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?
Aren’t all companies greedy?
No, just different.
No, taxes are basically the same, and we get much more in return as well. Also cost of living is much lower, the programming jobs in USA are usually in big citys where the cost of living is astronomical, in most EU countrys thats different.
You live better with 100k in Europe than with 400k in USA most likely.
The guy making 400kusd a year can probably save and invest 100k a year and retire after 10 years. He can then come enjoy all the european benefits if he wants. Im sure he lives better off.
You’re right. But half this conversation is a bunch of people using random US stereotypes and downvoting anyone who says otherwise. Cost of living is fairly irrelevant when you’ve got an extra $200k/year post-tax to play with. And any company paying that much will give you really nice benefits including fully coverage health insurance and possibly a on-call concierge to help if you have any issues. Being poor in the US is really miserable but I also know people who can’t see a doctor in Europe due to waiting lists (or their GP blocking it) and lack of money for private insurance. Neither case matters if you’re an engineer. And France has the same rate of homelessness as California so neither has a happy community on average.
Each country has its own things that are better and worse. At the end of the day US companies pay more before taxes than european ones do for the same job. And when american companies come to Europe they also pay more.
I think the discussion of welfare, taxes, etc. is another talk which is independent of this post which id about before taxes salaries for the same type of jobs.
In the US I can quit a job with 0 days notice. I can also be fired from a job with 0 days notice and no severance.
That makes the job market significantly more fluid. If there is demand for a specific job compensation will go up quickly as there is no artificial buffer on people switching jobs for better pay. Supply and demand is very sensitive to small shifts in either. Companies are also not afraid of paying this compensation since worst case they’ll just do some layoffs.
If a US company has some employees in Europe then they still have a benefit from all this so they can pay more than a purely European company. If they need to cut costs they can fire the expensive US employees first and then adjust the Europe comp more slowly. If they need to grow quickly they can do so in the US and then slowly shift to Europe.
edit: The profit margins of US tech companies are also massive as they have relatively little regulation, taxes or bureaucracy. Goggle makes $2 MILLION/employee/year. So no risk of not making record profits by paying an extra $200k.
Source? Everything I’ve read indicates Europe has 15-20% more taxes for the same income. The tax rate in California for $100k would be 27% (total) and a 7% sales tax. Europe seems to be in the 45-50% range depending on the country and a roughly 20% VAT. Even the tax rate in California on $400k would be lower than the tax rate in Europe on $100k.
45% is the absolute highest tax rate you can currently get you need a income of 277826€/year
Yes, we have higher social security Expenditures as well, but they pay back a lot more as well, they are paid 50/50 (Employer/Employee) and they are capped at some point (different for insurance and gets changed every year)
It has pros and cons, cost of living for example is a lot less.
So it’s higher than 45% in reality (for example I believe at $100k the social contributions would be twice as much as the tax). That 27% for California includes everything. If those taxes are worth it are a separate issue.
A person having that tax rate doesn’t pay social security anymore usually…
Thats the highest possible tax rate. Most are around 20% and i don’t think you know how taxes are calculated. You don’t pay 45% on your entire income either.
And no its not a separate issue. It all plays part here.