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 am older than you think but I still need to pay out of pocket for most things and get an insurance for unemployment and invest my pension. At that point even when Im older other than healthcare and kids getting a free education theres not much more Id get out of the welfare. If I get sick its the insursnce that pays for me again. At some point paying 50% taxes and when Im old I basically have no pension feels so wrong. I feel taken advantage of. When Im old if I cant drive id sell the house and move to a smaller apartment in a city like most old people do. Again the country is not giving me anything or helping me its only my investments and decisions that would give me a bright future.
However if I slack off and Im a parasite the welfare will help me no problem. Im not that kind of person but it feels thats what my taxes pay for for the rest of my life.
Oof, it sounds like your country is further along than mine on the “broken down social system” scale. My country is already dealing with reports about retirees who can’t survive off their pension despite working for an average income their entire lives, old people who are not able to find caretakers and people who have to wait in line for an unreasonably long time to get public healthcare and subsidized housing. All while politicians slash budgets and make privatized systems the only way to get timely and high-quality services. I can only see it getting worse from here and it makes no sense to pay so much for something whose quality only gets worse with every passing year.
I think your country is my country. 60% top skat… still no decent public pension. Where the money goes who knows.
I’m not Danish (I’m the resident foreign invader on the instance), but if you are, you should come over to feddit.dk to complain with us. Privatization and the social system destroying itself is a hot topic right now.
I must admit though, the way you described your country made me think you were from Greece or somewhere that is bleeding citizens because its social systems are beyond salvaging at this point. Is the public pension in Denmark really unliveable? I would assume that it’s much worse here in Sweden but old people are generally still able to get by.
I dont remember the exact numbers but it was around 1/5-1/6 of what I make a year now. I mean if you have the house fully paid and dont have any expense other than food maybe its technically possible but its so low you need the private one. And if you rent all your life like some people do then Im not sure what would be your options.
In the danish reddit people also say take an american job in denmark never look back. The best of both worlds american salary with danish welfare and protection laws. I was just trying to understand why its only them that pay well and the rest dont do more than average.
I think it has to do with the higher rate of investor funding in the US that allows companies to spend above their actual assets by a huge margin, because of the significantly lower capital gains taxes there. The risk is much higher that US companies go bankrupt or investors stop funding the company during times of high interest rates (such as now), which is why US tech companies are disproportionately affected by the post-Coronavirus layoffs. Even Reddit itself (according to Spez) has not been profitable through all 18 years of its operation, but someone was clearly pouring money into it to keep it running. European companies on the other hand have a lot more administrative overhead when it comes to loans and investment than US companies, so they can’t use money they don’t have to offer attractive compensation on the level of US companies.
That could explain some but still “old” hardware companies not even software ones can pay well above market here. I would imagine these to be more similar to european stable companies.
I think ultimately the US choses to pay more for certain jobs at the expense of some others getting less. In Norway for example I read somewhere software developers only make 20% more than the average worker. I think that would be unimaginable in the US. Theres simply not the same reward for hard work in Europe as theres in USA and I think its dangerous because it tells people to do the bare minimum and make Europe less competitive. Why study for 5 years and work hard (mentally) all your life when you can just work in a factory or flip burgers etc for next to the same?
Reading some comments I think laws are weaker in the US and companies need to pay more as hiring a worker there is closer to hiring a contractor here in terms on how easy is to fire. But still these companies choose to pay more when they come to Europe to attract talent.
Hardware companies have much deeper pockets because the initial investment for hardware design and manufacturing is much higher than software. This also helps them keep their profits because new companies can’t enter the industry and compete as easily.
I also realized that I didn’t mention the elephant in the room, selection bias. US companies in Europe are those who have already “made it” in their domestic market and are looking to expand globally, of course they’ll bring money that Arnes Webbyrå AB doesn’t have. I follow CS industry discussions that naturally end up talking about the US a lot, and there are stories about how retrenched developers with experience had to accept terrible wages like $30k a year with all of the lack of safety nets that living in the US comes with. Those positions exist, but they don’t hire foreigners, so we never hear about them.
But I agree with you that a high minimum wage also reduces how much a company can pay its top employees, because their expenses on lower-paid employees like customer support and janitors will have to be balanced out somehow.