Or rather why Europe pays so bad.
I wonder whats the reason behind many american companies being able to pay 200-400kusd a year while its hard to get past 100k usd in the richer countries of Europe (Germany, Scandinavia, UK, etc.). A junior in USA gets more than a senior in Europe. And after 10 years the american may get 2-4x the salary of the european counterpart. In contrast life in USA is often even cheaper.
- Are european companies greedy?
- Are european companies less competitive?
- Are the high taxes and equality in Europe pushing companies to not try harder to reward talent while USA rewards the high performers as they can see the benefits it brings?
I don’t think that you, me and OP have different values on this issue, actually? We all agree that the state is supposed to provide us with a structure to live in that we couldn’t have on our own, and as payment for this safety net, we contribute taxes. My and OP’s argument is that with the current projection of the economy and population growth, the state cannot provide the current generation of tax payers with the structures and support that we will eventually need, and therefore many of us would rather pay lower taxes and lose the benefits, because we won’t be getting them anyway. We know what’s coming and we don’t want to be the ones “holding the bag” when the system collapses.
I’m trying to explain OP’s point to the Americans in this thread who don’t understand that European social security systems are currently under severe strain and are on the road to collapse, and how OP feels to have to sacrifice so much of his potential income to support a failing system. The 80s stereotypes of reliable, high-quality social security no longer hold true in Europe in 2023.
I think its hard for some americans to understand that welfare in Europe is not an utopia. I personally believe the estate needs to provide help and support to citizens including healthcare and basic education at a minimum. Ideally some basic help for people that are unable to work and whatever is needed for people to not be on the street.
My biggest issue is as it is right now I can see how much money I have been putting over the years and how much extra money I still need to put on top privately to have a quality of life for things such as pension, salary insurance, etc. So while almost half my salary goes out as taxes I still need to contribute on my own to private companies. On top of that I can see people that can take advantage of the system and between the high taxes and all the help you can get (house help, unemployment, lids, etc.) theres people not working that get almost as much as an engineer working full time. I think something is off.
But this has nothing to do with the post of why american companies choose to pay more than european ones.
I brought up the social system because you can see that everyone in this thread arguing against you is saying that your “excellent welfare system” is the reason why your income is lower than the corresponding American programmer’s. The massive taxation is obviously a big factor to your reduced income, but let’s look away from that for a bit and just focus on the American companies.
American companies in America pay more because the costs of doing business in America are much lower and there is a greater availability of loans and funding.
American companies in Europe pay more because they have the advantages listed above that local European companies don’t have and they have the resources to invest in a global expansion.
That’s it. That’s the answer.
I’m not American, but I born and bred in the EU. Please don’t assume wildly :)
I still view it as a value issue: you are looking out for your own good above contributing to society. If everyone does that, it will be utterly impossible for society to actually give back, because you’re depriving society of the taxes it needs to move.
I’d rather contribute to society and the social security net we have. Any society will have people who are unable to work due to disability or sickness, and to me taking care of your weak links is a mark of civilization. We don’t have to leave disabled or injured members of society in the dust to die. We have the means to take care of them, and that’s what taxes are for.
But we kind of lost track of the original question, why the wages are lower in the EU than in the US. In my opinion it’s because with all the social security and insurance it is not necessary and the environment - the society - is providing part of what you get in monetary form in the US.