5 ms·

If you're comparing to European jobs, one factor is that the U.S. has higher income inequality then many other countries, which means generally the highly paid

by mjn 10y ago

If you're comparing to European jobs, one factor is that the U.S. has higher income inequality then many other countries, which means generally the highly paid jobs pay more, and the poorly paid jobs pay less. This will make U.S. salaries look good in some areas, and bad in others. (The median U.S. salary is also a bit higher than most other countries, but not by enough to explain the differences seen specifically in tech salaries.) I think there is also not as much of a general tech talent shortage in Europe, so it's not one of the most in-demand jobs outside of specialized areas (if you're a top deep-learning expert right now, yes, but not for general programming / SE jobs). Many European countries traditionally have very strong STEM education, in a number of cases actually overproducing highly skilled graduates in the field relative to the local industry's needs (which is why you see a lot of Spanish, Romanian, Greek, Italian, etc. STEM graduates working in other countries). Not quite as badly oversupplied in the "T" part of STEM as in the "M" part, but still, not a shortage. edit: Oh, another factor, for right now, that I should've mentioned is that the U.S. dollar is much stronger against the Euro and UK pound than it has been historically (even compared to a year or two ago), while salaries don't respond that quickly to currency movements. There are still significant differences if you use circa 2015 exchange rates, but smaller.

civilian 10y ago
Uhhhhhhhh income inequality does not have that kind of effect. Income inequality may effect the taxes paid by people, but it doesn't change salaries the way that you're suggesting. America just has more highly paid jobs, because we've got some of the biggest companies and highest GDP per capita in the world. And this has the effect of creating a greater spread of income. It's a bigger, richer, pond.
- CamMacFarlane 10y ago
  >[USA] has the highest GDP per capita in the world Not quite, it has the 18th highest. Below Hong Kong, Switzerland, and Ireland all who pay less for engineering. https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html https://www.cia.gov/library/publications/the-world-factbook/...
  - doctorpangloss 10y ago
    A more appropriate comparison might be GDP per OECD region, where the United States absolutely dominates. https://en.m.wikipedia.org/wiki/List_of_OECD_regions_by_GDP_(PPP)_per_capita https://en.m.wikipedia.org/wiki/List_of_OECD_regions_by_GDP_...
    - eric-hu 10y ago
      That list was impressive until I read about what OECD is. It's a 35 country organization.
  - TulliusCicero 10y ago
    The US does have the highest GDP for any major country, though. The ones above it there are all quite small.
    - sokoloff 10y ago
      Switzerland, Singapore, Norway, Hong Kong and UAE don't match my definition of "quite small". Each of them has several million inhabitants.
      - mtanski 10y ago
        The U.S has ~ 320 million people. So 2 magnitudes difference compared to some others. Additionally the U.S is quite large with many regions and sub-regions. Some regions have quite high GDP while others lower. So given that it's quite impressive versus much smaller and less populous countries. In any case it's a stretch to make an apples to apples comparison when you have 2 magnitudes of population difference.
        dx034 10y ago
        That way you could say the US is a small country because it only has ~1/4 of the population of China. Just because a country has a smaller population it doesn't make it unsuitable to live or to compare economic data.
- mjn 10y ago
  In what sense does it not work that way? And what do taxes have to do with it? I'm not talking about progressive tax rates, but about wider dispersion in incomes (which is what income inequality measures). If you have wider dispersion of incomes, generally you have more people making quite high salaries as well as more people making quite low salaries. I.e.: The 95th percentile American worker makes considerably more than the 95th percentile German worker, while the 5th percentile American worker makes considerably less than the 5th percentile German worker. And yes, the U.S. median is also higher, which is an additional effect, but not enough alone to explain the (larger) difference in tech salaries (they aren't identical income distribution curves just shifted by a +$X constant in the U.S.'s favor).
  - civilian 10y ago
    It's the causation that you suggest that's wrong. Income inequality is not an _input_ into this equation. It's the measure of a system! And what income inequality is really measuring is just the mix of jobs. If you have everyone working the same job for the same amount, you'd have 0 income inequality. It's when you have a different mix of jobs that are valued differently that you get income inequality. America has a different mix of jobs, which changes our income inequality in comparison to Europe. I think that the best way to explain the differences in software compensation is in supply/demand factors. The limited immigration, weak STEM education, businesses understanding the value of software, and inefficiencies with outsourcing makes it so that software developers can command a higher salary in the US because there's both reduced supply and increased demand. So yeah. That's my problem. I think that there are clear supply/demand factors that explain the difference in compensation, and income inequality is the measure of a system, it is not an input variable.
- iklos55 10y ago
  GDP per capita is one of the worst metric you could cite
devnonymous 10y ago
This actually. It's not that the other countries are paying less, the US companies pay more. In Europe other kind of engineers (mechanical, electrical etc) are pretty much earning salaries at par with software engineers. And then further on the typically lower wage salary bracket... Where the salaries in the US would require keeping 2 jobs, in Europe is good enough to get by.
MrDosu 10y ago
Can confirm. As a comparison: I am a programmer with above average pay in Germany, my mom works upper management in a big company. I make about twice as much as a steel worker and she makes twice as much as me. The same jobs in the us would pay about 3-4 times a steelworker for me and triple to quadruple my pay for her.
- bdavisx 10y ago
  I can confirm that. Live in the US, work for a giant company. I make very good money, but someone in management just 2 levels above me (e.g. my boss's boss) makes over 2x what I make. There's no way most of those people contribute that much more to the company - some might, but most don't.
rbanffy 10y ago
> higher income inequality This. I'll gladly pay more (as in earn less) to live (and to raise my kids) in a more equal society. I grew up in a very unequal one (even though it had universal healthcare) and I was really tired of that.

by mjn 10y ago

civilian 10y ago

Uhhhhhhhh income inequality does not have that kind of effect. Income inequality may effect the taxes paid by people, but it doesn't change salaries the way that you're suggesting. America just has more highly paid jobs, because we've got some of the biggest companies and highest GDP per capita in the world. And this has the effect of creating a greater spread of income. It's a bigger, richer, pond.

CamMacFarlane 10y ago
>[USA] has the highest GDP per capita in the world Not quite, it has the 18th highest. Below Hong Kong, Switzerland, and Ireland all who pay less for engineering. https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html https://www.cia.gov/library/publications/the-world-factbook/...
- doctorpangloss 10y ago
  A more appropriate comparison might be GDP per OECD region, where the United States absolutely dominates. https://en.m.wikipedia.org/wiki/List_of_OECD_regions_by_GDP_(PPP)_per_capita https://en.m.wikipedia.org/wiki/List_of_OECD_regions_by_GDP_...
  - eric-hu 10y ago
    That list was impressive until I read about what OECD is. It's a 35 country organization.
- TulliusCicero 10y ago
  The US does have the highest GDP for any major country, though. The ones above it there are all quite small.
  - sokoloff 10y ago
    Switzerland, Singapore, Norway, Hong Kong and UAE don't match my definition of "quite small". Each of them has several million inhabitants.
    - mtanski 10y ago
      The U.S has ~ 320 million people. So 2 magnitudes difference compared to some others. Additionally the U.S is quite large with many regions and sub-regions. Some regions have quite high GDP while others lower. So given that it's quite impressive versus much smaller and less populous countries. In any case it's a stretch to make an apples to apples comparison when you have 2 magnitudes of population difference.
      - dx034 10y ago
        That way you could say the US is a small country because it only has ~1/4 of the population of China. Just because a country has a smaller population it doesn't make it unsuitable to live or to compare economic data.
mjn 10y ago
In what sense does it not work that way? And what do taxes have to do with it? I'm not talking about progressive tax rates, but about wider dispersion in incomes (which is what income inequality measures). If you have wider dispersion of incomes, generally you have more people making quite high salaries as well as more people making quite low salaries. I.e.: The 95th percentile American worker makes considerably more than the 95th percentile German worker, while the 5th percentile American worker makes considerably less than the 5th percentile German worker. And yes, the U.S. median is also higher, which is an additional effect, but not enough alone to explain the (larger) difference in tech salaries (they aren't identical income distribution curves just shifted by a +$X constant in the U.S.'s favor).
- civilian 10y ago
  It's the causation that you suggest that's wrong. Income inequality is not an _input_ into this equation. It's the measure of a system! And what income inequality is really measuring is just the mix of jobs. If you have everyone working the same job for the same amount, you'd have 0 income inequality. It's when you have a different mix of jobs that are valued differently that you get income inequality. America has a different mix of jobs, which changes our income inequality in comparison to Europe. I think that the best way to explain the differences in software compensation is in supply/demand factors. The limited immigration, weak STEM education, businesses understanding the value of software, and inefficiencies with outsourcing makes it so that software developers can command a higher salary in the US because there's both reduced supply and increased demand. So yeah. That's my problem. I think that there are clear supply/demand factors that explain the difference in compensation, and income inequality is the measure of a system, it is not an input variable.
iklos55 10y ago
GDP per capita is one of the worst metric you could cite

devnonymous 10y ago

This actually. It's not that the other countries are paying less, the US companies pay more. In Europe other kind of engineers (mechanical, electrical etc) are pretty much earning salaries at par with software engineers. And then further on the typically lower wage salary bracket... Where the salaries in the US would require keeping 2 jobs, in Europe is good enough to get by.

MrDosu 10y ago

Can confirm. As a comparison: I am a programmer with above average pay in Germany, my mom works upper management in a big company. I make about twice as much as a steel worker and she makes twice as much as me. The same jobs in the us would pay about 3-4 times a steelworker for me and triple to quadruple my pay for her.

bdavisx 10y ago
I can confirm that. Live in the US, work for a giant company. I make very good money, but someone in management just 2 levels above me (e.g. my boss's boss) makes over 2x what I make. There's no way most of those people contribute that much more to the company - some might, but most don't.

rbanffy 10y ago

> higher income inequality This. I'll gladly pay more (as in earn less) to live (and to raise my kids) in a more equal society. I grew up in a very unequal one (even though it had universal healthcare) and I was really tired of that.