life.

There’s a higher density of well-funded companies in the US who can afford to pay high salaries, so it’s easier to find a high salary, but if you find a well-funded company in the UK (of which there are many, and growing) then you can earn comparably high amounts.

If you have a £150k salary in the UK — which is easy enough at Google, Facebook etc. — you will have a very high standard of living, so much so, that moving to the US to earn $300k/year at the same company would have very little impact on quality of life.

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#65

Post by dna_polymerase »

Scoundreller wrote: post #47
blackhaz wrote: post #39

Earlier quoted context omitted.

I live in London. Developed a persistent headache which goes on for a few months already. Just got appointment to a neurologist for August 2023. Today is September 2022. Although, is UK in Europe?...

No longer, because 350 million pounds a week was being diverted from the NHS into Brussels.

According to a big red bus.

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#66

Post by ivolimmen »

chrisseaton wrote: post #63
ivolimmen wrote: post #50

Earlier quoted context omitted.

Well I am kind of unique and have a pension that is paid by my employer, and I have a personal pension (sort of a 401K). Do keep in mind that pension fund in the Netherlands are really well guarded (loads of laws). An employer or intermediary could never withdraw anything (neither can you unless you are at pension age).

What happens in 20 years if the company hasn’t invested enough to pay your pension? A big downside of corporate pensions is when they fall short. For example British Airways has like a 3 billion deficit. I bet they wish they just got their money invested by a third party instead!

They have a payment obligation. Required by pension law. Employers are kept up to date by their pension funds (are required by law). Employers are always kept in the loop how their pension is doing and are offered the ability to add to it. There is even a limit into what you can add to it. We also have a pension that is paid by the government. So in the end you get a sum: monthly income = government pension + company pension + personal pension (if you want one)

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#67

Post by kf7njh »

As an American living in Germany for a few years now, this is something I really struggle with.

In short, it's because Europeans are content with lower wages.

I am in a "high-demand" job as an electrical engineer at a publicly traded medical company, and getting less than €65k. This is absolutely absurd in my opinion, but in discussions with friends/colleagues they feel it's overall typical.

One colleague was in shock when I said I expect to break €100k within the next few years (Sr level)... But was also completely unaware of any basic public company financials (average value of employee is ~$350k), or salaries in our USA office (~$160k).

Unfortunately, my value is not related to anything other than my cost of replacement--since my neighbor thinks €65k is acceptable, that's what I get.

Company performance, employee benefits, healthcare, taxes, etc do play a role.... But it's nowhere near the salary gap.

Help me spread the word OP. Tell all your friends. Start demanding more. Mercedes recently announced all employees would get raises matching inflation. It's a good start but honestly we need to recognize this as the bare minimum, not like they are heroic and progressive.

Ps: Hope nobody minds me dropping numbers. I have no insecurities and don't care, but believe it can be a good help for the discussion.

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#68

Post by whiddershins »

cheschire wrote: post #43
lucumo wrote: post #41

Earlier quoted context omitted.

That's wealth though. OP is asking about income.

Yes, so isn’t it interesting that all that high income isn’t translating into high median wealth?

not remotely interesting. Software developers aren't median, why would you expect them to move the median?

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#69

Post by chrisseaton »

ivolimmen wrote: post #66
chrisseaton wrote: post #63

Earlier quoted context omitted.

What happens in 20 years if the company hasn’t invested enough to pay your pension? A big downside of corporate pensions is when they fall short. For example British Airways has like a 3 billion deficit. I bet they wish they just got their money invested by a third party instead!

They have a payment obligation. Required by pension law. Employers are kept up to date by their pension funds (are required by law). Employers are always kept in the loop how their pension is doing and are offered the ability to add to it. There is even a limit into what you can add to it. We also have a pension that is paid by the government. So in the end you get a sum: monthly income = government pension + company…

> They have a payment obligation.

How can you obligate someone to pay in enough to cover inflation, at an unknown level?

Everyone at the time thought BA would be able to cover their pensions - but you can’t predict these things for certain.

Re: Ask HN: Why is pay so much higher in the US? (or is it?)

#70

Post by whiddershins »

phphphphp wrote: post #64
spacejogger wrote: post #45

Earlier quoted context omitted.

How are UK salaries competitive? Even in London, salaries are, at best, 50% of what they are in Silicon Valley for 'typical' companies. At FAANG companies (e.g.: the Google/FB/etc London offices), they are about 70% of what they are in Silicon Valley. Cost of living is higher in SV, but not that much higher.

I believe that 70% is very, very competitive — I’d go as far as to say 70% of an SF salary, in London, is better. There’s a bunch of considerations, not just the cost of living, but things like healthcare, which allow for a high-earner to better leverage their earnings to improve their quality of life. There’s a higher density of well-funded companies in the US who can afford to pay high salaries, so it’s easier to f…

You know this firsthand?
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