7 ms·

Might have to pay "talent" more than $40k a year before aiming for the moon.

toomuchtodo 6y ago
It's a complicated issue. Facebook pays well but their product is toxic to society. Google, Amazon, and Apple pay well but they can because of their moats and the lax US regulatory environment. Would FAANG be able to pay as well when anti competition regulations start to kick in and chip away at their revenue streams? Euro pay is definitely much lower (and needs to rise to meet the value technologists deliver), but perhaps its unrealistic to expect US tech comp (that's likely to compress anyway with remote work normalizing). TLDR SV pay is likely too high and unsustainable in the long term. Equity moonshots are already lottery tickets, and you can't set public policy based on lottery tickets.
- blocked_again 6y ago
  Leave US pay. Europe pay is low even in Indian standards.
- marvin 6y ago
  The reason EU companies don't pay US tech salaries is that there aren't enough super profitable companies, and also, related, that the most profitable companies don't properly have to compete for the best engineers. I think we would move in the direction of US tech companies if we managed to create five world-class tech behemoths, but I don't see that happening. Taxation will necessarily affect things; some places have an employer tax that approaches 100%. (Half the salary to the employee and half to the state, then tax the employee's share again afterwards).
  - pyrale 6y ago
    > (Half the salary to the employee and half to the state, then tax the employee's share again afterwards) Can't think of a single country having that. This money which you count as tax goes into retirement, healthcare and stuff like that. Would you consider US packages including healthcare to be taxed ?
    - marvin 6y ago
      I could be mistaken and/or have an incomplete picture based on my relatives' experiences of running a small business in France. My impression was that an amount corresponding to the total salary of their employees was required in tax payment from the employer, with the employee's taxes coming on top of this. This tax could of course consist of social security or retirement benefit contribution, if so I got an incomplete picture. Are you by chance familiar with this system? I am familiar with Norway's system. Employer pays 14% of employee's gross salary as tax and required to pay at least 2% as retirement contributions. Employee normally pays in somewhere between 30-40% tax on what's left, 8 percentage points of these being the state retirement contribution. Socialized healthcare. Company taxed 22% on all profits and owners taxed 31% on all dividends and capital gains. Most of the particularly rough parts of the tax system are in form of VAT, taxation of capital and special-purpose taxes on various sectors and activities, mostly transportation. With the 70%-ish oil producer tax being a welcome special case of this. In this case, our modest salaries for globally in-demand skills are mostly due to a lack of very profitable companies, plus probably a degree of cultural bias against high performers. Marginal tax rate tops out at ~46% after $110,000/year, so one isn't incentivized to work hard for salary increases.
      - pyrale 6y ago
        > [...] France. My impression was that an amount corresponding to the total salary of their employees was required in tax payment from the employer, with the employee's taxes coming on top of this. The lion's share of what the employer pays is not taxes. It is, indeed, mandatoty, but it is not a tax collected by the state, as it opens individual rights to jobless claims, health insurance and retirement schemes. Revenue tax is also directly taken from salary since a couple years ago, but that means most people don't pay any tax besides what's on their salary.
        barry-cotter 6y ago
        > The lion's share of what the employer pays is not taxes. It is, indeed, mandatoty, but it is not a tax collected by the state, as it opens individual rights to jobless claims, health insurance and retirement schemes. If it’s a state mandated by the state that you can go to prison for not paying economically it’s a tax. It functions exactly like a tax in every way. That it’s legally something else is irrelevant to economic impact.
knuthsat 6y ago
The problem is that EU countries tax the paychecks so much that you’ll never be able to reach US levels.
- blocked_again 6y ago
  That's not the problem. The tax in Europe is similar to that in California. The problem is tech companies pay very very low.
  - jariel 6y ago
    The Tax in Europe is generally much higher, but a lot of it is hidden in payroll tax and VAT that you don't see. So x% has already 'come off your paycheck' before you see it, and then an extra 15% on everything that you buy. Which is also hidden. That is offset by extra services, esp. healthcare, but in tech, healthcare is usually a benefit on top of salary anyhow.
    - lordnacho 6y ago
      I've yet to see a calculation where these factors balance the salary gap across the Atlantic. How is a European dev on 40k going to get to say $120K with tax, healthcare, and holidays?
      - jariel 6y ago
        Well it's more than that: it's also parks, public transport, nice civic infrastructure, a lot of local civic things, generous benefits when out of work, cheaper education, probably higher relative salaries for 'many others'. The US may not average $120K for devs, it's probably lower across the board. Then you actually do have apparent inequality problems in the US and if that were taken care if, it would be even less. It's not as wide as indicated by salaries, but it's still a gap.
        blocked_again 6y ago
        You raise an interesting point. Europeans don't really need to save much money. Because the government takes care of health, education and all the essential things. Why do you need a lot of money if you have everything taken care of. On the other hand when you are living in US or anywhere else you need to have a shit ton of money in bank just to make sure that you don't go bankrupt. For example education for your kids would be ridiculously expensive in US. And if you don't have an insurance you might get bankrupt if you have to hospital for emergency. If I have a choice to be born again in a random country, I would be opting for Germany or some scanadanvian country for sure. US is too risky to be born randomly.
ma2rten 6y ago
You have to take into account that cost of healthcare, cost of living and that Europeans typically don't have student loans to pay off.
- csunbird 6y ago
  the difference between europe salaries and usa salaries are multiple of any student loan or healthcare that you can get.
  - ma2rten 6y ago
    It depends where in Europe and where in the US. Google adjusts salaries based on the local market. Salaries in Google's Zurich office is higher than in the Bay Area.
    - google234123 6y ago
      Google is a US company though...
- opportune 6y ago
  Almost all US software jobs come with healthcare for your family. Average student loan amount is like $30k. Even accounting for these costs EU pay is pretty bad compared to US. I was saving $100k/y my first job out of school in the US. This was at a good-but-not-great company with a standard new grad offer The seemingly only place that’s replicable is in Switzerland at a handful of companies (Google and some small other companies) and that’s not even in the EU.
  - person_of_color 6y ago
    100k post tax? What company is that??
    - opportune 6y ago
      This was at a company with a very large number of employees in the Seattle area. I’m including my 401k+match (which may not be completely fair because that’s what we have instead of pensions since SS is so paltry) and signing bonus.

It's a complicated issue. Facebook pays well but their product is toxic to society. Google, Amazon, and Apple pay well but they can because of their moats and the lax US regulatory environment. Would FAANG be able to pay as well when anti competition regulations start to kick in and chip away at their revenue streams? Euro pay is definitely much lower (and needs to rise to meet the value technologists deliver), but perhaps its unrealistic to expect US tech comp (that's likely to compress anyway with remote work normalizing). TLDR SV pay is likely too high and unsustainable in the long term. Equity moonshots are already lottery tickets, and you can't set public policy based on lottery tickets.

blocked_again 6y ago
Leave US pay. Europe pay is low even in Indian standards.
marvin 6y ago
The reason EU companies don't pay US tech salaries is that there aren't enough super profitable companies, and also, related, that the most profitable companies don't properly have to compete for the best engineers. I think we would move in the direction of US tech companies if we managed to create five world-class tech behemoths, but I don't see that happening. Taxation will necessarily affect things; some places have an employer tax that approaches 100%. (Half the salary to the employee and half to the state, then tax the employee's share again afterwards).
- pyrale 6y ago
  > (Half the salary to the employee and half to the state, then tax the employee's share again afterwards) Can't think of a single country having that. This money which you count as tax goes into retirement, healthcare and stuff like that. Would you consider US packages including healthcare to be taxed ?
  - marvin 6y ago
    I could be mistaken and/or have an incomplete picture based on my relatives' experiences of running a small business in France. My impression was that an amount corresponding to the total salary of their employees was required in tax payment from the employer, with the employee's taxes coming on top of this. This tax could of course consist of social security or retirement benefit contribution, if so I got an incomplete picture. Are you by chance familiar with this system? I am familiar with Norway's system. Employer pays 14% of employee's gross salary as tax and required to pay at least 2% as retirement contributions. Employee normally pays in somewhere between 30-40% tax on what's left, 8 percentage points of these being the state retirement contribution. Socialized healthcare. Company taxed 22% on all profits and owners taxed 31% on all dividends and capital gains. Most of the particularly rough parts of the tax system are in form of VAT, taxation of capital and special-purpose taxes on various sectors and activities, mostly transportation. With the 70%-ish oil producer tax being a welcome special case of this. In this case, our modest salaries for globally in-demand skills are mostly due to a lack of very profitable companies, plus probably a degree of cultural bias against high performers. Marginal tax rate tops out at ~46% after $110,000/year, so one isn't incentivized to work hard for salary increases.
    - pyrale 6y ago
      > [...] France. My impression was that an amount corresponding to the total salary of their employees was required in tax payment from the employer, with the employee's taxes coming on top of this. The lion's share of what the employer pays is not taxes. It is, indeed, mandatoty, but it is not a tax collected by the state, as it opens individual rights to jobless claims, health insurance and retirement schemes. Revenue tax is also directly taken from salary since a couple years ago, but that means most people don't pay any tax besides what's on their salary.
      - barry-cotter 6y ago
        > The lion's share of what the employer pays is not taxes. It is, indeed, mandatoty, but it is not a tax collected by the state, as it opens individual rights to jobless claims, health insurance and retirement schemes. If it’s a state mandated by the state that you can go to prison for not paying economically it’s a tax. It functions exactly like a tax in every way. That it’s legally something else is irrelevant to economic impact.

knuthsat 6y ago

The problem is that EU countries tax the paychecks so much that you’ll never be able to reach US levels.

blocked_again 6y ago
That's not the problem. The tax in Europe is similar to that in California. The problem is tech companies pay very very low.
- jariel 6y ago
  The Tax in Europe is generally much higher, but a lot of it is hidden in payroll tax and VAT that you don't see. So x% has already 'come off your paycheck' before you see it, and then an extra 15% on everything that you buy. Which is also hidden. That is offset by extra services, esp. healthcare, but in tech, healthcare is usually a benefit on top of salary anyhow.
  - lordnacho 6y ago
    I've yet to see a calculation where these factors balance the salary gap across the Atlantic. How is a European dev on 40k going to get to say $120K with tax, healthcare, and holidays?
    - jariel 6y ago
      Well it's more than that: it's also parks, public transport, nice civic infrastructure, a lot of local civic things, generous benefits when out of work, cheaper education, probably higher relative salaries for 'many others'. The US may not average $120K for devs, it's probably lower across the board. Then you actually do have apparent inequality problems in the US and if that were taken care if, it would be even less. It's not as wide as indicated by salaries, but it's still a gap.
      - blocked_again 6y ago
        You raise an interesting point. Europeans don't really need to save much money. Because the government takes care of health, education and all the essential things. Why do you need a lot of money if you have everything taken care of. On the other hand when you are living in US or anywhere else you need to have a shit ton of money in bank just to make sure that you don't go bankrupt. For example education for your kids would be ridiculously expensive in US. And if you don't have an insurance you might get bankrupt if you have to hospital for emergency. If I have a choice to be born again in a random country, I would be opting for Germany or some scanadanvian country for sure. US is too risky to be born randomly.

ma2rten 6y ago

You have to take into account that cost of healthcare, cost of living and that Europeans typically don't have student loans to pay off.

csunbird 6y ago
the difference between europe salaries and usa salaries are multiple of any student loan or healthcare that you can get.
- ma2rten 6y ago
  It depends where in Europe and where in the US. Google adjusts salaries based on the local market. Salaries in Google's Zurich office is higher than in the Bay Area.
  - google234123 6y ago
    Google is a US company though...
opportune 6y ago
Almost all US software jobs come with healthcare for your family. Average student loan amount is like $30k. Even accounting for these costs EU pay is pretty bad compared to US. I was saving $100k/y my first job out of school in the US. This was at a good-but-not-great company with a standard new grad offer The seemingly only place that’s replicable is in Switzerland at a handful of companies (Google and some small other companies) and that’s not even in the EU.
- person_of_color 6y ago
  100k post tax? What company is that??
  - opportune 6y ago
    This was at a company with a very large number of employees in the Seattle area. I’m including my 401k+match (which may not be completely fair because that’s what we have instead of pensions since SS is so paltry) and signing bonus.