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EU has anemic salaries for my profession (software engineer). What’s the reason for this deficit? Why aren’t there any Silicon Valleys in the EU? Salary diffe

EU has anemic salaries for my profession (software engineer). What’s the reason for this deficit? Why aren’t there any Silicon Valleys in the EU? Salary difference is so large, I would never move. Land is dirt cheap, housing is affordable and private healthcare is fine in the US. Before we get in a war on HN - I would move instantly if the salary is matched or even better than US since everything else is scarce in EU (housing, land). Yep, here comes the downvotes.

arghwhat 6y ago
I think it's just more well-balanced over here to be honest. For Denmark: 1. We have a much more chill working situation. You work a regular work day, you're not the property of the company you work at, you do not have non-compete clauses (the company would have to pay your salary in full as long as it was valid), a lot of things that in the US come from post-tax salary is handled by the tax (education for you and your kids, healthcare, etc.) 2. Trying your luck as entrepreneur is easier and much lower risk than in the US. It's also quite easy to get "free" entrepreneurial government grants of small to medium sizes. As a result, there tends to be more, smaller startups, and bootstrapping is popular. When VCs aren't involved, salaries tend to be less astronomical. 3. Software engineer salaries in the US are blown completely out of proportions, and too market-distorting to be goal to have. Just moving to where the salary is highest with no other consideration for anything else sounds... Short-sighted, narrow-minded and greedy (but not in a smart way).
coldtea 6y ago
>Salary difference is so large, I would never move. It's not like the EU wants you to move here, in the first place...
- fermienrico 6y ago
  Not with that attitude!
eek04_ 6y ago
There is a certain total of income for salary available in a country; e.g, the US is spending about 44% of GDP on salaries/compensation[1]. The difference in income for software engineers is partially (and possible mainly) because the US is very income-inequal - ie, because there are more poor people to prop you up. If you look at income inequality before taxes and transfers[2], the US is the most income-inequal of any of the OECD countries. If you look at it after taxes and transfers[3], Chile, Turkey and Mexico manage to do worse. [1] https://fred.stlouisfed.org/graph/?g=2Xa https://fred.stlouisfed.org/graph/?g=2Xa [2] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient,_before_taxes_and_transfers https://en.wikipedia.org/wiki/List_of_countries_by_income_eq... [3] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient,_after_taxes_and_transfers https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
tester34 6y ago
I have very poor understanding of all of this, but I think that EU tech hubs focus on some ~~bullshit~~ not shiny industries like banking/financials, insurance and generally those very mature.
- jerven 6y ago
  Silicon valley has the benefit of long term investment and also being a single centre for all of the US market. EU single market is not nearly as well integrated as the US in practical terms e.g. basic language barriers. Decades of "infrastructure and community" is not easily copied else where and is a real advantage for the US. Europe had lot's of "Facebooks" but non grew out of the local market to be able to gain a global advantage. Silicon valley is not easily reproduced elsewhere in the US either.
  - throwaways885 6y ago
    If it's about language, then why isn't London a huge tech hub (order of magnitude bigger)? They can sell to the US the same way SV exports back to the rest of the world, no?
    - MagnumOpus 6y ago
      London as a tech hub does punch above its weight, mostly because the language makes for a very deep pool of labour -- people from all of Europe plus Russia/India. Of course that is only half the equation -- better and cheaper labour (than in Berlin or Paris, say) brings you halfway there, but the language barrier for customers in the EU as well as regulatory hurdles still make massively harder to scale to the whole of the EU than to the whole of the US.
    - oblio 6y ago
      London is a huge tech hub :-) And it's not bigger because there are trade barriers between countries, for services. It's far from trivial for a UK company to sell stuff in the US. I imagine the timezone difference also doesn't help.
    - 6y ago
rusk 6y ago
Well based on my recent discussions with a prospective American employer the main reason they pay their staff more is the yawning disparity in healthcare costs ...
- i_have_an_idea 6y ago
  You can't honestly believe that, can you? Germany - senior software engineer - 45k eur. US - senior software engineer - 240k usd. Do you or the average engineer, over the course of their lifetime, save or spend around 190k usd a year on healthcare?
  - hans_castorp 6y ago
    > Germany - senior software engineer - 45k eur. That's utter nonsense. 45K € is the salary of a junior software dev right out of university.
    - alexgmcm 6y ago
      He's taken a low-end salary but take 80k euros or even 90k and his argument still applies.
      - hans_castorp 6y ago
        For a senior dev 90k is the low-end, not the average I would say. But this highly depends on where you are in Germany. In Munich or Hamburg salaries will be substantially higher than e.g. Ludwigshafen or Cottbus
  - rusk 6y ago
    I’m just telling you what I was told. I didn’t take the job in the end because some of the clauses in the contract - apparently normal by US standards - were simply astounding.
  - yulaow 6y ago
    240k in the whole US? I thought those were salaries of high col areas (new york, sv, etc)
gspr 6y ago
> private healthcare is fine in the US. It's obviously fine for those who have it or can afford it. The argument is not about whether or not Silicon Valley software engineers can live with private healthcare. The argument that we here in Europe tend to make is that every inhabitant of a country is entitled to that excellent healthcare, nomatter who they are.
- tootahe45 6y ago
  > every inhabitant of a country is entitled to that excellent healthcare This isn't always true.. In some of these free healthcare countries you can be SOL if you get cancer or a rare condition and don't have money for the latest treatments. Here in New Zealand the wait times are so long that a lot of people just pay for private surgery/screening. My father for example was out of work for almost a year waiting for a hip operation, he irrationally thought he was getting a good deal having it publicly funded.
  - gspr 6y ago
    > In some of these free healthcare countries you can be SOL if you get cancer or a rare condition and don't have money for the latest treatments. Here in New Zealand the wait times are so long that a lot of people just pay for private surgery/screening. That is indeed a problem. How does giving up and saying "the rich or well-insured can get these things, the poor not" help in any way shape or form?
  - c0l0 6y ago
    Tell me then, please, how you fare in these other, non-free healthcare countries if you get cancer or a rare condition and don't have money for the latest treatments.
    - tootahe45 6y ago
      Presumably you'd have a healthcare plan of some sort, one which politicians have mandated over the years to cover practically everything. You might also keep some savings for this thanks to the fear mongering on MSM, whereas it would be rare to do so in a free healthcare country.
mrweasel 6y ago
Software engineers are well paid in the EU, just not overpaid. If you compare even a Danish salary with what you could be paid in Silicon Valley, sure, you're pay less well, that doesn't make the EU salary bad. If you read the complaints from software engineers living in the Bay area, they will tell you that housing isn't affordable. You have well paid people with roommates. The affordable housing isn't in the same areas as the jobs (for the most parts). Honestly the startups could move much of their development to eastern Europe and pay half the salary, while still getting some of the best developers in the world.
- oivey 6y ago
  Overpaid is really the wrong way to think about it. The wages in SV are driven by companies who are extremely profitable. Lower pay would mean more wealth for executives who are already some of the most wealthy people in the world (absent some systemic changes in the US government). FAANG employees are just getting a piece of the value of what they’re building.
  - mrweasel 6y ago
    That's one positive way of looking at it. I guess I'm just a little jaded by reading about Google developers who don't really do much, by their own admission, but who are still paid WAY more than they would anywhere else (Not to single Google out, it's just an example).
kolinko 6y ago
I’ve had friends move from working at FAANG in SV back to Poland, taking 60% salary paycut, citing better quality of life here - especially when children are involved. If you have good public transportation (as in: you can get around faster in a bus than using Uber), good and cheap healthcare, and free public education, you just don’t need as much money to get a better lifestyle. Also: “fine” is a good description of the US healthcare. I experienced both US and European healthcare systems and it’s amazing how much worse is one from another. Even if money is not much of an issue.
piva00 6y ago
The reason is that you are comparing to the outlier: the US. Salaries for software engineers in Europe are high, extremely high compared to the general population in terms of standard deviations. The difference is that salaries in the US are more or less uncapped, that benefits a lot us, software engineers, but not society. For society my work as a SWE isn't worth 3x of a nurse, even though economically it makes sense as I bring 5-10x profits to the company I work for as a SWE, just due to the leverage I can be used as to produce value in monetary terms. If the only thing you care about is the figure in your bank account, for all means the US is the best place on Earth for you to try your luck. For people like me, who want to live a happy and comfortable life instead of grinding and living with the stress of all insecurities caused by the US approach to society... It's not a pretty game to live in that kind of society. I posted not long ago the same type of comment, I have a personal anecdote as I moved from a country that is very Americanised (Brazil) to Sweden, the American philosophy of life (individualistic, "got mine, fuck you") only works in the US, with lavish sums of cash flowing around so some of it can drip into normal society. Living in a completely different environment only showed me how sick this kind of living is, how unhappy it makes the average Joe. Good luck as a SWE in the US, it's a cushy place to be. Personally I still prefer to take-home 1/3 of what I could manage in the US but have a much more stable and comfortable life, because the rest of society here also enjoy a stable and comfortable life together with me.

arghwhat 6y ago

I think it's just more well-balanced over here to be honest. For Denmark: 1. We have a much more chill working situation. You work a regular work day, you're not the property of the company you work at, you do not have non-compete clauses (the company would have to pay your salary in full as long as it was valid), a lot of things that in the US come from post-tax salary is handled by the tax (education for you and your kids, healthcare, etc.) 2. Trying your luck as entrepreneur is easier and much lower risk than in the US. It's also quite easy to get "free" entrepreneurial government grants of small to medium sizes. As a result, there tends to be more, smaller startups, and bootstrapping is popular. When VCs aren't involved, salaries tend to be less astronomical. 3. Software engineer salaries in the US are blown completely out of proportions, and too market-distorting to be goal to have. Just moving to where the salary is highest with no other consideration for anything else sounds... Short-sighted, narrow-minded and greedy (but not in a smart way).

coldtea 6y ago

>Salary difference is so large, I would never move. It's not like the EU wants you to move here, in the first place...

fermienrico 6y ago
Not with that attitude!

eek04_ 6y ago

There is a certain total of income for salary available in a country; e.g, the US is spending about 44% of GDP on salaries/compensation[1]. The difference in income for software engineers is partially (and possible mainly) because the US is very income-inequal - ie, because there are more poor people to prop you up. If you look at income inequality before taxes and transfers[2], the US is the most income-inequal of any of the OECD countries. If you look at it after taxes and transfers[3], Chile, Turkey and Mexico manage to do worse. [1] https://fred.stlouisfed.org/graph/?g=2Xa https://fred.stlouisfed.org/graph/?g=2Xa [2] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient,_before_taxes_and_transfers https://en.wikipedia.org/wiki/List_of_countries_by_income_eq... [3] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient,_after_taxes_and_transfers https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...

tester34 6y ago

I have very poor understanding of all of this, but I think that EU tech hubs focus on some ~~bullshit~~ not shiny industries like banking/financials, insurance and generally those very mature.

jerven 6y ago
Silicon valley has the benefit of long term investment and also being a single centre for all of the US market. EU single market is not nearly as well integrated as the US in practical terms e.g. basic language barriers. Decades of "infrastructure and community" is not easily copied else where and is a real advantage for the US. Europe had lot's of "Facebooks" but non grew out of the local market to be able to gain a global advantage. Silicon valley is not easily reproduced elsewhere in the US either.
- throwaways885 6y ago
  If it's about language, then why isn't London a huge tech hub (order of magnitude bigger)? They can sell to the US the same way SV exports back to the rest of the world, no?
  - MagnumOpus 6y ago
    London as a tech hub does punch above its weight, mostly because the language makes for a very deep pool of labour -- people from all of Europe plus Russia/India. Of course that is only half the equation -- better and cheaper labour (than in Berlin or Paris, say) brings you halfway there, but the language barrier for customers in the EU as well as regulatory hurdles still make massively harder to scale to the whole of the EU than to the whole of the US.
  - oblio 6y ago
    London is a huge tech hub :-) And it's not bigger because there are trade barriers between countries, for services. It's far from trivial for a UK company to sell stuff in the US. I imagine the timezone difference also doesn't help.
  - 6y ago

rusk 6y ago

Well based on my recent discussions with a prospective American employer the main reason they pay their staff more is the yawning disparity in healthcare costs ...

i_have_an_idea 6y ago
You can't honestly believe that, can you? Germany - senior software engineer - 45k eur. US - senior software engineer - 240k usd. Do you or the average engineer, over the course of their lifetime, save or spend around 190k usd a year on healthcare?
- hans_castorp 6y ago
  > Germany - senior software engineer - 45k eur. That's utter nonsense. 45K € is the salary of a junior software dev right out of university.
  - alexgmcm 6y ago
    He's taken a low-end salary but take 80k euros or even 90k and his argument still applies.
    - hans_castorp 6y ago
      For a senior dev 90k is the low-end, not the average I would say. But this highly depends on where you are in Germany. In Munich or Hamburg salaries will be substantially higher than e.g. Ludwigshafen or Cottbus
- rusk 6y ago
  I’m just telling you what I was told. I didn’t take the job in the end because some of the clauses in the contract - apparently normal by US standards - were simply astounding.
- yulaow 6y ago
  240k in the whole US? I thought those were salaries of high col areas (new york, sv, etc)

gspr 6y ago

> private healthcare is fine in the US. It's obviously fine for those who have it or can afford it. The argument is not about whether or not Silicon Valley software engineers can live with private healthcare. The argument that we here in Europe tend to make is that every inhabitant of a country is entitled to that excellent healthcare, nomatter who they are.

tootahe45 6y ago
> every inhabitant of a country is entitled to that excellent healthcare This isn't always true.. In some of these free healthcare countries you can be SOL if you get cancer or a rare condition and don't have money for the latest treatments. Here in New Zealand the wait times are so long that a lot of people just pay for private surgery/screening. My father for example was out of work for almost a year waiting for a hip operation, he irrationally thought he was getting a good deal having it publicly funded.
- gspr 6y ago
  > In some of these free healthcare countries you can be SOL if you get cancer or a rare condition and don't have money for the latest treatments. Here in New Zealand the wait times are so long that a lot of people just pay for private surgery/screening. That is indeed a problem. How does giving up and saying "the rich or well-insured can get these things, the poor not" help in any way shape or form?
- c0l0 6y ago
  Tell me then, please, how you fare in these other, non-free healthcare countries if you get cancer or a rare condition and don't have money for the latest treatments.
  - tootahe45 6y ago
    Presumably you'd have a healthcare plan of some sort, one which politicians have mandated over the years to cover practically everything. You might also keep some savings for this thanks to the fear mongering on MSM, whereas it would be rare to do so in a free healthcare country.

mrweasel 6y ago

Software engineers are well paid in the EU, just not overpaid. If you compare even a Danish salary with what you could be paid in Silicon Valley, sure, you're pay less well, that doesn't make the EU salary bad. If you read the complaints from software engineers living in the Bay area, they will tell you that housing isn't affordable. You have well paid people with roommates. The affordable housing isn't in the same areas as the jobs (for the most parts). Honestly the startups could move much of their development to eastern Europe and pay half the salary, while still getting some of the best developers in the world.

oivey 6y ago
Overpaid is really the wrong way to think about it. The wages in SV are driven by companies who are extremely profitable. Lower pay would mean more wealth for executives who are already some of the most wealthy people in the world (absent some systemic changes in the US government). FAANG employees are just getting a piece of the value of what they’re building.
- mrweasel 6y ago
  That's one positive way of looking at it. I guess I'm just a little jaded by reading about Google developers who don't really do much, by their own admission, but who are still paid WAY more than they would anywhere else (Not to single Google out, it's just an example).

kolinko 6y ago

I’ve had friends move from working at FAANG in SV back to Poland, taking 60% salary paycut, citing better quality of life here - especially when children are involved. If you have good public transportation (as in: you can get around faster in a bus than using Uber), good and cheap healthcare, and free public education, you just don’t need as much money to get a better lifestyle. Also: “fine” is a good description of the US healthcare. I experienced both US and European healthcare systems and it’s amazing how much worse is one from another. Even if money is not much of an issue.

piva00 6y ago

The reason is that you are comparing to the outlier: the US. Salaries for software engineers in Europe are high, extremely high compared to the general population in terms of standard deviations. The difference is that salaries in the US are more or less uncapped, that benefits a lot us, software engineers, but not society. For society my work as a SWE isn't worth 3x of a nurse, even though economically it makes sense as I bring 5-10x profits to the company I work for as a SWE, just due to the leverage I can be used as to produce value in monetary terms. If the only thing you care about is the figure in your bank account, for all means the US is the best place on Earth for you to try your luck. For people like me, who want to live a happy and comfortable life instead of grinding and living with the stress of all insecurities caused by the US approach to society... It's not a pretty game to live in that kind of society. I posted not long ago the same type of comment, I have a personal anecdote as I moved from a country that is very Americanised (Brazil) to Sweden, the American philosophy of life (individualistic, "got mine, fuck you") only works in the US, with lavish sums of cash flowing around so some of it can drip into normal society. Living in a completely different environment only showed me how sick this kind of living is, how unhappy it makes the average Joe. Good luck as a SWE in the US, it's a cushy place to be. Personally I still prefer to take-home 1/3 of what I could manage in the US but have a much more stable and comfortable life, because the rest of society here also enjoy a stable and comfortable life together with me.