5 ms·

I've always been perplexed by the massive salary rift between Europe and SV.

by msvan 8y ago

0xfaded 8y ago
There's an even bigger rift between startup valuations. Less investment, less value created or employee, lower salaries. To be fair, Europe and the more able governments are making up some of the gap through grant money. Although this leads to a cottage industry of funneling government money into others pockets, whether it be through companies that help you apply for the grants or just bullshit startups that aren't properly vetted.
ed_balls 8y ago
You have to normalise by purchasing power and take the quality of life into account. My 60k salary in Poland gives me similar quality of life like 100k in Denmark and 140k in SF.
- eafkuor 8y ago
  Wait, you have a 60k USD salary in Poland? Where do you work, what do you do? I'm on 40k and I already feel like this is better than 100k in Denmark, considering their higher taxes and insane cost of living
- TulliusCicero 8y ago
  60k is high for a Polish software developer, 140k is probably below the median for SF.
- krakatau1 8y ago
  Yes, that's another abnormal labor market. I'm from Croatia, but I've seen similar things with colleagues from eastern and central Europe. IT salaries here are much better than western Europe compared to other professions and it's not worth migrating. I've interviewed for jobs in Netherlands, Belgium, Denmark and Germany and the highest offer was 75k € for job in Brussels region. According to online calculators thats 40k take home salary with housing and services at least twice as expensive. My 50k € Croatian salary leaves me with 33k net with vastly better quality of life. Why are western Europe's developers paid so little while living in much richer countries?
kayoone 8y ago
But SF in general is such a unique case because of the huge tech market and high cost of living. 70-80k EUR in Berlin get you as far as 150k USD in SF i would imagine. Also very different cultures and socioeconomics in terms of taxes, state welfare etc. It's just hard to compare. But when I see that tech salaries in expensive European cities like London/Stockholm aren't really much better than in Berlin, I am a bit perplexed too to be honest. Most of it has to come down to demand and supply in the end.
- 0xfaded 8y ago
  Some cost don't vary by location, and whatever you have left over after living expenses is absolute purchasing power. In the SF I could (and did) fly light aircraft. Fat chance doing that on $60k no matter where you live.
rightbyte 8y ago
The wage statistics in e.g. Sweden is after a 31.43% "federal" (royal?) pay-roll tax is deducted. BLS, US median for programmers: 82 240 USD/y https://www.bls.gov/ooh/computer-and-information-technology/computer-programmers.htm https://www.bls.gov/ooh/computer-and-information-technology/... Engineering Union, Sweden, median for union programmers: 61 416 USD/y, as reported. 80 719 USD/y, including payroll tax. I believe other European countries could report data in a similar manner. The employer cost is similar.
- 0xfaded 8y ago
  Only anecdotal, but $60k at a startup in Denmark is not uncommon.
  - rightbyte 8y ago
    If we assume Danish wages are similar to Swedish, the $60k bracket should be the most common, actually. I don't really trust these fantastic Silicon Valley wage statistics. There seems to be bad coverage over a wide range of companies, and it mostly seems to be self-reported in a non-organized way. BLS collects a wider range of statistics than PayScale or what not the HR departments are spamming with good reviews and salaries. https://www.huffingtonpost.com/entry/silicon-valley-salaries_us_56d61ee6e4b0bf0dab33ce96 https://www.huffingtonpost.com/entry/silicon-valley-salaries... To even base an article on those numbers is borderline fraud. For "San Francisco-Redwood City-South San Francisco, CA Metropolitan Division" BLS reports $106k mean wage for programmers. https://www.bls.gov/oes/current/oes151131.htm https://www.bls.gov/oes/current/oes151131.htm Swedish Engineering union reports mean wage: 69 543 USD/y in Stockholm 91 400 USD/y including payroll tax. So the difference is 1.1k USD more a month for the median Bay-area programmer compared to Stockholm in employer cost. It's not really raining VC money over the SF area programmers compared to e.g. Stockholm, where there is more or less none VC money.
- isodude 8y ago
  There's really no point in climbing over 60k/y in Sweden since you start to pay upwards 50% tax on that. Perks are also taxed, so better condition/more vacation is better way of "raising" the salary. https://en.m.wikipedia.org/wiki/Taxation_in_Sweden https://en.m.wikipedia.org/wiki/Taxation_in_Sweden
jandrewrogers 8y ago
Two main contributors to this in my experience, and both suggest this is unlikely to change for the foreseeable future. Part of it is cultural, in that there is still a widespread perception that software engineers are fungible cogs and that no one could possibly be worth that much more than the average technical worker in any other industry -- they value the contribution like industrial labor. I do a lot of work in Europe and many business people find it inexplicable that any software engineer could be worth a senior manager's wage. The second part is that while wages are relatively low, the cost of employment is astonishingly high in many European countries. Consequently, the fraction of employment cost that gets delivered to the worker as wages is much smaller, all other things being equal. From an employer's perspective, the employment costs are much closer than the paycheck suggests. The company only cares about employment costs, not wages per se. This is unlikely to change anytime soon because it is a manifestation of the social labor ethos common in Europe.
CalRobert 8y ago
Me too - though I also am perplexed by the massive "respect for other people's down time" rift too. It always saddened me when people said they'd be on vacation and then details of how to bug them with trivial issues. That being said, I suppose I'm a little hypocritical because I live in Europe and work remotely for a US company. I was already doing fairly well (not astronomical) by local standards but got a 40% raise by just being normal by US standards. It makes me wonder why there isn't more entrepreneurship here. Labour is cheap and if you fail you're unlikely to die in a gutter (at least you have health care). Hell, even commutes are better for the most part. It should be easier to start something in Europe than in California, not harder. Maybe I'll give it a shot after naturalization.
alkonaut 8y ago
We have 1.5 months off (paid). I never work past 5pm and most days not past 4pm (4 is when I get the kinds from school). I could probably make 50-100% more somewhere else but I’d likely be working much more. What’s the hourly pay difference?
aluren 8y ago
There are things like cost of living and social security nets that account for the difference, but even then there's still a gap, albeit smaller. It seems that you do have more purchasing power in the US than in Europe, if you're college- or PhD-educated. On the flip side: I know a few people who turned down opportunities to go work in the US, or who went there and came back to Europe after a few years. Having not worked outside Europe, I'm always curious about discussing the various pros and cons, and although the pros were fairly obvious (good weather all year long, astronomical salary, etc.), one of the cons listed was invariably "I have to live in the US". Exactly why this was a con changed from person to person, but it was always there, and couldn't be accounted to long distance since countries like Japan or Singapore were fine. I'm going to hazard a guess and say that there's something intangible (which could probably be best ascribed to 'quality of life', as vague as it sounds) that makes very competent people stay in or go back to Europe, and this limits the brain drain somewhat and maintains competition for lower wages on this side of the Atlantic.
- henrikschroder 8y ago
  I'll add a +1 to your list. I'm now in the fortunate position of being able to sit anywhere in the US or the EU and work, and I'm sitting in the US. Pro: The weather is fantastic. Running a sole proprietorship is easy. Con: Everything else. I'm absolutely not growing old in this place, and I will definitely move back to Europe before I retire.

I've always been perplexed by the massive salary rift between Europe and SV.

by msvan 8y ago

I've always been perplexed by the massive salary rift between Europe and SV.

There's an even bigger rift between startup valuations. Less investment, less value created or employee, lower salaries. To be fair, Europe and the more able governments are making up some of the gap through grant money. Although this leads to a cottage industry of funneling government money into others pockets, whether it be through companies that help you apply for the grants or just bullshit startups that aren't properly vetted.

ed_balls 8y ago

You have to normalise by purchasing power and take the quality of life into account. My 60k salary in Poland gives me similar quality of life like 100k in Denmark and 140k in SF.

eafkuor 8y ago
Wait, you have a 60k USD salary in Poland? Where do you work, what do you do? I'm on 40k and I already feel like this is better than 100k in Denmark, considering their higher taxes and insane cost of living
TulliusCicero 8y ago
60k is high for a Polish software developer, 140k is probably below the median for SF.
krakatau1 8y ago
Yes, that's another abnormal labor market. I'm from Croatia, but I've seen similar things with colleagues from eastern and central Europe. IT salaries here are much better than western Europe compared to other professions and it's not worth migrating. I've interviewed for jobs in Netherlands, Belgium, Denmark and Germany and the highest offer was 75k € for job in Brussels region. According to online calculators thats 40k take home salary with housing and services at least twice as expensive. My 50k € Croatian salary leaves me with 33k net with vastly better quality of life. Why are western Europe's developers paid so little while living in much richer countries?

kayoone 8y ago

But SF in general is such a unique case because of the huge tech market and high cost of living. 70-80k EUR in Berlin get you as far as 150k USD in SF i would imagine. Also very different cultures and socioeconomics in terms of taxes, state welfare etc. It's just hard to compare. But when I see that tech salaries in expensive European cities like London/Stockholm aren't really much better than in Berlin, I am a bit perplexed too to be honest. Most of it has to come down to demand and supply in the end.

0xfaded 8y ago
Some cost don't vary by location, and whatever you have left over after living expenses is absolute purchasing power. In the SF I could (and did) fly light aircraft. Fat chance doing that on $60k no matter where you live.

rightbyte 8y ago

The wage statistics in e.g. Sweden is after a 31.43% "federal" (royal?) pay-roll tax is deducted. BLS, US median for programmers: 82 240 USD/y https://www.bls.gov/ooh/computer-and-information-technology/computer-programmers.htm https://www.bls.gov/ooh/computer-and-information-technology/... Engineering Union, Sweden, median for union programmers: 61 416 USD/y, as reported. 80 719 USD/y, including payroll tax. I believe other European countries could report data in a similar manner. The employer cost is similar.

0xfaded 8y ago
Only anecdotal, but $60k at a startup in Denmark is not uncommon.
- rightbyte 8y ago
  If we assume Danish wages are similar to Swedish, the $60k bracket should be the most common, actually. I don't really trust these fantastic Silicon Valley wage statistics. There seems to be bad coverage over a wide range of companies, and it mostly seems to be self-reported in a non-organized way. BLS collects a wider range of statistics than PayScale or what not the HR departments are spamming with good reviews and salaries. https://www.huffingtonpost.com/entry/silicon-valley-salaries_us_56d61ee6e4b0bf0dab33ce96 https://www.huffingtonpost.com/entry/silicon-valley-salaries... To even base an article on those numbers is borderline fraud. For "San Francisco-Redwood City-South San Francisco, CA Metropolitan Division" BLS reports $106k mean wage for programmers. https://www.bls.gov/oes/current/oes151131.htm https://www.bls.gov/oes/current/oes151131.htm Swedish Engineering union reports mean wage: 69 543 USD/y in Stockholm 91 400 USD/y including payroll tax. So the difference is 1.1k USD more a month for the median Bay-area programmer compared to Stockholm in employer cost. It's not really raining VC money over the SF area programmers compared to e.g. Stockholm, where there is more or less none VC money.
isodude 8y ago
There's really no point in climbing over 60k/y in Sweden since you start to pay upwards 50% tax on that. Perks are also taxed, so better condition/more vacation is better way of "raising" the salary. https://en.m.wikipedia.org/wiki/Taxation_in_Sweden https://en.m.wikipedia.org/wiki/Taxation_in_Sweden

jandrewrogers 8y ago

Two main contributors to this in my experience, and both suggest this is unlikely to change for the foreseeable future. Part of it is cultural, in that there is still a widespread perception that software engineers are fungible cogs and that no one could possibly be worth that much more than the average technical worker in any other industry -- they value the contribution like industrial labor. I do a lot of work in Europe and many business people find it inexplicable that any software engineer could be worth a senior manager's wage. The second part is that while wages are relatively low, the cost of employment is astonishingly high in many European countries. Consequently, the fraction of employment cost that gets delivered to the worker as wages is much smaller, all other things being equal. From an employer's perspective, the employment costs are much closer than the paycheck suggests. The company only cares about employment costs, not wages per se. This is unlikely to change anytime soon because it is a manifestation of the social labor ethos common in Europe.

CalRobert 8y ago

Me too - though I also am perplexed by the massive "respect for other people's down time" rift too. It always saddened me when people said they'd be on vacation and then details of how to bug them with trivial issues. That being said, I suppose I'm a little hypocritical because I live in Europe and work remotely for a US company. I was already doing fairly well (not astronomical) by local standards but got a 40% raise by just being normal by US standards. It makes me wonder why there isn't more entrepreneurship here. Labour is cheap and if you fail you're unlikely to die in a gutter (at least you have health care). Hell, even commutes are better for the most part. It should be easier to start something in Europe than in California, not harder. Maybe I'll give it a shot after naturalization.

alkonaut 8y ago

We have 1.5 months off (paid). I never work past 5pm and most days not past 4pm (4 is when I get the kinds from school). I could probably make 50-100% more somewhere else but I’d likely be working much more. What’s the hourly pay difference?

aluren 8y ago

There are things like cost of living and social security nets that account for the difference, but even then there's still a gap, albeit smaller. It seems that you do have more purchasing power in the US than in Europe, if you're college- or PhD-educated. On the flip side: I know a few people who turned down opportunities to go work in the US, or who went there and came back to Europe after a few years. Having not worked outside Europe, I'm always curious about discussing the various pros and cons, and although the pros were fairly obvious (good weather all year long, astronomical salary, etc.), one of the cons listed was invariably "I have to live in the US". Exactly why this was a con changed from person to person, but it was always there, and couldn't be accounted to long distance since countries like Japan or Singapore were fine. I'm going to hazard a guess and say that there's something intangible (which could probably be best ascribed to 'quality of life', as vague as it sounds) that makes very competent people stay in or go back to Europe, and this limits the brain drain somewhat and maintains competition for lower wages on this side of the Atlantic.

henrikschroder 8y ago
I'll add a +1 to your list. I'm now in the fortunate position of being able to sit anywhere in the US or the EU and work, and I'm sitting in the US. Pro: The weather is fantastic. Running a sole proprietorship is easy. Con: Everything else. I'm absolutely not growing old in this place, and I will definitely move back to Europe before I retire.