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Wages aren't really something you can compare directly, not having to account for hugely expensive random healthcare events, or being able to send your children

by _v7gu 3y ago

Wages aren't really something you can compare directly, not having to account for hugely expensive random healthcare events, or being able to send your children to good schools without dishing out tens of thousands of dollars (or even simply not living in American cities/suburbs) count for a lot. Mobility exists, and as such I'm inclined to believe the law of one price applies to the labor markets due to the fact that neither USA or Europe is completely deserted. It's just about which tradeoffs you are willing to make. Of course, I find USA's situation a bit more unstable because remote work is getting more common. How much is the premium for having people in the same physical location anyway?

FirmwareBurner 3y ago
>I find USA's situation a bit more unstable because remote work is getting more common Why is that unstable?
- _v7gu 3y ago
  Succinctly, remote work enables arbitrage from US wages to EU cost of living. Some of the misgivings of living in US is balanced by the high wages (example: living in San Fransisco vs San Fransisco wages); effectively firms are subsidizing US education costs and healthcare costs via wages (instead of taxes). With remote work being more common, people can start living in lower cost, more tax-subsidized areas while also being qualified for the high wage jobs. After a while, San Fransisco firms might notice that they do not have to subsidize San Fransisco landlords in order to get good developers. They can instead give a little less wages to equally good developers who live in less costly areas. If the wages are depressed enough, living in US might not make sense at all; after all you need to pay for your children's school, have someone drive them everywhere until they are 16, and account for unexpected healthcare costs which are already accounted for in Europe.
  - ffhhttt 3y ago
    Yeah, it’s interesting that many US companies are still only willing to hire people in the US for remote positions when they could probably get more for less if they extended it for Europe. > account for unexpected healthcare costs which are already accounted for in Europe. If you’re a software engineering you’re likely to already have good enough insurance and can save at least 20-50k for any unexpected costs anyway.
  - FirmwareBurner 3y ago
    >Succinctly, remote work enables arbitrage from US wages to EU cost of living. In theory yes, in practice it doesn't look like it's happening. I haven't seen a massive boom of US companies opening up shop in my EU neighborhood. Those who wanted to hire EU workers have been doing it already. Plus, why would San-Fran companies move to Europe when haven't even exhausted all lower cost areas in the US yet? Operating in Europe and hiring here opens up a lot of headaches and liabilities, other than culture and time zone differences, that many US businesses don't like (sick leave, parental leave, taxes, labor laws, more taxes, etc). It's not as easy to hire here remotely as you think. You need to have an legal entity in each EU country if you want to hire in every country, or, the usual M.O., you open a shop in Dublin, Berlin or Amsterdam and hope people from other countries can stomach the housing market and accept to move there, but unlike the US, you can't remotely employee people in an EU country while they live in other EU countries as labor laws, tax and social systems don't easily allow cross-border remote work as every country expects you live and work locally or use the cross border commuter policies but for that you need to live near the border anyway.
ffhhttt 3y ago
> Wages aren't really something you can compare directly You can still account for all of those thing. As far as schools are concerned it’s highly variable in the US. There are certainly some very good public schools just living expenses are also likely to be much higher in those areas. > It's just about which tradeoffs you are willing to make. So a country with highly accessible social services must also have a stagnant economy and unaffordable housing? I don’t really see the link..

by _v7gu 3y ago

FirmwareBurner 3y ago

>I find USA's situation a bit more unstable because remote work is getting more common Why is that unstable?

_v7gu 3y ago
Succinctly, remote work enables arbitrage from US wages to EU cost of living. Some of the misgivings of living in US is balanced by the high wages (example: living in San Fransisco vs San Fransisco wages); effectively firms are subsidizing US education costs and healthcare costs via wages (instead of taxes). With remote work being more common, people can start living in lower cost, more tax-subsidized areas while also being qualified for the high wage jobs. After a while, San Fransisco firms might notice that they do not have to subsidize San Fransisco landlords in order to get good developers. They can instead give a little less wages to equally good developers who live in less costly areas. If the wages are depressed enough, living in US might not make sense at all; after all you need to pay for your children's school, have someone drive them everywhere until they are 16, and account for unexpected healthcare costs which are already accounted for in Europe.
- ffhhttt 3y ago
  Yeah, it’s interesting that many US companies are still only willing to hire people in the US for remote positions when they could probably get more for less if they extended it for Europe. > account for unexpected healthcare costs which are already accounted for in Europe. If you’re a software engineering you’re likely to already have good enough insurance and can save at least 20-50k for any unexpected costs anyway.
- FirmwareBurner 3y ago
  >Succinctly, remote work enables arbitrage from US wages to EU cost of living. In theory yes, in practice it doesn't look like it's happening. I haven't seen a massive boom of US companies opening up shop in my EU neighborhood. Those who wanted to hire EU workers have been doing it already. Plus, why would San-Fran companies move to Europe when haven't even exhausted all lower cost areas in the US yet? Operating in Europe and hiring here opens up a lot of headaches and liabilities, other than culture and time zone differences, that many US businesses don't like (sick leave, parental leave, taxes, labor laws, more taxes, etc). It's not as easy to hire here remotely as you think. You need to have an legal entity in each EU country if you want to hire in every country, or, the usual M.O., you open a shop in Dublin, Berlin or Amsterdam and hope people from other countries can stomach the housing market and accept to move there, but unlike the US, you can't remotely employee people in an EU country while they live in other EU countries as labor laws, tax and social systems don't easily allow cross-border remote work as every country expects you live and work locally or use the cross border commuter policies but for that you need to live near the border anyway.

ffhhttt 3y ago

> Wages aren't really something you can compare directly You can still account for all of those thing. As far as schools are concerned it’s highly variable in the US. There are certainly some very good public schools just living expenses are also likely to be much higher in those areas. > It's just about which tradeoffs you are willing to make. So a country with highly accessible social services must also have a stagnant economy and unaffordable housing? I don’t really see the link..