

Ask HN: Why are IT salaries so much lower in Europe than in the US? - moezhart

I noticed that there is a huge gap between IT (specifically, programmer) salaries in the US and European countries like Germany.<p>While I don&#x27;t have hard data to back this claim up, there are some examples: 
Average salary for IBM Senior Consultant in USA: $97,865 [1]
Average salary for IBM Senior Consultant in Germany: $83,820 [2]<p>If one believes in the market adjusting the prices the only explanation is that there are more programmers or less jobs in Europe than in the US. Certainly there is no lack of complaining about shortage of IT workers in Europe. Any other insights?<p>[1] http:&#x2F;&#x2F;www.glassdoor.com&#x2F;Salary&#x2F;IBM-Senior-Consultant-Salaries-E354_D_KO4,21.htm
[2] http:&#x2F;&#x2F;www.glassdoor.com&#x2F;Salary&#x2F;IBM-Senior-Consultant-Germany-Salaries-EJI_IE354.0,3_KO4,21_IL.22,29_IN96.htm
======
w_t_payne
Yup. Moving from the US back to the UK, my salary took a hit from $110k down
to $70k.

My guess (and this is no more than a guess) is that the difference is
primarily cultural.

There is an acceptance in the US that technical skills are a core part of
value creation, and as a result developers tend to be more tightly integrated
into the "business". In a mild feedback loop, this in turn causes US developer
culture to orient more towards the business, to the extent that developer and
management roles and responsibilities start to overlap. (I am, of course,
generalising. My experience is with the NYC startup scene, and so is not
likely to be generally applicable).

By contrast, the boundary between the front and back ends of the business is
more distinct in the UK. In part, this is due to the slightly more
introverted/passive/geeky technical culture in the UK, which tends to reduce
the involvement of technical staff in the management process. In part, it is
also due to the attitude of the "business" \- which tends to value the sales
process as the key part of value creation - with technical staff tending to be
seen more as an overhead than as the engine of the business. In extreme cases,
this can manifest itself as an extremely derogatory attitude towards
developers. "Glorified typists" was a phrase that I came across once -
although fortunately this is a rare extreme.

So, my guess is that IT salaries are lower in Europe than in the US because
developers in Europe have less autonomy and are less integrated into business
decision making, partly as a result of an introverted and passive developer
culture, whereas in the US, greater interaction between developers and
management drives an increased perception of the value of technical skills,
and a greater role in business decision making.

~~~
codegeek
"developers in Europe have less autonomy and are less integrated into business
decision making, partly as a result of an introverted and passive developer
culture, whereas in the US, greater interaction between developers and
management drives an increased perception of the value of technical skills,
and a greater role in business decision making."

To an extent, this has been my experience as well since I work with many
globally distributed teams across US, Europe and Asia as well. It is probably
not fair to generalize this but I have always noticed that developers in the
UK/Europe tend to focus only on the actual code "what" is required and when it
comes to any decision making, they usually do not have much say (whether
voluntary or because of management structure). In the US however, developers
are a lot more involved in management discussions and decision making. Again,
I would be careful not to generalize this.

------
kohanz
The average paid time off in Germany is about 30 days, whereas it is about 12
days in the US. That's something to factor in as a difference. I would happily
take the extra time off over the $.

~~~
kthon
Is 3 paid weeks of vacation really worth $14,000 to you?

~~~
kohanz
18 days is more than 3.5 weeks of paid vacation. You also have to consider
that the additional 14k will be taxed at a high marginal rate. You won't see
14k of that money. Less than 10k more likely (perhaps far less).

So the question should be "Would you trade less than 10k of after-tax income
for 3.5 weeks of paid vacation?"

If my alternative is a paltry total of 12 paid vacation days per year?
Definitely. I have a family that I want to enjoy life with. An 80k salary is
more than enough to live comfortably in my neck of the woods.

In general, I've found that North American employers will give you a raise
much faster than they'll allow you more paid time off.

~~~
kthon
$14k/3 weeks = about $4600/week. That is equivalent to a salary of $230k.
Better to take the higher paying job and just take some time off unpaid.

~~~
kohanz
That's a fairly hyperbolic calculation. The difference between $98k and $84k
is not really life-style changing.

On the other hand, if you can find a North American employer that gives you 12
days of paid vacation days off and you somehow get them to agree to give you
an additional 18 unpaid days off a year, you've done quite well. I don't think
it's a realistic scenario for a non-contractor.

------
ig1
The difference between the two salaries is less than the currency variance
between EUR and USD in the last 18 months.

------
mynewwork
You say "IT" but then programmer, which is typically a job in R&D, not IT.

Are your data sets comparing apples to oranges? If you're looking at IT
salaries in one place (network admins, db admins, help desk) and R&D salaries
in another (software engineers, QA, product managers) you could easily get
different results.

I'm aware that the UK tends to use "IT" for all things computer related, so it
seems very easy to get mixed data when crossing the atlantic.

(Most likely the differences are due to the many differences in taxes,
holiday/vacation, ability to hire & fire, etc between countries).

------
Irishsteve
I checked this out for the same type of role in Bay Area and London.

There was no difference when you take tax,rent and holidays into consideration
(10 - 15 days vs 25 - 28)

This didn't include any bonus / equity / perks

------
johnward
As an IBM Managing Consultant I would say don't trust those numbers.

~~~
moezhart
In which way do you think they are wrong?

~~~
johnward
US salary is high

~~~
johnward
Actually according to glassdoor I'm probably just underpaid.

------
zmic2
Socialist systems keep wages average. Extreme case is Belgium. I'm a
proficient software developer with a college degree. I make about 500
euro/month more than a cleaning lady.

~~~
ldng
I have a hard time believing you since minimal Belgium legal wage is around
1200 euros / month before taxes. And software developer is hardly a blue-
collar job. Either you work part-time or your being exploited. You're trolling
and you know it, HN is not Reddit so please stop.

------
axeny
Supply & Demand

~~~
w_t_payne
There is a _lot_ of friction in the employment market, and market participants
are a long long way from rational actors, so labour arbitrage does not really
work like it should, and supply & demand economics only really applies in
extremis, over extended periods time.

As a result, price discovery in the employment market is extremely inefficient
- and tends to be set using cultural and cognitive biases; perceived value;
and so on, rather than with rational market considerations.

Many employers simply follow the herd when setting salaries - offering the
median of what everybody else in the marketplace offers - or they will set a
salary that is in alignment with their cultural preconceptions of "value".

On the other side of the fence, it is rare to find a developer who will
negotiate for a higher salary, or reject a job offer choosing instead to wait
for a better role to become available, a factor that tends to reduce the
effective "liquidity" of the jobs market.

So, it is entirely plausible that salaries spend a long time stuck far far
away from the equilibrium point that they would reach if supply/demand
economics really did rule the jobs market.

