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

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

#91

Post by xiphias »

CamMacFarlane wrote: post #25
civilian wrote: post #14

Earlier quoted context omitted.

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.

>[USA] has the highest GDP per capita in the world Not quite, it has the 18th highest. Below Hong Kong, Switzerland, and Ireland all who pay less for engineering. https://www.cia.gov/library/publications/the-world-factbook/...

This is not true... Google Switzerland pays more than in US (actually more, than anywhere else), especially if you take taxation and the pension system into account.

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

#92

Post by ted_dunning »

jrmurad wrote: post #74

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…

The averages don't work well when you divide. You need to look to medians for the income and then compute average tax rate forthat* income.

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

#93

Post by tedmiston »

Five things:

1. We are taxed on income heavily in the US.

2. Insurance is expensive here.

3. In the hubs, rent is very expensive.

Take-home pay after considering these three things is a lot less than you might think. And also:

4. Generalizing the salary of positions across the whole US is misleading. An average engineering job in the midwest or outside of a hub can pay half the salary of SF or NYC.

5. It really depends (1) where the company you're considering is based and (2) if it's a remote gig, whether they adjust your comp based on your location. One example of this is Buffer's extremely transparent salary calculator [1].

The holy grail is to geoarbitrage by getting paid by a company in a location that pays highly while living remotely somewhere the cost of living is much lower.

[1]: https://buffer.com/salary

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

#94

Post by ThrustVectoring »

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.

Yeah, I meant the laws that say that your boss can just show up and fire you for any or no reason, which is at-will employment. Got the name wrong, embarrassingly.

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

#96

Post by bjourne »

jrmurad wrote: post #74

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…

Your number for Sweden is (sadly :)) incorrect. This site (http://www.lonestatistik.se/loner.asp/yrke/Systemutvecklare-...) puts the median at 396,000 kr -> $44,800. But unless the site adjusts for salary increases, the estimate is probably on the lower side.

Salary also depends on your title. So web developers earn less than system developers who in turn earn less than system architects even though they may all do essentially the same work.

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

#97

Post by Daishiman »

acchow wrote: post #81
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…

TBH, when making $250k+ as many engineers in top bay area companies are, "standard of living" costs don't really affect you that much anymore... They don't take into account the luxuries of the exorbitant lifestyle you can afford. And there aren't really any other cities in the world you could move to where you can still just be a programmer and afford the same lifestyle (and still have a lot of money saved up every…

Realistically it's not a terribly relevant point for most engineers, even on the Bay Area.

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

#98

Post by JBReefer »

rb808 wrote: post #52
FennNaten wrote: post #51

Hum, I don't know how the system works in the US, but in France a lot of money is taken from the salary to cover for health insurance, unemployment insurance and retirement plan. Plus we have 5 weeks paid vacation automatically included. And I think cost of life is lower than in the US, even in Paris which is the more expensive area. To go with numbers, I currently earn 50k€ per year (gross), which makes for 3k€ per…

In NYC a decent 2 bed apartment in second tier areas (ie not in Manhattan) is 3k€ a month, I'm surprised Paris is cheaper.

Definitely not, my rent is much less than that and I'm 10 minutes from the city in a nice part of Queens.

Hip areas are expensive, but say, Staten Island is cheap af.

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

#99

Post by nasalgoat »

omouse wrote: post #32
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.…

There is more free floating capital . There are VCs in the US who are willing to invest in all sorts of things and willing to take chances. There are few VCs or banks in Canada that would take a chance on Facebook, Twitter, SnapChat or Uber. Brain-drain is a problem but the bigger problem is lack of capital. Also, its in the employers best interest to keep salaries down and convince their employees that living in Can…

Raising money for an internet startup in Canada is effectively impossible. You might get some minor Series A angel investors (dentists and vets are your best bet), but once you start getting into the Series B rounds where you need real money, you won't find anyone willing to risk it. All they're interested in is gas/oil/mining.

Very risk adverse. We've had to resort to roadshows down in California and New York to try and get US capital.

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

#100

Post by cylinder »

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…

I agree. People stop reducing your life to dollars (or €).

That said, I think the USD is propped up in ways that others are not due to its status in the world. They'd an advantage for some, certainly. And Euro is weakened by rest of EU, if Germany were standalone their currency would be higher than now.

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