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I was approached by a German blockchain company last year and the salary range discussed wasn't great. Less than half. And it didn't seem cheaper to live the

I was approached by a German blockchain company last year and the salary range discussed wasn't great. Less than half. And it didn't seem cheaper to live there. My theory of why tech salaries are higher in the US: the US, public and private, borrows trillions of dollars. It consumes more than it produces. Wages are higher. And so are imports and immigration. It's all a consequence of the borrowing. If the US stopped borrowing so much and stopped inflating bubbles and re-inflating them after they collapse, consumption, wages, imports and immigration would fall. If the US started paying down its debt, we'd be producing more than we consume. We'd be exporting more than we import and there'd be more emigrants than immigrants. The growth industries are the most prone to bubbles. It's easier to believe something that is rising will get big than something that is the same or shrinking. So most of the VC capital goes to growth industries. Well, it would in any case, but even more so when there is an unnatural amount of capital. So that is where salaries get bid up the most.

asmithmd1 8y ago
>> It consumes more than it produces One of the things the US produces with it's huge military spending is stability. The way the rest of the world pays for that stability is through buying T bills that pay <2% Every empire throughout history has demanded taxes from client countries, the way the US collects those taxes might be unique. All that is a long way of saying: don't worry about all that debt, it will never be paid back.
- stretchwithme 8y ago
  THere's a big difference being paying a tax and lending somebody money. And an even bigger difference between having cash in the bank and being unable to borrow.
chimeracoder 8y ago
> My theory of why tech salaries are higher in the US: the US, public and private, borrows trillions of dollars. It consumes more than it produces. Wages are higher. And so are imports and immigration. It's all a consequence of the borrowing. If the US stopped borrowing so much and stopped inflating bubbles and re-inflating them after they collapse, consumption, wages, imports and immigration would fall. Just so everyone is clear, this is a heterodox (fringe) theory that is not accepted by economists, mostly because it flies in the face of both macroeconomic theory and empirical research.
- mschuster91 8y ago
  > Just so everyone is clear, this is a heterodox (fringe) theory that is not accepted by economists, mostly because it flies in the face of both macroeconomic theory and empirical research. It has its bases in reality, though. Remember Yo? 1.5M at 10M$ valuation for an app that broadcasts "yo". This is only made possible because borrowing money is extremely cheap in the US compared to Europe.
  - chimeracoder 8y ago
    > It has its bases in reality, though. Remember Yo? 1.5M at 10M$ valuation for an app that broadcasts "yo". This is only made possible because borrowing money is extremely cheap in the US compared to Europe. This is itself reductive and doesn't really represent the full story (venture capital in particular is itself already largely sourced from foreign money). In any case, the statement "low interest rates encourage investment" isn't fridge (in fact, it is literally tautological). The fringe part is the idea that the US is fueling cycles this way, and the implication that the US economy would somehow be better off by paying off debt instead of printing money.
    - mschuster91 8y ago
      > The fringe part is the idea that the US is fueling cycles this way I thought that the entire point of lowering interest rates is to fuel the economy? Problem is when the markets have become addicted to cheap money, and politicians don't have the guts to force them to give up the cheap money, so eventually the bubble bursts...
      - stretchwithme 8y ago
        It exaggerates the cycles for sure. If the Fed let interest rates be set by the market after the next bubble collapse, the recovery would be slower, less bubbly and growth would be based on the value of things, rather than how easily a sector is stoked by interest rates. And it would be more likely to be sustainable and stable.
- 8y ago
deleted 8y ago
[deleted]
mrep 8y ago
The reason US tech salaries are high is because the 5 most valuable public companies in the world are Apple, Amazon, Alphabet, Microsoft and Facebook [0] which are all tech based American companies headquartered in 2 areas (bay area and seattle). They all compete for talent and bring up salaries for American software engineers (and they can still easily pay a lot more). [0]: https://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization#2018 https://en.wikipedia.org/wiki/List_of_public_corporations_by...
- stretchwithme 8y ago
  I am aware of the competition between these companies. I live in Silicon Valley and spent a couple of years at Apple. But I hardly think the investment environment in the Valley is irrelevant. Companies do use capital to get big.
gomox 8y ago
Living in Berlin is absurdly cheaper than leaving in San Francisco. Think small appartments for 500 euros a month.
- stretchwithme 8y ago
  Good to know. But.... https://www.thelocal.de/20170411/germany-has-second-biggest-tax-burden-worldwide-report-shows https://www.thelocal.de/20170411/germany-has-second-biggest-...
  - xyzzyz 8y ago
    For most California engineers, moving to Germany with the same salary would effectively reduce their taxes. California taxes for high earners are very high, even by European standards.
    - stretchwithme 8y ago
      That could be true. A lower rate on double the salary could still mean a higher tax bill. And in California, the state income tax is an additional burden. Of course, it's the final take home pay that matters.
      - deleted 8y ago
        [deleted]
    - balabaster 8y ago
      Unfortunately for most United States citizens, there's a double taxation system. Which means that even if you're living and working in another country, you're still required to report your income and pay taxes in the United States which means that even if the tax bill is lower in the country you live in, you've still gotta pay the difference in taxes to the U.S... unless you're willing to give up your U.S. citizenship in favour of your country of residence, which is a long and arduous process in a lot of cases. Moving to Germany wouldn't be enough. You'd have to emigrate to Germany, become a German citizen and give up your U.S. passport in order to escape the U.S. tax system.

asmithmd1 8y ago

>> It consumes more than it produces One of the things the US produces with it's huge military spending is stability. The way the rest of the world pays for that stability is through buying T bills that pay <2% Every empire throughout history has demanded taxes from client countries, the way the US collects those taxes might be unique. All that is a long way of saying: don't worry about all that debt, it will never be paid back.

stretchwithme 8y ago
THere's a big difference being paying a tax and lending somebody money. And an even bigger difference between having cash in the bank and being unable to borrow.

chimeracoder 8y ago

> My theory of why tech salaries are higher in the US: the US, public and private, borrows trillions of dollars. It consumes more than it produces. Wages are higher. And so are imports and immigration. It's all a consequence of the borrowing. If the US stopped borrowing so much and stopped inflating bubbles and re-inflating them after they collapse, consumption, wages, imports and immigration would fall. Just so everyone is clear, this is a heterodox (fringe) theory that is not accepted by economists, mostly because it flies in the face of both macroeconomic theory and empirical research.

mschuster91 8y ago
> Just so everyone is clear, this is a heterodox (fringe) theory that is not accepted by economists, mostly because it flies in the face of both macroeconomic theory and empirical research. It has its bases in reality, though. Remember Yo? 1.5M at 10M$ valuation for an app that broadcasts "yo". This is only made possible because borrowing money is extremely cheap in the US compared to Europe.
- chimeracoder 8y ago
  > It has its bases in reality, though. Remember Yo? 1.5M at 10M$ valuation for an app that broadcasts "yo". This is only made possible because borrowing money is extremely cheap in the US compared to Europe. This is itself reductive and doesn't really represent the full story (venture capital in particular is itself already largely sourced from foreign money). In any case, the statement "low interest rates encourage investment" isn't fridge (in fact, it is literally tautological). The fringe part is the idea that the US is fueling cycles this way, and the implication that the US economy would somehow be better off by paying off debt instead of printing money.
  - mschuster91 8y ago
    > The fringe part is the idea that the US is fueling cycles this way I thought that the entire point of lowering interest rates is to fuel the economy? Problem is when the markets have become addicted to cheap money, and politicians don't have the guts to force them to give up the cheap money, so eventually the bubble bursts...
    - stretchwithme 8y ago
      It exaggerates the cycles for sure. If the Fed let interest rates be set by the market after the next bubble collapse, the recovery would be slower, less bubbly and growth would be based on the value of things, rather than how easily a sector is stoked by interest rates. And it would be more likely to be sustainable and stable.
8y ago

deleted 8y ago

[deleted]

mrep 8y ago

The reason US tech salaries are high is because the 5 most valuable public companies in the world are Apple, Amazon, Alphabet, Microsoft and Facebook [0] which are all tech based American companies headquartered in 2 areas (bay area and seattle). They all compete for talent and bring up salaries for American software engineers (and they can still easily pay a lot more). [0]: https://en.wikipedia.org/wiki/List_of_public_corporations_by_market_capitalization#2018 https://en.wikipedia.org/wiki/List_of_public_corporations_by...

stretchwithme 8y ago
I am aware of the competition between these companies. I live in Silicon Valley and spent a couple of years at Apple. But I hardly think the investment environment in the Valley is irrelevant. Companies do use capital to get big.

gomox 8y ago

Living in Berlin is absurdly cheaper than leaving in San Francisco. Think small appartments for 500 euros a month.

stretchwithme 8y ago
Good to know. But.... https://www.thelocal.de/20170411/germany-has-second-biggest-tax-burden-worldwide-report-shows https://www.thelocal.de/20170411/germany-has-second-biggest-...
- xyzzyz 8y ago
  For most California engineers, moving to Germany with the same salary would effectively reduce their taxes. California taxes for high earners are very high, even by European standards.
  - stretchwithme 8y ago
    That could be true. A lower rate on double the salary could still mean a higher tax bill. And in California, the state income tax is an additional burden. Of course, it's the final take home pay that matters.
    - deleted 8y ago
      [deleted]
  - balabaster 8y ago
    Unfortunately for most United States citizens, there's a double taxation system. Which means that even if you're living and working in another country, you're still required to report your income and pay taxes in the United States which means that even if the tax bill is lower in the country you live in, you've still gotta pay the difference in taxes to the U.S... unless you're willing to give up your U.S. citizenship in favour of your country of residence, which is a long and arduous process in a lot of cases. Moving to Germany wouldn't be enough. You'd have to emigrate to Germany, become a German citizen and give up your U.S. passport in order to escape the U.S. tax system.