9 ms·

So when Liz Truss announced tax cuts and there was fire and fury after the news and the pound plummeted I started looking into what these tax cuts entailed. The

So when Liz Truss announced tax cuts and there was fire and fury after the news and the pound plummeted I started looking into what these tax cuts entailed. They were mentioned as giving the "rich" huge tax cuts so I imagined that they would see a tax rate of 50%(on someone making a million or more a year) going to 25% or something irresponsible like that. After finding the actual figures, for some reason these were very hard to find in various news reports, it was a slight drop of 5% (from 45% to 40%) and the "rich" were classified as those making above 150k. In my mind that salary does not make anyone rich, I mean that's a low to mid level engineering salary in the US. Basically almost any US professional (lawyer, doctor, engineer etc) is going to make that or much more. Then I started looking into what does the average British citizen make and found it was incredibly low at 38K. So basically it dawned on me that the UK is a country that pays very low wages which to me is very surprising as houses(flats) in London are extremely expensive. I would love for a UK citizen to chime in, but for me it was a strange realization as I always assumed that people in the UK made more than in the US.

tptacek 4y ago
Based on the number you're citing for the average British salary, you're citing pounds, not dollars. That engineering salary you're citing is, in an ordinary UK economy, more like $225k than $150k (UK comp is also lower than US comp even accounting for currency). $225k is not an ordinary US household income.
- orf 4y ago
  The median US salary is also 31k dollars, compared to 36k dollars in the UK
  - subsubzero 4y ago
    median US salary is $54K, given the pound to dollar exchange that would mean a UK workers average salary should be 47K(pounds) to equal a US workers average, its not even close. https://www.thebalancemoney.com/average-salary-information-for-us-workers-2060808 https://www.thebalancemoney.com/average-salary-information-f...
    - tptacek 4y ago
      You're talking about the current, anomalously, news-breakingly low pound/dollar rate, right?
      - subsubzero 4y ago
        yeah I am, typically its $1.50-$1.25 to a pound.
    - lotsofpulp 4y ago
      But a typical US worker has to pay significant amount of health insurance premiums and has a significant $3k to $10k deductible and up to $17k out of pocket maximum. Assuming the common 70%/30% premium cost sharing for a silver health insurance plan, an American has to pay somewhere around ~$200 per person at the minimum. That is $2,500+ per year for a healthy young adult, and goes up from there, especially for those with dependents who may not even be subsidized by the employer. Although, the quality and quantity of healthcare actually delivered and received in both countries is heavily in flux, making comparisons even including insurance costs quite difficult.
- Johnny555 4y ago
  Based on the number you're citing for the average British salary, you're citing pounds, not dollars There's not much difference between pounds and dollars these days. 1 GBP = 1.14 USD
  - tptacek 4y ago
    Yes. That is a deeply abnormal state of affairs, and not the circumstances under which these salary numbers were set. People should be wary of analyses premised on the pound's current weakness.
dxbydt 4y ago
> UK is a country that pays very low wages Am told "Talent on tap, not on top" is a British expression, not American.
- Moissanite 4y ago
  I also wonder if we are too caught between US and European attitudes to career progression. I perceive people in the US doing better by being talented, but mostly by being able to sell themselves; the more shameless the better. Meanwhile in Europe the perception seems to be "age before beauty", i.e. you get promoted mostly through long tenure, the old fashioned way. In the UK, these two factors come together to create a downward, spiteful pressure on anyone getting too big for their boots - unless they bluster straight past it via nepotism or good old fashioned public school overconfidence.
  - elcritch 4y ago
    > In the UK, these two factors come together And here I thought America had the lead on combining the worst parts of different systems! As in Wall Street loves privatizing profits while socializing risk like happened with the sub-prime fiasco. But the Brit’s applying the strategy to the social strata is next level. Seems us and the Brit’s really do share a common cultural heritage. Well we still got bigger hats. ;)
- pyuser583 4y ago
  “Scientists should be on tap, not on top” has been widespread in the US since it was coined. https://quoteinvestigator.com/2019/01/26/expert/ https://quoteinvestigator.com/2019/01/26/expert/
birdstheword5 4y ago
I work in the UK (not in London) for an American company, they absolutely love us because they get the same work for about a third of the price.
deleted 4y ago
[deleted]
philip1209 4y ago
Some things to keep in mind (as I understand them): - No additional costs for healthcare or health insurance - Some state pension reduces the need to save for retirement - (About) free university reduces the need to save for education (or, to have education debt) - ~39 weeks paid parental leave - 6 weeks of holiday per year is normal - Other social benefits, such as childcare I interpret this as meaning that people don't need to save as much money.
- Nextgrid 4y ago
  > No additional costs for healthcare or health insurance The state of the NHS for the last 2.5 years means that you effectively need to pay private (whether out of pocket or through insurance) if you want any chance at decent, timely healthcare.
- dchesterton 4y ago
  That’s not accurate on quite a few counts. - University is definitely not free, at least in England. Fees are £9k per year. Interest rates are high and you don’t have to pay it back unless you earn over a certain amount so in reality, it’s more like a graduate tax for many, but it’s definitely not free. - Childcare is limited to a few free days a week, often has extras to be paid for and is otherwise very expensive. For those on higher incomes that’s reduced too. - 52 weeks parental leave is for the mother only and is only at statutory pay after 6 weeks (about £150 per week). Paternity leave is 2 weeks at statutory pay. - 6 weeks of holiday is not normal. Normal would be about 4 weeks. - The state pension is £185 per week. Nearly everybody contributes a decent amount to a private pension too.
  - Moissanite 4y ago
    > Normal would be about 4 weeks The legal minimum is 20 days plus 8 public holidays. I don't know anyone in a white collar job who gets fewer than 25 (+8) days off, and in the public sector 30 seems to be the low end.
  - nerdawson 4y ago
    > 52 weeks parental leave is for the mother only and is only at statutory pay after 6 weeks (about £150 per week). Paternity leave is 2 weeks at statutory pay. It used to be that mothers were entitled to maternity leave which broke down as: - 6 weeks at 90% of your average pay - 33 weeks of statutory maternity pay (£156/wk) - 13 weeks unpaid Now parents can opt for shared parental leave, effectively sharing that time off entitlement: https://www.gov.uk/shared-parental-leave-and-pay https://www.gov.uk/shared-parental-leave-and-pay
pavon 4y ago
> Then I started looking into what does the average British citizen make and found it was incredibly low at 38K. There are many ways to define and measure this (mean vs median, pre vs post tax, everyone vs just fulltime), so I don't know if the numbers are directly comparable, but US median earnings are $45K[1], which isn't that much different, especially once you take into consideration differences in government benefits. [1] https://www.census.gov/library/publications/2022/demo/p60-276.html https://www.census.gov/library/publications/2022/demo/p60-27...
- Nimitz14 4y ago
  I see 61k for male and 51k for female for fulltime workers (median)?
jeroenhd 4y ago
I don't get it. Lawyers, doctors, and engineers aren't rich anymore? That 150k, assuming pounds, is a bit under five times the normal median income. Assuming dollars, the same number would be true for the US. UK wages aren't low. You're rich.
- happymellon 4y ago
  Comparing salaries of similar companies, I completely disagree. I'll use Discover Card as they are a financial services company in both the US and UK. According to Glass Door, a Senior Software Engineer with 15 years+ earns: UK: £90-100k USA: $120-140k Even at the top end of finance, with the most experience you will struggle to break the £100k wall in the UK. As someone who has worked software in both the US and UK, you are more likely to find upper management in the US who can see their software as a competitive advantage. In the UK I've seen upper management in fintech startups embrace the advantages, but not in larger organisations.
- clnq 4y ago
  I am a software engineer and I earn £55k. It's about twice the national average. I must live an economy lifestyle to put anything aside - taking care to not heat my home too much, to never eat out, and not buy any luxuries. And on some months when I need private healthcare (as the NHS has collapsed to the point that some urgent appointments have months-long waiting lists) or dental costs, I have to dip into those savings. I'm leaving the UK as soon as I have savings to do so. But it might take a while. I feel a lot of empathy for people earning around the national average salary. I don't know how they'll survive the Winter without using savings or going into considerable debt, especially those who have dependents. I am privileged to at least not go into debt and realistically think about leaving this country.
  - origin_path 4y ago
    But is that a UK thing or not? I worked for a fintech company in London and was earning on the order of £250,000/yr. We had quite a few eng who were earning between £100k-£150k. Admittedly it was a UK/US company - the founders were American and the eng team was almost all in London. But it's not like your salary says something deeply fundamental about the UK, no more than salaries in Mountain View tell you something about the whole of the US.
lhnz 4y ago
What you're saying is basically true: if you're a skilled professional, you'll do much better in the US, than you would do in the UK. US society has even more inequality than the UK. In fact, as a Brit, it was really strange to hear that President Biden disagreed with the UK's tax cuts for the wealthy -- doesn't he realise that the US taxes its rich significantly less than we do? It seemed absurd to me but I felt that he probably realises that it's in America's interest to continue to attract highly skilled workers by taxing them less, and would prefer if the US continues to have a monopoly on this advantage. The average salary in London is higher than £38k, but it's definitely not high enough to buy a property here. You likely need to be making upwards of £150k to buy a house. That is quite possible at a hedge fund, HFT or prop trading firm, but I don't know any other jobs that pay well enough for home ownership in London. Of course, if you have dual incomes and are happy to get a heavily mortgaged flat and live on the outskirts of London then you have more options..
jimjimjim 4y ago
But, you need to take into account people in the US needing to pay for health care, retirement/pension, education, sales tax (although the UK has flat rate vat), tipping, insurance for everything health related especially if it prevents you from working. And house prices in london are like house prices in SF, i.e. not representative of the whole country.
nerdawson 4y ago
How does the cost of flats in Manhattan compare to the salary of the average American? London real estate is notoriously expensive and it's not a practical way to measure wages. The top rate of tax on earnings over £150k (until the pound crashed recently would have been around $200k) applies to roughly 600,000 workers. The UK has a population of 68M. If you earn upwards of £150k, you're rich. > In my mind that salary does not make anyone rich, I mean that's a low to mid level engineering salary in the US. Basically almost any US professional (lawyer, doctor, engineer etc) is going to make that or much more. When your world is tech and you're familiar with the salaries on offer, it's easy to lose sight of life for people who aren't inside that bubble. Your point of comparison is wildly skewed.
- varispeed 4y ago
  > If you earn upwards of £150k, you're rich. This time and time again. Income does not equal wealth. Sure over time you can build your wealth and become rich, but not really if you earn £150k. It takes awful lot of work to get to that level. You are probably be in your 30s or 40s when you start making this much. If you come from working class, then you are unlikely going to have any sizeable assets until then. £150k gets you "only" £7.5k net. If you want to actually enjoy life and fruits of your hard work, then you don't want to live in a flat share, you want to go out sometimes etc. In London, £3-4k rent for a decent home, nothing luxurious is a normal price. Bills, other outgoings probably £1-2k. You also want to save some money for retirement. With that kind of money, you are realistically looking at £2k of disposable income. To put that into perspective - if you put £2k each month into your savings account, it would take you about 40 years to save your first million. This salary is really nowhere near making someone rich. People are often confused, because they see an actual rich person that is making this much money, but they are not rich because they have such a job. They most likely inherited their wealth or they get money in other ways.
  - nerdawson 4y ago
    > Income does not equal wealth. 100% agree. You can have a high income and choose to live beyond your means preventing you from accumulating wealth. We're debating income taxes and thresholds however so that's the metric we have to use. Those on £150k+ are in the 98th percentile.

tptacek 4y ago

Based on the number you're citing for the average British salary, you're citing pounds, not dollars. That engineering salary you're citing is, in an ordinary UK economy, more like $225k than $150k (UK comp is also lower than US comp even accounting for currency). $225k is not an ordinary US household income.

orf 4y ago
The median US salary is also 31k dollars, compared to 36k dollars in the UK
- subsubzero 4y ago
  median US salary is $54K, given the pound to dollar exchange that would mean a UK workers average salary should be 47K(pounds) to equal a US workers average, its not even close. https://www.thebalancemoney.com/average-salary-information-for-us-workers-2060808 https://www.thebalancemoney.com/average-salary-information-f...
  - tptacek 4y ago
    You're talking about the current, anomalously, news-breakingly low pound/dollar rate, right?
    - subsubzero 4y ago
      yeah I am, typically its $1.50-$1.25 to a pound.
  - lotsofpulp 4y ago
    But a typical US worker has to pay significant amount of health insurance premiums and has a significant $3k to $10k deductible and up to $17k out of pocket maximum. Assuming the common 70%/30% premium cost sharing for a silver health insurance plan, an American has to pay somewhere around ~$200 per person at the minimum. That is $2,500+ per year for a healthy young adult, and goes up from there, especially for those with dependents who may not even be subsidized by the employer. Although, the quality and quantity of healthcare actually delivered and received in both countries is heavily in flux, making comparisons even including insurance costs quite difficult.
Johnny555 4y ago
Based on the number you're citing for the average British salary, you're citing pounds, not dollars There's not much difference between pounds and dollars these days. 1 GBP = 1.14 USD
- tptacek 4y ago
  Yes. That is a deeply abnormal state of affairs, and not the circumstances under which these salary numbers were set. People should be wary of analyses premised on the pound's current weakness.

dxbydt 4y ago

> UK is a country that pays very low wages Am told "Talent on tap, not on top" is a British expression, not American.

Moissanite 4y ago
I also wonder if we are too caught between US and European attitudes to career progression. I perceive people in the US doing better by being talented, but mostly by being able to sell themselves; the more shameless the better. Meanwhile in Europe the perception seems to be "age before beauty", i.e. you get promoted mostly through long tenure, the old fashioned way. In the UK, these two factors come together to create a downward, spiteful pressure on anyone getting too big for their boots - unless they bluster straight past it via nepotism or good old fashioned public school overconfidence.
- elcritch 4y ago
  > In the UK, these two factors come together And here I thought America had the lead on combining the worst parts of different systems! As in Wall Street loves privatizing profits while socializing risk like happened with the sub-prime fiasco. But the Brit’s applying the strategy to the social strata is next level. Seems us and the Brit’s really do share a common cultural heritage. Well we still got bigger hats. ;)
pyuser583 4y ago
“Scientists should be on tap, not on top” has been widespread in the US since it was coined. https://quoteinvestigator.com/2019/01/26/expert/ https://quoteinvestigator.com/2019/01/26/expert/

birdstheword5 4y ago

I work in the UK (not in London) for an American company, they absolutely love us because they get the same work for about a third of the price.

deleted 4y ago

[deleted]

philip1209 4y ago

Some things to keep in mind (as I understand them): - No additional costs for healthcare or health insurance - Some state pension reduces the need to save for retirement - (About) free university reduces the need to save for education (or, to have education debt) - ~39 weeks paid parental leave - 6 weeks of holiday per year is normal - Other social benefits, such as childcare I interpret this as meaning that people don't need to save as much money.

Nextgrid 4y ago
> No additional costs for healthcare or health insurance The state of the NHS for the last 2.5 years means that you effectively need to pay private (whether out of pocket or through insurance) if you want any chance at decent, timely healthcare.
dchesterton 4y ago
That’s not accurate on quite a few counts. - University is definitely not free, at least in England. Fees are £9k per year. Interest rates are high and you don’t have to pay it back unless you earn over a certain amount so in reality, it’s more like a graduate tax for many, but it’s definitely not free. - Childcare is limited to a few free days a week, often has extras to be paid for and is otherwise very expensive. For those on higher incomes that’s reduced too. - 52 weeks parental leave is for the mother only and is only at statutory pay after 6 weeks (about £150 per week). Paternity leave is 2 weeks at statutory pay. - 6 weeks of holiday is not normal. Normal would be about 4 weeks. - The state pension is £185 per week. Nearly everybody contributes a decent amount to a private pension too.
- Moissanite 4y ago
  > Normal would be about 4 weeks The legal minimum is 20 days plus 8 public holidays. I don't know anyone in a white collar job who gets fewer than 25 (+8) days off, and in the public sector 30 seems to be the low end.
- nerdawson 4y ago
  > 52 weeks parental leave is for the mother only and is only at statutory pay after 6 weeks (about £150 per week). Paternity leave is 2 weeks at statutory pay. It used to be that mothers were entitled to maternity leave which broke down as: - 6 weeks at 90% of your average pay - 33 weeks of statutory maternity pay (£156/wk) - 13 weeks unpaid Now parents can opt for shared parental leave, effectively sharing that time off entitlement: https://www.gov.uk/shared-parental-leave-and-pay https://www.gov.uk/shared-parental-leave-and-pay

pavon 4y ago

> Then I started looking into what does the average British citizen make and found it was incredibly low at 38K. There are many ways to define and measure this (mean vs median, pre vs post tax, everyone vs just fulltime), so I don't know if the numbers are directly comparable, but US median earnings are $45K[1], which isn't that much different, especially once you take into consideration differences in government benefits. [1] https://www.census.gov/library/publications/2022/demo/p60-276.html https://www.census.gov/library/publications/2022/demo/p60-27...

Nimitz14 4y ago
I see 61k for male and 51k for female for fulltime workers (median)?

jeroenhd 4y ago

I don't get it. Lawyers, doctors, and engineers aren't rich anymore? That 150k, assuming pounds, is a bit under five times the normal median income. Assuming dollars, the same number would be true for the US. UK wages aren't low. You're rich.

happymellon 4y ago
Comparing salaries of similar companies, I completely disagree. I'll use Discover Card as they are a financial services company in both the US and UK. According to Glass Door, a Senior Software Engineer with 15 years+ earns: UK: £90-100k USA: $120-140k Even at the top end of finance, with the most experience you will struggle to break the £100k wall in the UK. As someone who has worked software in both the US and UK, you are more likely to find upper management in the US who can see their software as a competitive advantage. In the UK I've seen upper management in fintech startups embrace the advantages, but not in larger organisations.
clnq 4y ago
I am a software engineer and I earn £55k. It's about twice the national average. I must live an economy lifestyle to put anything aside - taking care to not heat my home too much, to never eat out, and not buy any luxuries. And on some months when I need private healthcare (as the NHS has collapsed to the point that some urgent appointments have months-long waiting lists) or dental costs, I have to dip into those savings. I'm leaving the UK as soon as I have savings to do so. But it might take a while. I feel a lot of empathy for people earning around the national average salary. I don't know how they'll survive the Winter without using savings or going into considerable debt, especially those who have dependents. I am privileged to at least not go into debt and realistically think about leaving this country.
- origin_path 4y ago
  But is that a UK thing or not? I worked for a fintech company in London and was earning on the order of £250,000/yr. We had quite a few eng who were earning between £100k-£150k. Admittedly it was a UK/US company - the founders were American and the eng team was almost all in London. But it's not like your salary says something deeply fundamental about the UK, no more than salaries in Mountain View tell you something about the whole of the US.

lhnz 4y ago

What you're saying is basically true: if you're a skilled professional, you'll do much better in the US, than you would do in the UK. US society has even more inequality than the UK. In fact, as a Brit, it was really strange to hear that President Biden disagreed with the UK's tax cuts for the wealthy -- doesn't he realise that the US taxes its rich significantly less than we do? It seemed absurd to me but I felt that he probably realises that it's in America's interest to continue to attract highly skilled workers by taxing them less, and would prefer if the US continues to have a monopoly on this advantage. The average salary in London is higher than £38k, but it's definitely not high enough to buy a property here. You likely need to be making upwards of £150k to buy a house. That is quite possible at a hedge fund, HFT or prop trading firm, but I don't know any other jobs that pay well enough for home ownership in London. Of course, if you have dual incomes and are happy to get a heavily mortgaged flat and live on the outskirts of London then you have more options..

jimjimjim 4y ago

But, you need to take into account people in the US needing to pay for health care, retirement/pension, education, sales tax (although the UK has flat rate vat), tipping, insurance for everything health related especially if it prevents you from working. And house prices in london are like house prices in SF, i.e. not representative of the whole country.

nerdawson 4y ago

How does the cost of flats in Manhattan compare to the salary of the average American? London real estate is notoriously expensive and it's not a practical way to measure wages. The top rate of tax on earnings over £150k (until the pound crashed recently would have been around $200k) applies to roughly 600,000 workers. The UK has a population of 68M. If you earn upwards of £150k, you're rich. > In my mind that salary does not make anyone rich, I mean that's a low to mid level engineering salary in the US. Basically almost any US professional (lawyer, doctor, engineer etc) is going to make that or much more. When your world is tech and you're familiar with the salaries on offer, it's easy to lose sight of life for people who aren't inside that bubble. Your point of comparison is wildly skewed.

varispeed 4y ago
> If you earn upwards of £150k, you're rich. This time and time again. Income does not equal wealth. Sure over time you can build your wealth and become rich, but not really if you earn £150k. It takes awful lot of work to get to that level. You are probably be in your 30s or 40s when you start making this much. If you come from working class, then you are unlikely going to have any sizeable assets until then. £150k gets you "only" £7.5k net. If you want to actually enjoy life and fruits of your hard work, then you don't want to live in a flat share, you want to go out sometimes etc. In London, £3-4k rent for a decent home, nothing luxurious is a normal price. Bills, other outgoings probably £1-2k. You also want to save some money for retirement. With that kind of money, you are realistically looking at £2k of disposable income. To put that into perspective - if you put £2k each month into your savings account, it would take you about 40 years to save your first million. This salary is really nowhere near making someone rich. People are often confused, because they see an actual rich person that is making this much money, but they are not rich because they have such a job. They most likely inherited their wealth or they get money in other ways.
- nerdawson 4y ago
  > Income does not equal wealth. 100% agree. You can have a high income and choose to live beyond your means preventing you from accumulating wealth. We're debating income taxes and thresholds however so that's the metric we have to use. Those on £150k+ are in the 98th percentile.