Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Ask HN: Why do companies outside the US pay so much less?

news.ycombinator.com

Post reply on HN
Print view View original

71–80 of 225 posts

Re: Ask HN: Why do companies outside the US pay so much less?

#71

Post by brightsize »

rev_bird wrote: post #62
schmichael wrote: post #33

I'm in the US and a friend just moved to The Netherlands to accept a much lower paying job. He swears he has more disposable income due to cheaper health care, Internet, transportation (no car required!), etc. The basic assertion being that the cost of living is higher in the US. I would love to see salary vs cost-of-living comparisons globally. I suspect this might account for the disparity, but I'm afraid I don't h…

Is/was your friend an American citizen? I've been fascinated by emigrating to Europe for a long time and am always looking for stories about how people pull it off.

Same here. This might be one route to consider: https://en.wikipedia.org/wiki/DAFT

Re: Ask HN: Why do companies outside the US pay so much less?

#72

Post by kat »

YZF wrote: post #53
kat wrote: post #22

As someone with Canadian and American work experience, I think US wages are higher because there is more capital in the States. Both Canada and the States struggle to find qualified software devs. The companies that can afford to pay more, get their pick of devs out of a very small pool, so the wages increase. However, in Canada, the companies won't/can't pay as much, so the devs end up making less, or moving south.…

The Canadian dollar went from ~parity to It's a lot of the same companies, e.g. Google, Microsoft, Amazon, so I don't think we can say the can't pay as much. Other than that it's market forces.

If you're living in Canada on a savings account that is in USD, then yes, you're ahead by 30%. Otherwise you're making cdn dollars and spending cdn dollars, so you don't see the 30% difference in cost of living.

And as far as I know the big companies like Google, Microsoft, Amazon, do pay more than market salary in Canada. Their Canadian offices are not nearly as large though, they don't influence the wages/benefits culture as much as they do in the States.

Re: Ask HN: Why do companies outside the US pay so much less?

#74

Post by jrmurad »

Everyone throwing around "free" healthcare as a valid explanation for this wage gap needs to account for taxation levels too.

using estimates via Google:

"average programmer salary usa" -> $84,360

"average programmer salary in sweden" -> $54,264

According to http://www.economist.com/blogs/graphicdetail/2012/10/focus-4, average effective taxes in the USA (including social security) are 25%... but 35% in Sweden. Even if those particular numbers are off, the point is that higher taxes may further expand the gap with lower pre-tax foreign salaries.

So the Swede keeps $35k and gets state-sponsored healthcare. The American keeps $63k and probably has decent health coverage from his employer. I'm not sure about this but I suspect that the American can use a fraction of that $28,000 difference to upgrade the health insurance to Swedish levels or better.

(There are also smaller but still significant expenses like housing, affected by property taxes, and consumption taxes like New York City's 8.875% relatively-high-for-the-USA sales tax vs Sweden's 25% VAT.)

Re: Ask HN: Why do companies outside the US pay so much less?

#75

Post by vikascoder »

sigi45 wrote: post #55

I don't really care how much someone in USA earns. As a software engineere in germany you are earning good money. There are no killings in cities, affordable health care, high quality living standards, university costs 150$ for 6 month, no donald trump, 30 days real holiday (i take them, everyone does, every year), seldom over hours, parental leave. Btw. IT is more than google, apple, facebook and twitter. And no we…

All great points. Just to put in the "con" perspective: 1. It's good money, not insanely great money for software engineering field. You can not hope to earn 200k USD as a senior engineer ever and hence even a few folks from Germany seem pretty keen to have a 4-5 year stint in the US to earn some quick bucks. (also the exchange rate nowadays is killing it for Euro). You can see the effect in terms of how much you percentage of your salary you pay as rent and from my personal experience it was a lot (close to 30-40% of your entire paycheck, some germans in not so blessed fields pay almost 50%). The social security aspects covers for it as far as you enjoy it. 2. Jobs are secure as soon as you sign a permanent contract and get over the "Probzeit" period and there are seldom any "at-will" employment contracts. The flipside? startup culture never really kicked off until recently, hiring is slow and firing is even slower(harder) leading to plenty of dead-beat employees hanging around in corner offices in some organizations. You have copy-cat IT companies like Rocket Internet whose sole business model is to copy ideas from the US and implement them in Europe. So the variety of jobs are definitely not more than what the US provides. 3. As a result, the general lifestyle is living "frugally". If you like that it's fantastic. But everything is comparatively "expensive" than the US apart from certain things like Beer. e.g. Branded clothes like Timberland, Levis etc are sold at a premium where you can get those for 40 bucks in an outlet mall in the US. So buy IKEA/H&M/C&A with your software salary.

You do have countries where salaries are high like Switzerland but you also have insanely high living costs.

Re: Ask HN: Why do companies outside the US pay so much less?

#76

Post by mallipeddi »

It's simply due to the competitive hiring environment for the best software engineers in USA. The difference in pay cannot merely be explained simply by the difference in cost of living. I have personally worked in Singapore as a software engineer before moving to USA (worked for companies in SF & Seattle). A very good senior software engineer in SG might make SGD100-120k/yr with 10 years of experience. Singapore is a world-class city but it's also a very expensive place to live. In USA, the same engineer could be making USD400-500k/yr with 10 years of experience provided they work for top-tier companies like Google/FB/Apple/Amazon. These numbers obviously include stock-based compensation. The key is to be in the 95th percentile - I think the difference in pay (between USA vs world) is less drastic if you are just in the 50th percentile.

Re: Ask HN: Why do companies outside the US pay so much less?

#77

Post by sremani »

sigi45 wrote: post #55

I don't really care how much someone in USA earns. As a software engineere in germany you are earning good money. There are no killings in cities, affordable health care, high quality living standards, university costs 150$ for 6 month, no donald trump, 30 days real holiday (i take them, everyone does, every year), seldom over hours, parental leave. Btw. IT is more than google, apple, facebook and twitter. And no we…

>> university costs 150$ for 6 month.

This is not a German miracle, its simple demographics, most of the Germans are in their productive years of 40s and 50s and their population in teens and 20s is tiny, so their investments are low even though at per-capita level they look tremendous. This is the reason why Germany's hope is automation. They are demographically not in a great place. of course, this will come home to roost in 20 years or so.

[edit] Demographics link: http://www.indexmundi.com/germany/age_structure.html

Re: Ask HN: Why do companies outside the US pay so much less?

#78

Post by djrogers »

thehardsphere wrote: post #63
ThrustVectoring wrote: post #24

I suspect a partial cause from right-to-work laws. It's much harder to fire an employee in Europe, so companies are less willing to bid on employees, and so compensation is lower. Plus the employees themselves value the job security, which substitutes for wages when evaluating offers. For specific predictions from this model: 1. Public-sector programmers in general should get paid less than private-sector programmers…

California, Massachusetts, New York, and Washington do not have right-to-work laws, yet software salaries in SF, Boston, New York, and Seattle are among the highest in the world. If that were the cause, Austin, TX should become the high-pay Mecca that every programmer would migrate to, because Texas is a right-to-work state.

You're supporting the GP's thesis - he's saying that right-to-work laws depress wages...

Re: Ask HN: Why do companies outside the US pay so much less?

#79

Post by walshemj »

sigi45 wrote: post #55

I don't really care how much someone in USA earns. As a software engineere in germany you are earning good money. There are no killings in cities, affordable health care, high quality living standards, university costs 150$ for 6 month, no donald trump, 30 days real holiday (i take them, everyone does, every year), seldom over hours, parental leave. Btw. IT is more than google, apple, facebook and twitter. And no we…

But how does this compare to other professions say a lawyer or a medical doctor with the same experience.

I suspect in Europe and the UK in particular engineering is seen as a lower status profession - may be less so in Germany

Re: Ask HN: Why do companies outside the US pay so much less?

#80

Post by djrogers »

madarco wrote: post #65

The main reason seems to be linked to the cost of living: salaries in EU are lower only numerically. 50K€ have the same purchasing power of 150k$ in SF (EU devs pay rent, a car, savings, have holidays, etc.) However the really STRANGE thing is that only a few USA companies exploit that by hiring EU devs for remote working. (ie: paying only 30% of a USA salary for an almost as good developer)

> 50K€ have the same purchasing power of 150k$ in SF

You can't compare the entire EU to one of the most expensive cities in the world - in spite of what the media may have you believe, most people in the US don't live in San Francisco or New York.

Post reply on HN