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> Labor is more expensive in Europe Where are you getting that from? Average American wages are $63,000 per worker. Higher than any country besides Switzerlan

> Labor is more expensive in Europe Where are you getting that from? Average American wages are $63,000 per worker. Higher than any country besides Switzerland, Iceland and Luxembourg[1]. To compare to this five largest EU members: Americans are paid 28% higher than Germans, 41% higher than Frenchmen, 59% higher than Brits, and 64% higher than Italians and Spaniards. [1] https://en.wikipedia.org/wiki/List_of_countries_by_average_wage https://en.wikipedia.org/wiki/List_of_countries_by_average_w...

0xfaded 6y ago
Labor is more expensive in Europe because workers rights add significant overhead. A simple example, 37.5h work weeks and 5 weeks paid holiday is pretty standard. Then there are severances. Also, if you look at the median US wages, it's appearant how much does there is at the top. Yes, Americans do have higher wages overall, but this is because there are fewer worker rights and less hidden costs for the employer. This does not mean labor is cheaper. https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_median_wage_and_mean_wage https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_terr...
- em-bee 6y ago
  in germany the employer overhead per employee is almost 100%
  - 0xfaded 6y ago
    That's amazing. In Denmark it's closer to 25% if you don't count severances.
    - em-bee 6y ago
      we may be comparing different numbers. i doubt it's that low. i don't know the specifics in germany, but there is net salary and gross salary, and there are employer contributions beyond gross salary, as well as other costs. my understanding is that put everything together, the cost per employee is twice the gross salary. this includes cost for equipment, work space and whatever else you need to spend money on to help an employee to do their job. 25% seems very low. it's possibly only the taxes and insurance and related contributions. or maybe denmark calculates the gross salary different? i searched a few resources and found references ranging from 1.5 to 1.7. so not quite 100%. here is a swiss example with a compact table. https://www.runmyaccounts.ch/2013/07/wie-viel-kostet-ein-mitarbeiter-wirklich/ https://www.runmyaccounts.ch/2013/07/wie-viel-kostet-ein-mit... this one suggests a cost of 6900 for a 4500 gross salary. but it also adds hiring a manager per 10 employees and splitting that up among the employees being managed, bringing the cost to 8285. so yeah, it depends on what numbers we are actually comparing
      - deleted 6y ago
        [deleted]
rasz 6y ago
I suspect mandatory social security and health insurance overhead are significantly higher in EU.
eli_gottlieb 6y ago
>The wage distribution is right-skewed; the majority of people earn less than the average wage. So that measure's not worth much.
llsf 6y ago
Employers in most European countries have to pay for healthcare, pension, unemployment, taxes. In US some employers do also pay for those, but in Europe it can represent a much bigger part. When an American is paid 41% higher than Frenchmen, much (if not more) of those 41% are actually paid by the employer). The frenchman would have healthcare included, pension at 65yo, better unemployment protection, virtually free education for his children, etc. From an employer's perspective, labor is more expensive in Europe than in US (even the minimum wage is higher in most Europe). Not saying one solution is better than the other. Just comparing different approaches.

0xfaded 6y ago

Labor is more expensive in Europe because workers rights add significant overhead. A simple example, 37.5h work weeks and 5 weeks paid holiday is pretty standard. Then there are severances. Also, if you look at the median US wages, it's appearant how much does there is at the top. Yes, Americans do have higher wages overall, but this is because there are fewer worker rights and less hidden costs for the employer. This does not mean labor is cheaper. https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_median_wage_and_mean_wage https://en.m.wikipedia.org/wiki/List_of_U.S._states_and_terr...

em-bee 6y ago
in germany the employer overhead per employee is almost 100%
- 0xfaded 6y ago
  That's amazing. In Denmark it's closer to 25% if you don't count severances.
  - em-bee 6y ago
    we may be comparing different numbers. i doubt it's that low. i don't know the specifics in germany, but there is net salary and gross salary, and there are employer contributions beyond gross salary, as well as other costs. my understanding is that put everything together, the cost per employee is twice the gross salary. this includes cost for equipment, work space and whatever else you need to spend money on to help an employee to do their job. 25% seems very low. it's possibly only the taxes and insurance and related contributions. or maybe denmark calculates the gross salary different? i searched a few resources and found references ranging from 1.5 to 1.7. so not quite 100%. here is a swiss example with a compact table. https://www.runmyaccounts.ch/2013/07/wie-viel-kostet-ein-mitarbeiter-wirklich/ https://www.runmyaccounts.ch/2013/07/wie-viel-kostet-ein-mit... this one suggests a cost of 6900 for a 4500 gross salary. but it also adds hiring a manager per 10 employees and splitting that up among the employees being managed, bringing the cost to 8285. so yeah, it depends on what numbers we are actually comparing
    - deleted 6y ago
      [deleted]

rasz 6y ago

I suspect mandatory social security and health insurance overhead are significantly higher in EU.

eli_gottlieb 6y ago

>The wage distribution is right-skewed; the majority of people earn less than the average wage. So that measure's not worth much.

llsf 6y ago

Employers in most European countries have to pay for healthcare, pension, unemployment, taxes. In US some employers do also pay for those, but in Europe it can represent a much bigger part. When an American is paid 41% higher than Frenchmen, much (if not more) of those 41% are actually paid by the employer). The frenchman would have healthcare included, pension at 65yo, better unemployment protection, virtually free education for his children, etc. From an employer's perspective, labor is more expensive in Europe than in US (even the minimum wage is higher in most Europe). Not saying one solution is better than the other. Just comparing different approaches.