4 ms·

Same in Germany, lots of unions in tech.

by aeyes 6y ago

missedthecue 6y ago
Why are their salaries so low then? I'm not seeing the advantage here.
- eythian 6y ago
  They're not that low, I'm working in tech in the Netherlands and earn well above the median, even excluding bonuses and equity and such. I imagine Germany is similar. It's more that the salaries in parts of the US seem unnaturally high.
  - nemo44x 6y ago
    I’m a hiring manager with a global team. Yes salaries for Europeans are generally much lower than USA employees. Except Switzerland. They’re getting paid similarly to people in the more expensive parts of the USA. There’s a few reasons why EU compensation is so low. One is it’s expensive to hire a person in the EU. We have to pay a lot in taxes on the employees behalf. They never see this on their check stub - it’s paid as part of a payroll tax. We have these in the USA as well but much lower and parts of it phase out as the employee earns more. Keep in mind that the USA employee may have to cover certain things like part of their health care though. Secondly it’s far more difficult to get rid of an EU employee. We can of course, but it can be more expensive. People make more in the USA and it’s a reason a lot of people from EU/UK come here to work in professional roles. Lower taxes and lower costs of employing someone send the money to the employee. But also a lot of the covered benefits (health, pension, etc) the USA employee has to cover themselves out of their pay (pre-tax though). So in part it’s a visibility thing too.
- MHard 6y ago
  I think it should be obvious that unions are not the only factor contributing to salaries. For instance: Average salary for tech in Germany is roughly twice as high as in Spain, even though they are working in the same market zone and have comparable workers protection. Though there are some differences in fiscal policy like for instance Vat tax (Spain 21% for service industry, Germany 19%). I believe the main reason why the USA have such a high salary in comparison is because of a few factors: Most importantly a huge zone speaking one single language that by now is spoken throughout the world, leading to a much bigger initial market, thus making it easier to create start ups and selling your goods. So you can easily invest in R&D. Additionally, silicon valley is home to huge monopolies/duopolies like Google, Apple, Intel etc. And while these might hurt competition and the market as a whole, they also increase the demand for labour in the US. Another contributing factor, though I don't have any numbers to back it up is that higher education is a privilege in the US whereas in Germany it is a commodity.
  - save_ferris 6y ago
    Don’t forget about access to capital. The relative ease of raising rounds in the US compared to Europe due to the more concentrated networks of investment capital pushes salaries up because startups need to hire ASAP to build their product.
- username90 6y ago
  I think unions suppress wages when demand is very high, since they make salary negotiations public making it easier for entire industries to just agree on a single salary that don't get out of hand. Pretty simile to the no poaching agreement just that it is now legal. I mean, a union is happy if they can negotiate a relatively "high" raise each year of a few percent, and if they demand more they get scolded by other unions.
- aeyes 6y ago
  Unions are not only about salaries. The company I worked at was unionized and the union made yearly salary adjustments happen. But to answer your question: In Germany, what the company actually ends up paying is about 20% higher than what you have in your contract. The company pays part of your unemployment insurance, healthcare insurance and some other contributions/taxes employees don't get to see. Your own contributions are usually around 40%. If a company pays 100k in total you end up with ~50k in your pocket after taxes/contributions. I also feel that tech salaries in some regions of the US are a bit disconnected from what is happening in the rest of the world.

Same in Germany, lots of unions in tech.

by aeyes 6y ago

Same in Germany, lots of unions in tech.

missedthecue 6y ago

Why are their salaries so low then? I'm not seeing the advantage here.

eythian 6y ago
They're not that low, I'm working in tech in the Netherlands and earn well above the median, even excluding bonuses and equity and such. I imagine Germany is similar. It's more that the salaries in parts of the US seem unnaturally high.
- nemo44x 6y ago
  I’m a hiring manager with a global team. Yes salaries for Europeans are generally much lower than USA employees. Except Switzerland. They’re getting paid similarly to people in the more expensive parts of the USA. There’s a few reasons why EU compensation is so low. One is it’s expensive to hire a person in the EU. We have to pay a lot in taxes on the employees behalf. They never see this on their check stub - it’s paid as part of a payroll tax. We have these in the USA as well but much lower and parts of it phase out as the employee earns more. Keep in mind that the USA employee may have to cover certain things like part of their health care though. Secondly it’s far more difficult to get rid of an EU employee. We can of course, but it can be more expensive. People make more in the USA and it’s a reason a lot of people from EU/UK come here to work in professional roles. Lower taxes and lower costs of employing someone send the money to the employee. But also a lot of the covered benefits (health, pension, etc) the USA employee has to cover themselves out of their pay (pre-tax though). So in part it’s a visibility thing too.
MHard 6y ago
I think it should be obvious that unions are not the only factor contributing to salaries. For instance: Average salary for tech in Germany is roughly twice as high as in Spain, even though they are working in the same market zone and have comparable workers protection. Though there are some differences in fiscal policy like for instance Vat tax (Spain 21% for service industry, Germany 19%). I believe the main reason why the USA have such a high salary in comparison is because of a few factors: Most importantly a huge zone speaking one single language that by now is spoken throughout the world, leading to a much bigger initial market, thus making it easier to create start ups and selling your goods. So you can easily invest in R&D. Additionally, silicon valley is home to huge monopolies/duopolies like Google, Apple, Intel etc. And while these might hurt competition and the market as a whole, they also increase the demand for labour in the US. Another contributing factor, though I don't have any numbers to back it up is that higher education is a privilege in the US whereas in Germany it is a commodity.
- save_ferris 6y ago
  Don’t forget about access to capital. The relative ease of raising rounds in the US compared to Europe due to the more concentrated networks of investment capital pushes salaries up because startups need to hire ASAP to build their product.
username90 6y ago
I think unions suppress wages when demand is very high, since they make salary negotiations public making it easier for entire industries to just agree on a single salary that don't get out of hand. Pretty simile to the no poaching agreement just that it is now legal. I mean, a union is happy if they can negotiate a relatively "high" raise each year of a few percent, and if they demand more they get scolded by other unions.
aeyes 6y ago
Unions are not only about salaries. The company I worked at was unionized and the union made yearly salary adjustments happen. But to answer your question: In Germany, what the company actually ends up paying is about 20% higher than what you have in your contract. The company pays part of your unemployment insurance, healthcare insurance and some other contributions/taxes employees don't get to see. Your own contributions are usually around 40%. If a company pays 100k in total you end up with ~50k in your pocket after taxes/contributions. I also feel that tech salaries in some regions of the US are a bit disconnected from what is happening in the rest of the world.