Well, a number of people use Eastern Europe location as a filter for 'cheap labor'. And SV startups tend to have crap wages to begin with, but offer equity to compensate. I could imagine a few startups seeking to crimp further.
> Meanwhile no developer in my country even responds to offers if the salary is not given ... before the interview
Posting salaries is rare in the US. It's becoming the law in California, but this is hardly universal. There's an expectation that you'll negotiate, but they're really hoping you won't. And plenty of US engineers assume if you don't post a salary, it's because the budget for the position is low.
Citation needed on that. I really hope you’re right and I’m ignorant here, but I think you may be confusing it with the recent state law that makes it illegal for prospective employers to ask about salary history and theoretically requires them to give a salary range to an applicant when asked. I say “theoretically,” because there’s no way for anyone outside the company to verify that the salary range they give is in any way related to the budgeted range.
It's particularly hilarious when you realise that some eastern Europe places outsource to the US Midwest because it's cheaper....
Thanks for the idea. As East European I'll use this opportunity to improve my English speaking skills (on the phone).
Very well written and exposes the brutality and destruction resulting from focusing on short term profit at any cost.
>...wages were artificially lowered — an estimated $9 billion effectively stolen by the high-flying companies from their workers to pad company earnings — in the second half of the 2000s...
All these firms settled for a measly $334 million to make this problem go away, despite damning evidence.
However, such actions are also detrimental to sustainable/thriving business. So smart people find more constructive and humane ways to be profitable. The book ends on a high note and carries the potential to help leaders correct course before self destruction.
Well, here in SV, everyone kinda knows what other companies pay. You just didn't have friends in SV to tell you before the interview how much that company pays.
In general, there are top-tier companies, FAANG + Uber + Lyft + AirBnB, that pay X. Then there are lower-tier companies and startups that pay roughly X / 2. So, you're unlikely to get FAANG total comp at a no-name startup.
You have crafted a strange model. What are the upsides to such a system, to you, the employee?
You get to learn first-hand why being a non-founder at a startup is almost always a bad deal in terms of compensation.
happened to me in Italy, about same script. salary expectations set from the start, two phone and two on site interviews with stellar feedback then they offered 2/3rd of current total comp.
like, thanks for waiting me three vacation days.
> they don't trust candidates
...which is a great tell for what kind of relationship you would be starting if you did take the offer.
The way it's supposed to work is that you and your employer (who represents the capital) generate a return from your joint venture.
But the actual return is hard to predict. And there is no fair and obvious way to divvy up the return. So it comes down to negotiation power.
There also may not be any condition where you and the capital agree to join. The capital may have better options to generate a return and you may have better options to get a salary.
How about x% of average revenue per employee. Usally around 100k to 300k. So ARPE minus expenses = average salary.
Probably around 60k to 70k for most companies.
This particular scheme means you are paying janitors as much as people who went to school for a decade or more. Some people would not find that equitable and fair. Few academics would find that offer competitive.
And depriving the executives of large salaries also means you are increasing the incentive for corruption. If somebody has the power to squander a billion Dollar, you better pay her more than 100k.
And you forgot to include capital gains, or you included it with expenses. Whoever owns the equity will want some return, otherwise they will invest elsewhere (or not at all).
It was a problematic company from the get go. I was cold called and the recruiter was very insistent. Their engineers were very unprofessional during the technical interview and complained A LOT about technical debt left by past co-workers during the interview.
Now, when I tell recruiters my minimum salary I refer recruiters to Glassdoor, just in case they doubt me.
They didn't actually give me any answer until I asked them to give me one - then they said my attitude with the top management made it clear I wasn't a good candidate for the position.
Dodged that bullet.
IMHO it should be irrelevant. The question is, what is the market rate for someone w/ your skills and experience?
The inevitable result of that is the people making bank will be sure to tell you, and ones making low salaries will not. The employer will therefore still know if you're making above or below the usual salary.
Businesses don't like risk (just like employees don't) and hiring a new person poses a lot of risk. It's expensive, and the employee may not work out at all. The more risk there is in hiring someone, the lower the salary offer will be to compensate. Salaries are a proxy for one's value when hiring. Removing that piece of information increases risk, and hence will lower the salary offers.
Thats still way better than being forced to give an exact number. Now the employer has to kinda sorta guess. Instead of getting underpaid by 30%, you might only get underpaid by 20%.
Also, if you wind up getting a salary that's more than you produce for the company, you'll be first in line to get laid off.
An employees current salary is only barely correlated with a employees skill. They have a multitude of other, much much better factors that they can use to determine if someone is a "risk" or not.
> Also, if you wind up getting a salary that's more than you produce for the company
You are describing something that is close to impossible to measure, for the vast majority of situations. A company does not go around making exact measurements on programmers, and thinking to themselves "Is this person *really 18.2% more effective than the lower paid employee?".
Thats just not how it works. Instead, a person might be 3 times more effective, or half as effective, as the other employees, and salary will be almost entirely unrelated to how much they "produce", which can't really be measure very well anyway.
And this is without even getting into more complicated things, such as sunk costs, and the replacement costs. IE, you may be 10% less effective, but the costs to replace you are equal to 6 months of your salary, so in reality, it makes zero financial sense to do so.
And finally, you are ignoring the fact that an employee can just lie about their previous salary, and there is basically nothing the employer can do about this. I have never, in my life, had someone demand my tax returns, or call up a previous employer to verify my salary, and in many places this can even be illegal. I can just lie about my current salary, and easily get away with, as I have done so multiple times in the past, as well as has many other people that I know.
You're not fooling employers, they likely know you and your friends are lying, and discount the offer accordingly. Try bringing a paystub next time, your prospective employer will appreciate it. It's worked out well for me.
There have been some high profile cases of people who've worked for decades for a company, rose to the top echelon, and were discovered to have lied on their resume. They were out the door without their severance package.
It's worked out pretty damn well for me and my friends, actually. I've gotten multiple 25% raises, each time by doing that. (Along with a healthy dose of job hopping)
> were discovered to have lied on their resume
I've never lied on my resume. Only about salaries, while talking to someone in negotiations.
That's just how the negotiation games goes. The employer makes blatant lies all the time in negotiations, also.
For the record, I've gone from a starting salary of 100k, when I just got out of college 6 years ago, to where I am today, which is 270k total comp, at a big 5 tech company.
I am pretty happy with those results. Especially so, because I've only ever considered myself to be an average engineer.
Or are you going to try and flatter me by saying that I could have been doing even better than going from 100k to 270k in 6 years? Perhaps. But I'd hardly say that I haven't done alright for myself.
I've heard such justifications for submitting fraudulent college applications, cheating in college, doping in sports, etc.
I've done significantly better than my peers with salaries, without lying about it.
Remember that fable about Steve Jobs' dad painting the back of the fence that no one would ever see? My father once told me that honor is what separates men from animals. Honor is what you do when nobody is looking. How much is your honor worth to you? I'm no saint, but wanting my father to be proud of me is worth a lot to me, even though he's passed away.
Thats great. But the other strategy, of engaging in successful negotiation tactics, has also worked out quite well for me.
So it seems like the strategy can be successful.
Actually if you work a while and are lucky enough to have done well, you may want to pick a place to work for reasons other than it has the highest salary. In that case you may not want to advertise your salary history because it can scare away employers. It shouldn’t but it does.
Then again if it's illegal to find out, how will they check if your lying or not?
There are obviously problems with a reliance on salary as a signal of quality/value produced. But I don't understand the impulse to pretend that there isn't nontrivial signal in a previous salary.
That was them just warning you: "Dude you won't hear it fom HR and I am not allowed to tell you directly but you most likely don't want this job."
In Germany, I had salary negotiation closer to what I was used to in the US (e.g.: two competing offers, etc).
In Denmark, very little room to maneuver. I had no luck negotiating salaries in big corps here (Final comp in DK mostly from salary). Every attempt I made to initiate a salary discussion/negotiation seemed to make the hiring managers uncomfortable as in “we don’t do this here”..
About the only thing I could see you getting in Denmark is a cost of living raise or maybe something to the whole department or team.
Some EU countries have a much stronger emphasis on sectoral bargaining. (Often there's a formal mechanism for everyone to work together to negotiate more pay)
It varies much more than the American one does.
I hope that helps!
For example, I used to work for a big company in Denmark that has a sattelite office in Bucharest.
It is questionable to see that even the equipment the developers get there was subpar. The fulltimers there were treated as contractors (e.g.: no career incentives), expendable (high turnover).
The office just existed because when the company was smaller and needed more than now cheaper labor, they made it so that remote managers could be there as a proxy.
Joke aside, what you said above also applied in my case to my ex German employer in Eastern Europe. We got cheap machines with half the specs of the German counterparts but the management in The Mother Land expected the same productivity as the German colleagues.
Now, having migrated West to Austria(similar culture to Germany) tings don't get better an all accounts, even if you speak German. Sure, now you get nicer machines, and even if you manage to negotiate a salary close to local levels, your career development opportunities are close to zero as management will only propose the locals for promotions and trainings as those are the guys managers spend their lunches and cigarette breaks with, even if they're mildly incompetent. You'll be left as that guy who just needs to sit as his desk, do what he's told and be grateful to his masters he's been given a job as if you're coming form a country of goat hearders.
This horrible discriminatory culture in EU countries is not something the EU can't fix unfortunately and it's one of the reasons countries like Germany or the EU as a whole will never catch up to the US on innovation or salaries in tech.
I am not in a stage of life for pursuing promotions to give more anedata on that, but I can see that a lot of senior managers here in Denmark are not immigrants. I do see however that there is a wave of immigrant founders here. Let’s see if the economic environment will perdure long enough to see a greater change.
Poland takes second place with an overall score of
5.5/10. The carbon dioxide emissions in poland are
7.63 tonnes per capita per year, which is higher than
the winner Turkey. The concentrations of PM2.5 are 22
µg/m3 which is almost half of Turkey’s concentrations.
There are 69 deaths attributable to air pollution per
100,000 capita per year. Poland consists of 30.8%
forest area and 38.10% protected terrestrial and
marine area. Each year, the citizens of Poland discard
304.9 kg of waste per capita.
From your own quote: Poland, second place (over all)
World Atlas has them at #3 https://www.worldatlas.com/articles/cities-with-the-worst-ai...
So your $5K after taxes wouldn't even register on my radar.
5000€ is $5623. You can maintain a "normal" life standard around here for about $800 (renting a studio / two room flat in the city centre + all the expenses, no car but I never needed one - the subway takes me to the furthest parts of town in 25 minutes, walking to work is not unusual). So you're saving more or less 5000$ every month.
How much do you have to earn in SV to rent a place for your own next to your office and still save 5 grand a month? :)
Anyway I get your point and in general yeah, US salaries are of course on a whole new level and I won't even argue with that.
I'm not trying to say Warsaw is better for programmers than SV because it never was and never will be - yet we still managed, within last 5 years or so, managed to do something you somehow can't do - we trained HRs, agencies, recruiters etc. And they willingly act as we please. Because there's an incredibly high demand for programmers and no one has time for games like US companies play. And I still can't wrap my mind around this - if company Y or X is so desperately seeking for employees and pays them bazillions of dollars - why they even consider burning so much time on the process of hiring? Hiring is hard, I get that, but it's much easier if you disclose the salary. And in Poland right now hiring is impossible if the salary is unknown. And it's not even required by law (though it is supposed to be).
It's a leverage thing. Companies in high cost of living locations can just wait for someone else and they will. That doesn't work in a low cost of living locations, since their isn't much urgency from the perspective of the applicant.
After 10 years of experience, you are looking into buying a house. Granted, the price of the house is exhorbitant compared to its size, but that's the market.
The salaries are also low in my opinion. At just under 4 years experience I'm making 225k yearly in TC, over 170k of that is salary.
A potential cause for this effect might be that widespread bargaining reduces a market's efficiency, since prices are less transparent for buyers and sellers.
If you want a nice 1BR apartment ($3000) + a very generous budget for monthly expenses ($3000), you need to earn $11000 after tax to save 5 grand a month - i.e $132k a year.
A total compensation of $200k as a single person gets you that much after tax: https://smartasset.com/taxes/california-tax-calculator#BKf2k...
Take a look at these sources to see what top companies are paying software engineers in SV (spoiler: it's more than 200k, and you can add ~60% of each dollar above that to your savings):
(How to use asterisks here?)
This is all gross, pre-deduction salary; not salary net of taxes, deductions, etc.
There is a Unicode small asterisk: ﹡
And some other variations: ∗ ＊
If you surround an asterisk by spaces it works fine: a * b * c * d
According to Numbeo living in SF is about 2 (groceries) to 5 (rent) times more expensive compared to Warsaw: https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
A 7 weeks holiday allowance has more than a monetary allowance.
The (many) issues with US health care do not affect upper/middle class professionals.
From a "patient perspective", as long as you are employed as a software engineer in SV, health care is not a concern at all (insurance is covered by the employer). If anything, it is superior to anything I experienced in Europe.
The issue in America is essentially that the system is paid by piecework. So the entire system optimises for the number of tests/procedures/operations etc. that can be performed. And that might not be so bad in and of itself, if 21st century medicine was reliable. But it's not, and the sad truth of the US system is that many of the (very expensive) procedures it performs have worst outcomes than leaving the patient alone.
In the Netherlands, a patient should not expect from a doctor to conduct any tests at all. I had no experience with the Dutch healthcare myself, but I've heard horrendous stories about it, for example how Irish expat went to a doctor with a problem of pain while swallowing, received nothing more than an advice "well, swallow less, then" (like in a bad joke about doctors), went home to Ireland a got diagnosed with a throat cancer there.