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?
This can’t be understated. Companies like Google, Microsoft, and Amazon can pay their entry level engineers in the US around $120k/year, but some sources state that the bare minimum salary to be happy in places like Seattle, where these engineers need to be located, is around $117k/year.
Apple earns $2.4m per employee per year… and most of their employees are sales/support staff. They don’t have hundreds of thousands working in R&D. The other big tech companies earn less, but still well above the salary for any employee except for C-level executives.
The reality is they should probably pay even more than they are. Every small tech company I’ve worked for spends nearly 100% of their revenue on salaries (without paying well compared to the big tech companies).
Those sources also state that worldwide the number to be minimally happy is $95k. I’m going to assume Europe is at least at the global average and likely a bit above since the US on average is at $105k. So if you go by those studies then the new grad in Seattle making $120k is minimally happy while the seasoned engineer in Germany making $90k is not. Not that I agree but if we’re going by the study you mentioned then that’s the conclusion.
Not really, that would be a silly comparison. Income influences happiness because it determines how/where you live, what you can afford in terms of basic needs, what’s your disposable income, etc. Some countries, due to the way their society is organized, offload more living expenses to their citizens and ultimately lead low earners to simply not afford some basic services. One example is of course access to healthcare. In Germany you have access to public health care and employers are required to pay social security contributions consisting of a percentage of what they pay you, and in turn you have far more affordable and accessible healthcare. Consequently, the $90k you’d get paid in Germany will ensure you have a better quality of life right from the start by the simple fact that a single trip to the doctor won’t bankrupt you.