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This is the correct answer. To put it another way, US companies are more productive (in the economic sense) than EU companies, and that gap is even wider for t

This is the correct answer. To put it another way, US companies are more productive (in the economic sense) than EU companies, and that gap is even wider for tech companies (& those that rely heavily on employing software engineers). Putting aside the question of whether EU companies have higher overhead per employee (probably true on average), they also derive significantly less value from their employees. This is the same effect which explains why the few "big" tech companies in otherwise low-paying regions will pay above local market rates (e.g. Shopify, Spotify, etc).

fy20 6y ago
Reading your comment gave me a thought... maybe a better way of looking at the difference in salaries is that living in the EU is better value for money than living in the US. In pretty much all of the EU, even in expensive cities like Stockholm or Dublin, if you earn a salary of €100,000, you can live a pretty decent life. Heck even on €50,000, you can do well in a lot of places. Good luck doing the same in any of the top 10 most expensive cities in the US.
- comp_throw7 6y ago
  There is a sense in which a non-trivial chunk of those productivity gains are eaten up by rent-seeking (in SF/NY, the high rents are literally rent-seeking in that they're the result of deliberate manipulation of local laws & regulations around housing & zoning for the benefit of existing homeowners). Even there, though, a single person can live quite nicely on 100k USD (or 120k USD, if going from 100k Euro), if they're ok with roommates. On 50-60k USD, yeah, that'd be trickier, though honestly it's manageable if you skip the top 5. You can have a very reasonable quality of life in, say, Los Angeles (as a healthy young person without dependents, yes) with that income.
  - crossroadsguy 6y ago
    You were comparing apples and oranges in living standards. The moment you inserted roommates, it became apples and bananas. By the time you will reach public transport, safety etc - it will be apples and cookies.
    - comp_throw7 6y ago
      The person I was replying to didn't specify any particular baseline for living standards, so I reject the assertion that my example was inappropriate. If you want to raise a family in SF proper, I agree that 100k/yr total income would be insufficient for what most people consider a reasonable QoL, even if one spouse stayed at home to take care of the children to avoid childcare costs. Of course, in SF, 100k/yr is "entry-level engineer at an early stage startup" territory in terms of earnings, which is not the typical profile of someone trying to raise children. You'd have to be trying really hard to not make double that as a mid-level engineer in the Bay, though. Keep in mind that even once you get past the flashy comp numbers at FAANG, there are a huge number of publicly-traded tech companies in the Bay which pay enough that you could afford a mortgage to buy a house in SF on a single engineer's earnings without breaking 35% of post-tax take home pay. (A bit of a stretch at 200k, easy at 250k.) Even startups are getting there: a friend of mine recently got a new job in the Bay (not in SF, but close) paying over 200k in cash comp (base + bonus) with less than 5 years of experience, plus some options (which are probably not worthless, but can't immediately be used to pay a mortgage). He's a good engineer but this isn't an unusual outcome; some of the engineers I know aren't as good, but they make more money because they took the interview grind seriously and went for companies with publicly-traded stock.
- sparkling 6y ago
  > In pretty much all of the EU, even in expensive cities like Stockholm or Dublin, if you earn a salary of €100,000, you can live a pretty decent life. Define "decent". In the top tier cities in western EU countries, buying even a modest apartment that will house a small family will be a challenge on €100k (pre-tax!). It is certainly doable, but you will not be able to afford any other luxuries.
  - dgellow 6y ago
    What locations are you considering? Because €100k/year in Germany is a really high income.
    - thesimon 6y ago
      Still, buying a house for your family will be difficult in the main cities.
      - dgellow 6y ago
        But almost nobody buy a house for their family in city centers. People rent/buy apartments, or just move a few kms outside and buy/build a full house.
    - f6v 6y ago
      100k puts you in 1% of the earners, you can get that money as a CTO. Definitely not as a software engineer.
      - maigret 6y ago
        You actually can get that salary in big companies as senior developer, often with team responsibilities. Example: https://www.glassdoor.com/Salary/Google-Germany-Salaries-EI_IE9079.0,6_IL.7,14_IN96.htm https://www.glassdoor.com/Salary/Google-Germany-Salaries-EI_... And it's not only Google.
      - seppel 6y ago
        You can easily get into that range as a principal software engineer in Germany. E.g, finance and car industry will pay that, depending on the niche even in a startup if you negotiate properly. 100k will also not put you in the 1% of the earners if you consider the cities where the high paying jobs are.

fy20 6y ago

Reading your comment gave me a thought... maybe a better way of looking at the difference in salaries is that living in the EU is better value for money than living in the US. In pretty much all of the EU, even in expensive cities like Stockholm or Dublin, if you earn a salary of €100,000, you can live a pretty decent life. Heck even on €50,000, you can do well in a lot of places. Good luck doing the same in any of the top 10 most expensive cities in the US.

comp_throw7 6y ago
There is a sense in which a non-trivial chunk of those productivity gains are eaten up by rent-seeking (in SF/NY, the high rents are literally rent-seeking in that they're the result of deliberate manipulation of local laws & regulations around housing & zoning for the benefit of existing homeowners). Even there, though, a single person can live quite nicely on 100k USD (or 120k USD, if going from 100k Euro), if they're ok with roommates. On 50-60k USD, yeah, that'd be trickier, though honestly it's manageable if you skip the top 5. You can have a very reasonable quality of life in, say, Los Angeles (as a healthy young person without dependents, yes) with that income.
- crossroadsguy 6y ago
  You were comparing apples and oranges in living standards. The moment you inserted roommates, it became apples and bananas. By the time you will reach public transport, safety etc - it will be apples and cookies.
  - comp_throw7 6y ago
    The person I was replying to didn't specify any particular baseline for living standards, so I reject the assertion that my example was inappropriate. If you want to raise a family in SF proper, I agree that 100k/yr total income would be insufficient for what most people consider a reasonable QoL, even if one spouse stayed at home to take care of the children to avoid childcare costs. Of course, in SF, 100k/yr is "entry-level engineer at an early stage startup" territory in terms of earnings, which is not the typical profile of someone trying to raise children. You'd have to be trying really hard to not make double that as a mid-level engineer in the Bay, though. Keep in mind that even once you get past the flashy comp numbers at FAANG, there are a huge number of publicly-traded tech companies in the Bay which pay enough that you could afford a mortgage to buy a house in SF on a single engineer's earnings without breaking 35% of post-tax take home pay. (A bit of a stretch at 200k, easy at 250k.) Even startups are getting there: a friend of mine recently got a new job in the Bay (not in SF, but close) paying over 200k in cash comp (base + bonus) with less than 5 years of experience, plus some options (which are probably not worthless, but can't immediately be used to pay a mortgage). He's a good engineer but this isn't an unusual outcome; some of the engineers I know aren't as good, but they make more money because they took the interview grind seriously and went for companies with publicly-traded stock.
sparkling 6y ago
> In pretty much all of the EU, even in expensive cities like Stockholm or Dublin, if you earn a salary of €100,000, you can live a pretty decent life. Define "decent". In the top tier cities in western EU countries, buying even a modest apartment that will house a small family will be a challenge on €100k (pre-tax!). It is certainly doable, but you will not be able to afford any other luxuries.
- dgellow 6y ago
  What locations are you considering? Because €100k/year in Germany is a really high income.
  - thesimon 6y ago
    Still, buying a house for your family will be difficult in the main cities.
    - dgellow 6y ago
      But almost nobody buy a house for their family in city centers. People rent/buy apartments, or just move a few kms outside and buy/build a full house.
  - f6v 6y ago
    100k puts you in 1% of the earners, you can get that money as a CTO. Definitely not as a software engineer.
    - maigret 6y ago
      You actually can get that salary in big companies as senior developer, often with team responsibilities. Example: https://www.glassdoor.com/Salary/Google-Germany-Salaries-EI_IE9079.0,6_IL.7,14_IN96.htm https://www.glassdoor.com/Salary/Google-Germany-Salaries-EI_... And it's not only Google.
    - seppel 6y ago
      You can easily get into that range as a principal software engineer in Germany. E.g, finance and car industry will pay that, depending on the niche even in a startup if you negotiate properly. 100k will also not put you in the 1% of the earners if you consider the cities where the high paying jobs are.