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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?)

#91

Post by pwinnski »

gnz11 wrote: post #17
trinovantes wrote: post #3

I think it's mostly culture. Compared to other regions, US favors innovation/risk taking and sees software developers as value creators rather than cost centers. There's also the fact that USD is the global reserve currency which makes it much easier to raise capital.

Unless you are at a FAANG or similar company, programmers in the US are still seen as cost centers by c-suite people.

There are software companies outside of FAANG, and programmers at software companies, by and large, are seen as more essential that "just" cost centers.

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

#92

Post by viraptor »

whiddershins wrote: post #87
viraptor wrote: post #81

Earlier quoted context omitted.

Yes, I'm sure there's non-zero amount of people who get lots of benefits. And you're likely aware how lucky you are. The point was: it's not common and not required at state/federal level.

But the question was literally about remote development work. Unclear why so many people decided to use it to make random criticisms of the US. Or perhaps it is very clear why.

Remote is an overloaded term. I assumed "work from home in proximity of work in the us". If the OP meant US remote from Korea, that's different, but then we're also likely talking about contracting rather than employment.

> to make random criticisms of the US

It's not criticism, it's comparisons that matter to your enjoyment / impact the total compensation.

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

#93

Post by molotovh »

whiddershins wrote: post #55
sixhobbits wrote: post #14

Compared to Europe there is more upside and downside risk in the US. You can earn more but you are more likely to be financially wiped out if you get cancer or have an accident (high medical costs). Most countries in Europe have more social support built in at every level, not just healthcare, so its unusual to go from living comfortably to being on the street. Some argue the US way is good (more downward mobility is…

No, if you have health insurance this isn't true. None of this is how it actually is in the US. Outside of addicts and the severely mentally ill it is rare to "fall off" middle class status.

And for the kind of jobs we're talking about (outside of maybe start-ups that haven't got benefits figured out quite yet), the commercial insurance offered by employers tends to be quite good. As a personal anecdote, my wife has a union job and I do not. She switched to my healthcare insurance because the benefits were better than what the union offered. (In a pure analysis, my job is technically less secure, but realistically I am in no danger of losing it. When correctly managed, increased risks yield increased rewards.)

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

#94

Post by bpfrh »

refurb wrote: post #80
bpfrh wrote: post #23

I would say it is because of less social security. In my country your pay will be significantly lower, but we get "free" healthcare are insured against unemployment&unable to work because of injury/sicknes, have a pension and have various social programms, etc.

It's not like the US doesn't have that, or at least California. During Covid my friend got $4,000USD per month in unemployment for over a year. A relative of another friend immigrated from SE Asia and signed up for Medicaid when she arrived. Pretty much free healthcare. If you get injured, you can qualify for SSI payments and healthcare. I mean, we have a "crisis" right now because of all the disable men who no longe…

I would argue that covid was a special occasion, or is that always the case?

Afaik medicare only allows you to be insured if your income is less than X?

I don't know how your SSI payment structure compares to the one in my country, but isn't there a big problem with healthcare and the things and doctors it covers?

I don't think the US has no safety net, but I think on average it has a worse one than my country.

If you compare Europe as a whole I don't know, as Europe is very diverse in how they handle social care issues.

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

#96

Post by kf7njh »

olabyne wrote: post #88
kf7njh wrote: post #67

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 shoc…

Hey french here. You are speaking of raw income, right? I don't think we are content with lower wages. It's just that you cannot really compare EU-US just like that. You need to compare cost of living, entirely. Paid leave. Public holiday. College fees. Working time. But also what I call 'peace of mind'. In Europe, you have retirement from the state. You will never have crazy, 6 figures hospital bills. My employer fi…

Exactly, gross salary.

It's true you can't really compare directly like that, but just as an example let's normalize the data on the point of vacation/holidays. EU: 52 wk / yr * 5 day / wk = 260 days / yr 35 holiday / yr = 225 working / yr 260 / 225 * 65 = 75.1k per year normalized

vs USA: 10 holiday / yr = 250 days / yr 260 / 250 * 160 = 166.4k per year normalized

Here we can see how even when considering something like holiday: the difference is still not even remotely close.

You're absolutely right about the 'peace of mind' aspect. This is something that I really love and will definitely miss... But let's not fool ourselves. For example it's common knowledge in Germany that the state retirement will only cover about 50% the cost of living. Not sure about the situation in France, but this means I still need to do a huge amount of self-saving and investing just to live at the bare minimum.

In the end I completely hear your argument and can understand it.... It's just everything in life is pretty gray and situational.

Note: if anything I have said is wrong, definitely let me know! Nobody is perfect!

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

#97

Post by Dracophoenix »

abofh wrote: post #48
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…

So, I'll be honest, taxes in the EU are (at the basic levels) near what they are in the US - top-line last-dollar percentage wise anyhow. But in the US there's a massive cottage industry in creating and managing deductions. I'm currently abroad, so while I'm subject to US taxes, the FEIE allows the first 112k to be deducted from income tax (not SS, so not everything but the bulk of it), and while I still expect to to…

Which digital nomad programs have used? Any that you currently recommend?

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

#98

Post by abofh »

Dracophoenix wrote: post #97
abofh wrote: post #48

Earlier quoted context omitted.

So, I'll be honest, taxes in the EU are (at the basic levels) near what they are in the US - top-line last-dollar percentage wise anyhow. But in the US there's a massive cottage industry in creating and managing deductions. I'm currently abroad, so while I'm subject to US taxes, the FEIE allows the first 112k to be deducted from income tax (not SS, so not everything but the bulk of it), and while I still expect to to…

Which digital nomad programs have used? Any that you currently recommend?

I'm a big fan of Croatia myself, but their program is one year, not renewable without a break (and starting next year, a full Schengen break), but it'll depend a lot on the lifestyle you want. I want cheap, beaches and quiet at least outside of the tourist season. I've heard good things about Portugals, but no direct experience. Montenegro has announced a two year one that's renewable once that I may give a trial when my current Croatia one runs out, but it's brand new and the government websites are currently under a bit of a DoS so getting details is harder. Germany could be good if you like it there, I think Italy just announced one, and if you're more into the Nordic scene, I think Norway has one.

But I'm primarily in the EU because my partner is here, you can find them in a number of other countries, depending on the lifestyle and culture you want to spend time in. Not all of them are tax free, but most of them are.

Do some googling, there's always an expat services organization that will offer overpriced consulting (but you may still want to use them, it can be frustrating if you don't speak the local languages).

Also ask yourself if you want to find a new home, some nomad years don't count towards permanent residency requirements, so you may be delaying things while you do it. For me that's fine, for you maybe not.

If you've got the liquidity it's usually worth going for a couple weeks before you make any final decisions to scope out the local territory and see if you can operate comfortably, but I'd encourage anyone thinking about it to look into it, you may find a lifestyle you really like better than home, wherever that is.

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

#99

Post by cheschire »

pwinnski wrote: post #90
cheschire wrote: post #43

Earlier quoted context omitted.

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

The question was specifically about software developers. It could be that the US underpays on average relative to the rest of the world, but they definitely overpay software developers relative to the rest of the world.

Where did you infer OP was talking specifically about software development? The question states “remote jobs” which can refer to any number of knowledge worker positions.

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

#100

Post by turkeysandwich »

skywal_l wrote: post #89
DoingIsLearning wrote: post #85

Earlier quoted context omitted.

You make a lot of good points. I agree it is a cultural problem but the other half of the problem is _Taxation_. Culturally most workers in EU markets (I am generalizing but lets exclude Executive, Finance, and Consulting positions) see an offer letter as the end of the recruitment process. People are not confident in negotiating an offer up because they are afraid employers will withdraw or walk-way (Which I have ha…

> Pension Systems that at this point are a Ponzi scheme where working taxpayers are paying for retiree income (Privatized Retirement is fairly limited in Europe and mostly optional on top of standard contributions) How is this a Ponzi Scheme ? Currently working people help sustain retired people the same way retired people help the retired people when they were working and the same way young people will sustain the c…

It's a Ponzi scheme when it's not sustainable.

Social Security in the US, for example is not financially viable in its current form. Either the retirement age will need to be raised or its obligations will need to be abandoned, probably a bit of both.

Some but not all European pension schemes are facing similar problems.

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