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Ask HN: How to increase SWE salaries in Europe?
392 points by euengthrowaway 12 days ago | hide | past | favorite | 943 comments
It is often mentioned that Software Engineer salaries in Europe are significantly lower compared to US salaries, even adjusting for lower Cost of Living.

The consensus on why that is seems to be: * Individual contributors in Europe are not as valued as much as managerial professions, due to cultural/historical reasons

* Salaries in the US are skewed due to the presence of FAANG companies and VC money, which inflate salaries through the large amount of capital they inject in the system

* Europe has less freedom of enterprise (debatable), is in general more risk averse, and has a less dynamic job market (more difficult to fire lower performers), which results in lower wages to compensate for these factors.

Reasons aside, how can the European tech job market become more competitive?






I got my higher education for free. I expect to save nothing for my children or their education. I expect to have to put aside very little for retirement.

The thing is, I just can’t find an argument why I should be able to get very rich doing my job. It’s a comfortable job. It pays a good salary. I got here by taking no risk at all. I wouldn’t want to switch jobs just to drive up my pay even if I could. I have other things to think about. I have worked 20 years in the same job and so have my colleagues. This is a cultural difference I feel.


A lot of folks here are calling out the lower pay for SWEs in Europe and Canada as a failure - but also praise the low wealth inequality and low income inequality in Europe and Canada.

You can't have low inequality by definition if you decide to start paying one group a ton of money.

Well, this is a lot like the housing conversation in the US. "I want my house to go up in value, and be a great investment!" Also: "Why can't I afford a house?"

You can't have your cake and eat it too.

It's not necessarily a failure, it's just a different place to draw the line on social contract. While individual contributors earn less the social safety net also makes it much easier to found and grow a business without the threat of death and guarantees a peaceable minimum standard of living. It's also worth pointing out that salary, especially at high seniority levels, becomes a smaller and smaller part of total compensation.


Paying laborers more does not lead to the kind of inequality we see.

"You can't have low inequality by definition if you decide to start paying one group a ton of money."

Very few of even FAANG-level salaries are high enough to put them in the same bucket as the people who wield power through their wealth. Paying the entire field of SWE laborers even 50% more salary is not going to appreciably change the inequality gap.


Are you sure about that? Sure, not the top elite, but there's still a significant gap between upper middle class and lower in for example Sweden, which I believe is one of the more equal countries. FAANG level salaries would significantly widen that gap.

Agree with this take, being in the upper 10% of salaries in Sweden gave me perspective on how wide of a gap there is between myself, some friends working other office jobs (accountants, architects) and some in more blue collar work. I don't feel like I deserve a much higher salary than what I have for this society, I'll be honest and say that sometimes I feel ashamed of earning so much more than some friends given that my job isn't really that important for society.

Oh yes, familiar. I'm in Sweden, I definitely make good money by Swedish standards, and also have excellent benefits through work. This is, frankly, not proportionate to the value I provide to society. I work on some nice software that certainly adds convenience to the lives of many people in multiple countries. But it's by no means critical, and I generate less value for society than anyone working in healthcare, than competent teachers, and than many other workers who make significantly less.

Plus my job is safer and more comfortable than many others. I sit in my office, I think and I type. Unlike the emergency services, I don't risk my life or health, nor does anyone's life depend on my work. Unlike construction workers, assembly line operators and many others, my office environment is free of hazards.


I agree with this, although it's worth highlighting that sitting at a desk all day isn't "risk free" in terms of ones health.

Being from the Netherlands, I recognize this shame. High positions in the workforce are often shamed, talked about as "easy money", as if it's inherently corrupt, people don't acknowledge their risks and responsibilities. Whether that warrants those high salaries or not, I'm not commenting on that debate. Public functions or private organizations in which the government invests, must cap salaries at what the prime minister makes, which is "only" around 200k euros, a fraction of what american CEOs make. This includes public television talent; imagine your US network television nightly news anchors being capped at 200k. (I understand those are private, just making the comparison because they're the highest watched shows in either nation. Private television in the Netherlands is not subject to the cap, but also has not the highest ratings.)

Now that I live in the USA, I've never heard anyone talk like that about a successful CEO. Envy yes, aspiration too, admiration yes.


And yet Netherlands has the highest wealth inequality in the world (https://en.wikipedia.org/wiki/List_of_countries_by_wealth_eq...) so one could interpret this cap and the cultural attitude you described as pretty much a scam by the capital owning class to maximize their returns.

Yep. I also never understood why Europeans focus so much on income inequality ("OMG, programmers and managers get paid too much, tax them more!") and not wealth inequality where old, established families can keep rolling their wealth from generation to generation nearly tax-free and see their assets apreciate substantially while the working class bares the brunt of taxation and are getting squeezed every year more and more by wage stagnation and inflating real-estate prices.

It's a real mystery to me why people aren't up in arms about wealth inequality instead but I guess as long as the working class is provided with a minimum of comfort (food, shelter, healthcare, education, sex) and are kept busy with the ratrace for the next big career move during the day and with an endless stream of available entertainment and consumerism in the evening, they're too busy to notice, care or bother to do anything about it.


Yes exactly. People get up in arms about things they are told to get up in arms about. Many people either don't know how much of Europe's wealth is concentrated in old families, or don't care because they're not told to care.

For example, BMW. It is simply ugh. At least with US companies you know they'll do right by shareholders for better or for worse. If you invest in a German company you might as well be pissing your money away because they'll always do what's right for the heirs.


> It's a real mystery to me why people aren't up in arms about wealth inequality

You have quite a few Dutch political parties talking about this, PVDA, The green party, the socialist party etc. The socialist party (SP) actually suggests giving all employees shares in the companies they work for. But these left wing parties, while not unpopular, have the whole ultra capitalist system working agaisnt them. What can the SP do if their legislation simply causes business and the rich move to another company? It's an impossible battle. You need international cooperation for it to work, and there is no such cooperation.


That's one of the saddest things about extremism. People get disenfranchised by their existing leaders. Then they are desperate for new political blood because they don't understand the underlying problems. Clueless people who promise exactly what you want to hear start leading parties and fight the wrong battle.

Income inequality is driven by wealth inequality. The wealthiest people don't get compensated in dollars, they get compensated in equity and if that equity is going up, companies can afford to pay more to their executives.

Wealth inequality is driven by domestic economic demand shifting away. It is either concentrating in a few economic hot spots (urbanization), moving to other countries (globalization) and through central bank money that sits around in asset markets. There are probably lots of other factors but they are increasingly less impactful.

Urbanization is not necessarily a bad thing if there is enough housing and people can move to the new location, except not enough housing is built and existing residents hate the new arrivals.

Globalization is not necessarily a bad thing if it also drives foreign demand. Turns out, the Chinese really love buying foreign real estate but nobody is building the luxury apartments they want. So they have to buy less luxurious housing and drive up prices in the middle and affordable segment of the housing market.

Central bank money is not necessarily a bad thing if the money is used effectively. The government can help the economy by providing cheaper funding to companies during bad years when there is lots of work to be done. But what if the economy isn't in a bad year and merely refusing to grow? It means that there is already enough funding but not enough demand for services and workers. In that case you also have to apply the government stimulus on the demand side as well. But that's not what central banks do. They can't do it by definition because that's not their responsibility. The central banks are separated from the rest of government because the government can just abuse it's money printing powers to fund endless debt and cause hyperinflation. However, when it's the central bank that is doing the endless printing people don't seem to care, somehow most economists care even less and will assert that even moderate demand side stimulus will eventually lead to the slippery slope of hyperinflation.

Ultimately history will just repeat. A war is a quick and easy way to get rid of excess workers. It is also a quick and easy way to provide demand side stimulus in a political environment where more sensible options are considered impossible. It's like political capital is like money. Once you have run out you are going to be extremely desperate and are willing to do anything no matter how stupid. Running out of political capital is the reason why Keynesian gold digging is even a thing in the first place. All good options have been exhausted, anything that follows is batshit insane but it is also the only thing that can be done.


Well taxes on the rich are not low in NL, so it's not a scam. The current asset bubble just distorted everything in a bad way, and finding new taxes on wealth is hard since wealth flees very easily. But I agree wealth inequality should be talked about more than income inequality.

British, for contrast. I attribute most of my success to luck. I was born with aptitudes, in a stable family, white male. I'm definitely not worth what I'm paid from a societal point of view. I find the idea of being multiple times the median wage for chilling in front of a computer solving puzzles bizarre.

The idea of talking about money is slightly awkward anyway, and I guess I'd say embarrassed rather than ashamed? Different culture and motivation, but a datapoint for you :)


Interestingly while income inequality in Sweden is fairly low, wealth inequality there is one of the highest in the world and higher than in the US (https://en.wikipedia.org/wiki/List_of_countries_by_wealth_eq...)

I'd guess that this is similar to the Netherlands, where it is primarily a function of household debt, and many households having negative net housing equity. [https://ec.europa.eu/info/sites/info/files/economy-finance/e...]

The wealth inequality gini coefficient is not very useful and misleading. You could have a country where people choose to take on debt when they are young, and all of them end up with the same higher level of wealth later in life. This would be a very equal society, but could have a very high wealth inequality gini coefficient. To actually judge the wealth inequality of a society the analysis should be done cross-sectionally, comparing within age cohorts. [https://www.sv.uio.no/esop/english/publications/articles/201...]


Yes, I am quite sure. The typical FAANG developer is not earning $200k base and $200k RSUs per year. It's more like $130k - $180k and maybe $80k to $150k RSU. You have to be pretty senior to reach top 5% income at FAANG in the US--it isn't as common as HN would have you believe.

And as I've noted in another comment, top 10% doesn't put you in the same socioeconomic class as the actual wealthy (https://www.investopedia.com/personal-finance/how-much-incom...).

There's a gap between FAANG and, say, a janitor's salary; that's just not debatable. The gap is much smaller than between Mr. FAANG and Mr. Top 5%, and for all intents and purposes Mr. FAANG is Mr. Janitor when compared to Mr. Top 1%. That some FAANG employees are in the top 1% doesn't negate this.


I guess it all comes down to which unequality we're talking about. Sure, if does not significantly affect the difference between the very top and the rest. But there are a lot of differences between different brackets from the ones at the bottom up to 99% too.

Those differences between the lower brackets exist more because of the power those in the top have. Raising incomes of those in the lower brackets might increase the gaps between some of them: but those gaps are much smaller than between any of them and the top.

They do? How can you be so sure there are causation between the two? Lessen the gap between the 99% seems to affect the general consensus (since 99% share a more similar type of life and experience status /money wise), making it easier to change the rules for the top 1%.

To me this feels like falling into perfect is the enemy of great trap. Just because this topic might be affecting you (assuming you're a software dev), and because it doesn't affect the top 1%, doesn't make it smart to widen the gap between the 99%.


Not really true. Being a dev in sweden does not put you in the mid-upper class (lawyers, doctors, footballers, celebrieties, bankers, management consulting)

FAANG salaries would help close that gap.


In Ireland, software developers with similar levels of experience earn significantly more than doctors, lawyers, management consultants and most bankers. There's only a tiny number of footballers, celebrities, bankers, and non-software consultants who earn more than the software developers as a class.

Except I wasn't talking about Ireland which has low taxes and high wages for sw devs compared to continental Europe.

I like Germany for an example. The top tax bracket (Spitzensteuersatz) is 42% and is reached when you earn a laughable 57k€ a year, something that will never allow you to afford an apartment in a city for a family. The next higher tax rate is 45% for income above 279k€ a year (Rich tax). Source: https://einkommensteuerrechner.com.de/Steuersatz.php

And then the German finance ministry keeps trying to squeeze blood from the turnip even further every year by dreaming up new taxes, while actively discouraging investing (Olaf, the finance minister, claims not to invest in the stock market and keeps his money in a savings account while at the same time pushing negative interest rates) with Transaction taxes and no tax-advantaged savings account. You could consider that maybe conservative Germany encourages investment in real estate. Nope, you get to pay 6% sales tax and 1% notary fees when you buy a home, with no breaks for first-time home buyers, and you can't write the interest off on your taxes either.


Ireland does not have low taxes for individuals compared to continental Europe.

Even compared to Sweden, personal taxation is comparable for high-earners, although Ireland's much more progressive and redistributive scheme results in lower taxes for low-earners, and thus a smaller tax base.


I can tell you that I’m a not terribly highly paid software dev (by US standards) in Ireland and my marginal tax rate is about 50%, and it could go up a few points if I made more. Add 40% tax on cap gains as well. And bank interest. (I get < 1 eur a year in interest, and they send 40% of it odd to revenue. Why bother? Hell if I know.)

Hmm, it's anecdotal, but my colleagues who moved from Ireland and UK to Austria say that back there it was basically a tax heaven for tech workers compared to the income taxes they pay here so... maybe you could be wrong?

> maybe you could be wrong?

Ireland is bang on the EU average for taxation of high earners. It seems Austria has higher (although not massively so) taxation of high earners - source below.

Ireland has the most progressive taxation system in the EU, so low-earners do indeed pay less personal incomes taxes than any country other than Cyprus and Estonia.

Ireland is definitely not a tax haven for tech workers - you're the only person I've ever come across to hold that opinion. The UK may be closer to that, as self-employment is much more attractively taxed there than Ireland.

https://www.uhy.com/uk-imposes-highest-taxes-on-inheritance-...


My source for the above was intended to be: https://publicpolicy.ie/papers/comparing-irish-income-taxati...

It would be helpful to include some numbers with the above comment :)

Based on my insights (I'm actively recruiting software engineers, my dad used to run a health clinic as a doctor, I'm educated and have many friends within management consulting - in Sweden) that's at least not true for doctors - at least it's in the same ballpark (in contrast with FAANG-level salaries).

Marginal tax rates are much higher in Europe at lower levels, so in order to pay someone 50% more, you would have to pay them 100% more for them to get a 50% pay increase to make up for the money taken by taxes (the mechanism that prevents wealth inequality)

>the mechanism that prevents wealth inequality

False, this mechanism only prevents income inequality but not wealth inequality as existing wealth is not taxed much in Europe.

For example, inheritances, assets and properties are not taxed much in Europe (people scream double taxation if you propose that) but income is taxed substantially so you'll never be able to save enough to catch up to the upper classes who own assets.

So actually, in some European countries, while having low income inequality because of high income taxes, you end up with huge wealth inequality due to untaxed inheritances, assets and overvalued properties rolled over across multiple generations to the point where Germany's top 10% own two thirds of the country's wealth:

https://www.iamexpat.de/expat-info/german-expat-news/germany...

To level the playing field and reduce wealth inequality, a sound policy would be to tax income less and tax inheritances and assets more but fat chance of that ever happening as that would be a blow to the ruling class.


The problem with inheritance taxes is that there are some crazy people who believe that the tax rate should be 100%.

There is also the big issue that you can just transfer most of the wealth well before death.

If I were to suggest an inheritance tax it would not be significantly higher than 30% but it should have a generous tax exemption for at least $10 million.

However, I personally do believe not that this is an effective solution against wealth inequality because it is a very slow mechanism. It would make more sense to just raise capital gains taxes and decrease dividends taxes so that there is no longer a heavy skew towards wealth building in the first place.

You can still get returns but they have to be paid through a dividend which generally correlates with useful economic activity. You can't just flood the market with cheap money and then use the cheap money to pay dividends if you didn't earn the income in the first place.

Borrowing money doesn't increase the value of a company. It is neutral. If the company is spending that borrowed money on dividends then the company is losing value by exactly the amount that is paid out.


This comment makes the mistake of treating Europe like a country, which it is not.

> For example, inheritances, assets and properties are not taxed much in Europe (people scream double taxation if you propose that) but income is taxed substantially so you'll never be able to save enough to catch up to the upper classes who own assets.

In Ireland, apart from relatively small tax-free thresholds (€335,000 lifetime from parent to child, for example), gifts and inheritances are taxed at 33%.

In the UK, above its (similar) threshold, the rate is 40%.

The US Federal Estate tax rate is 40%, but with an enormous $11,580,000 estate threshold, which is orders of magnitude higher than Ireland or the UK.

Even though Ireland and the UK have some of the highest inheritance taxes in the world, the EU effective average is still ~14% - double the global average of ~7% and on par with the US, where added State taxes vary the average between 12% and 19%. Source: https://www.uhy.com/uk-imposes-highest-taxes-on-inheritance-...


>This comment makes the mistake of treating Europe like a country, which it is not.

Of course it's not, never said it was but cherry picking countries with larger inheritance tax is also a mistake as you can't choose where you pay your taxes as an EU resident. You pay them where your main residence is.

So on the other side of the spectrum you have Austria which has high income tax (because socialism and income equality) but basically no inheritance taxes, and taxes on assets are levied on their original purchase price so you end up having countless residents who earn small incomes but are sitting on millions of euros of wealth due to exploding real estate values but only pay 5 Euros tax per year as that's levied against the purchase price from 60 years ago when their grandparents bought it for pennies.

So you end up with huge wealth inequality where even people with good incomes pay high taxes and are priced out of the real estate market if they don't come from families of means.


I didn't cherry pick anything. I chose the UK and Ireland as they directly contradict your statement that:

> False, this mechanism only prevents income inequality but not wealth inequality as existing wealth is not taxed much in Europe.

The E.U. is home to both the highest and lowest inheritance taxes in the world, and averages very close to the US. I think this adequately refutes your statement that "existing wealth is not taxed much in Europe."


I play an economic simulation game. Every time I see an asset explode in price (inflation) I am thinking "I should get into this industry and produce the stuff that is going up in price". High housing prices are a strong demand signal, meaning more houses should be built. It's really unfortunate that it does not happen enough.

Because it's not the building the houses that's the tricky part, that is easy, it's the land that's expensive and difficult to obtain. That's what's appreciating since it's a finite amount, not the walls and roof sitting on it.

That's more or less true in the U.S. too, at the rates software engineers make, at least in NY and CA. In my locality a software engineer making $100k will face a 40% marginal tax rate.

That's fairly low by E.U. standards. The marginal rate in Ireland would be 52%.

40%?! Where do you live? The effective federal income tax at 100k is 22.75%. I don't think any state has a 17.25% effective income tax, certainly not if you only earn 100k.

If you're making 100K in California, your marginal tax rate is:

- Federal: 24%

- State: 9.3%

- FICA: 7.65% (6.2% social security, 1.45% medicare)

- SDI: 1%

This gets you to 42%. Your employer matches the FICA payments too, so that's closer to 50% of your take-home pay.

Once you make enough to pay off the regressive FICA taxes ($142K) you get bumped back down to "just" the mid-high 30% range briefly, until you hit $163K, then its back up to 40% again.


So California is basically on par with Germany? Yet all I hear from Americans is how our tax rates are high.

A lot of those "taxes" are also not going into the government's budget. They are used to fund specific services exclusively.


Wow, I had no idea

It's not insane - it's pretty common in most developed countries. The US is a major outlier.

In many developed countries, 42% tax would cover healthcare, a pension you can actually live off of, and fully-paid education for all of your children. Californians get none of those things, and I don't really understand what it is that they get over (e.g.) Washingtonians for the extra ~30% in taxes.

In the states, tax is obscure but painful -- you feel it when you pay it, like a sales tax not included in the price or a complicated tax form. In Europe, tax is hidden but smooth -- like a VAT built into the cost of everything or a 3-box tax form (in NL)

They get to work 50-60 hour weeks. But that's not exclusive to California. Every state has that advantage. /s

Are you sure Washington doesn't just take the money from some other tax? Like property tax and business tax?

I'm actually curious, is there somewhere you can see the total revenue for a state from the union of all collected taxes and fees?


30% ? The difference is 9% and is probably made up through other taxes. I know Washington has the highest alcohol and cigarette taxes for example

They get protection by the US military and promotion of Californian business interests throughout the world through Federal institutions. Not to mention: friction free access to a large labor pool and US domestic market etc.

I get your point that the US doesn’t provide as much social services as other developed nations. Almost all these nations depend on US hegemony to not have to spend as much on their military. This is a choice that the US made. There are good arguments for scaling back military spending and increasing social spending without compromising US hegemony though, however those choices may not be politically expedient so here we are.


I don't want to address the hegemony point beyond I disagree on the need or even effectiveness of US military.

But I would want to point out the curious phrasing and of your first paragraph and what that says about USA way of thinking. All these points are business targeted while all european points are individual targeted.


> But I would want to point out the curious phrasing and of your first paragraph and what that says about USA way of thinking. All these points are business targeted while all european points are individual targeted.

I don't think there is anything curious about this way of thinking. And US hegemony plays directly into this!

Pre-World Wars, European nations had their colonies and their militaries and the priority of thinking was along similar lines: access to expansive markets, large pools of labor, protection of business interests etc, chiefly through colonies.

WW2 changed all of that, reducing European nations to client states (no disrespect) of the US, that funded their reconstruction. Colonialism was no longer allowed, and European nations could not freely pursue foreign markets without competing with US companies, which would always get precedence. With no real way to compete with the US militarily, and with NATO aligning with their immediate geo-political needs anyways, European nations invested heavily on Social Services, rather than blow up their military budgets. This geopolitical equation hasn't changed post WW2 and you have generations of people that consider social services as the primary function of their Government.

However, its a fundamental mistake to assume that a Government can provide effective social services without having a strong economy. Strong economies require successful businesses.


> However, its a fundamental mistake to assume that a Government can provide effective social services without having a strong economy. Strong economies require successful businesses.

Umm... I would say the social services in european countries are pretty successful.


It can depend on what to compare them to (and for what class, which changes a lot in terms on access to commercial clinics, etc.). What countries are you comparing to?

I can get into the nuances of it, but honestly even on surface level, just the single point that my Health care is not linked with my job gives me infinitely more control over my life.

WA residents get all of these things with 0% state tax, and only a bit more in property taxes. What Californians get for the extra taxes (and Washingtonians too, for that matter, for a large fraction of theirs) is a jobs program for incompetents that occasionally achieves something good as an unintended side effect; known as government.

I frankly have no idea why US govts on all levels, and from all parties, seem so much more incompetent than many European/Asian ones (I have a pet theory), but they are.



> They get protection by the US military and promotion of Californian business interests throughout the world through Federal institutions. Not to mention: friction free access to a large labor pool and US domestic market etc.

And Washingtonians do not? What you wrote does not address the question that the parent poster asked.


The Washingtonians part was added by the OP after I made my comment. Originally it was a comparison of CA with European states only.

It's not a major outlier if it's common.

100k USD in GBP is 73347.60. In the UK you'd be taxed 30% on that, including national insurance. https://listentotaxman.com/73347.60


No, in the UK, your marginal rate at that income would be 42% (40% income + 2% National Insurance).

If you have children, you lose out on child benefit between 60k and 70k, which adds an equivalent 10% in that margin.

Between 100 and 120k there is also the loss of personal allowance, which results in a marginal tax rate of 62% in that bracket. If you have children between the ages of 3 and 4, you also lose out on 15 hours/week childcare, resulting in that marginal tax rate hitting 89%


The marginal rate in a small bracket isn't that relevant to the effective rate though.

+9% if you’re still repaying student loans, which is common until 40s.

Student loans operate like a tax in the U.K., taking 9% of your pre-tax income above 15 or 25k directly from your payslip.


I don’t view paying my own individual debt as a tax. I have a percentage of my pay deducted and diverted to my retirement account. That’s not a tax either, even though it’s percentage-based on my pre-tax amount and directly deducted.

You can opt out of your pension contributions. You can’t opt-out of paying student loans, which is an available option with other debts.

Student loan deductions reduce a balance that doesn’t impact your credit score, can’t chase you for repayment (unless you do something stupid like move country and fail to inform them) and doesn’t impact lender decisions. Most people have no hope of repaying their ‘loan’ in their lifetimes and instead expect the loan to be written off after 25 years. U.K. student loans being debt is a technicality, it’s a tax with a countdown timer that might be shorter if you’re baller.


If you hit 100k by the time your 30 you won't be paying it off into your 40's... Tech / consulting etc, not too hard to hit that number.

You aren’t wrong, but hitting 6 figures at age 30 is very far from the typical experience. Outside of London it’s not guaranteed you’d even hit £60k.

Plan 2 students are screwed, with the high interest rates and slower repayment schedule I wouldn’t even be sure non-London devs would finish paying it off.


The take-home amount includes all of that. You lose 30% of your income.

Correct. This can be easily verified https://www.gov.uk/estimate-income-tax

Tax is (arguably, different argument) progressive.


Parent message talks about effective tax rate, you talk about marginal tax rate. You are talking about 2 different things.

Shouldn't that be 37%?

1-(1-0,24)*(1-0,093)*(1-0,0765)*(1-0,01) = 0,37


No. Those taxes are levied on the gross income, not on the net income after the previous tax has been applied.

Don’t forget the 10.25% sales tax. This puts the combined marginal tax rate at 59.85%. (24 + 9.3 + 7.65 + 7.65 + 1 + 10.25)

In Croatia the total would be about 63%. If you go through capital gains (no paycheck just profit after corporate tax, capital income tax and VAT) it's 53%. It could go down if some company expenses can be used for your life expenses.

In Austria the total is 75%. In Austria going through capital gains would still be 70%.

I'm very disappointed at how much money Europe sucks out of my work.


I call bullshit on the tax rate in Austria.

"Capital gains" through GmbH is 25% KÖSt (Körperschaftssteuer) and then 27,25% KESt on Profit. The highest VAT rate is 20%, there are also lower ones. This results in 56.35% percent including VAT (1-((1-25%)(1-27.25%)(1-20%)).

If you go through income tax as a freelancer this is even lower when you claim the default deductibles (Pauschalierung), which is common in IT jobs, because you have very low expenses. The later is also cheaper if you factor in health insurance.


Well, having a GmbH does not really allow a clean profit extraction without having employees, so when you eventually employ yourself you'll get to around 70%.

Austria is one of the worst countries in the world to do any kind of small business. Self-employment is also taxed aggressively.

A form of self-employment in Croatia allows a fixed tax payment of about 5k EUR a year with an income cap of 39k EUR per year, leaving you with 34k EUR after taxes. Similar thing in Serbia but even more money.

In Austria there's nothing like that.

It would be nice if it was possible to assign a significant amount of life expenses to business but that also is heavily bureaucratized and regulated that even buying a 5k EUR computing machine has weird tax consequences (not immediately deductible as expense in the full amount or now, because expenses are higher, you might not be able to take that 12% of profit untaxed).

I mean, I guess I'm just miserably following every word of law and my accountant's advice and maybe other people just ignore a bunch of these guidelines and hope that inspection never comes.


39k EUR a year in Austria is 33% tax+insurance+pension:

20% "forced savings" (Pension + Vorsorgekasse) 7% health insurance 6% income tax

But 39k a year is definitely not a freelance programmer in Austria.

80-120k is the average I see at my colleagues and enterprise customers for freelance programmers with regular working hours compared to regular employees (5 week vacation, sick absence, ...). I know people scratching at 200k, but they are senior consultants.

So a more realistic view would be 100k 40,5% tax+insurance+pension 15% "forced savings" (Pension + Vorsorgekasse) 6% health insurance 19,6% income tax

This calculation assumes that you do not really have significant expenses of business. Having those actually makes the picture look worse.

You can calculate here for yourself, no "cheating" required: https://abrechnen.wko.at (official chamber of commerce calculator)

A GmbH is always better at 220k+/year. But there may be reasons you would want one earlier (liability, employees, IP, investments, ...)

Employing people in Austria is expensive ("cost of labor"). Beeing self employed is not bad, if you factor in benefits and costs of life and quality of life.


Well, 34k after taxes in Zagreb, Croatia is about 50k after taxes in Vienna. Given the increased cost of living and quite similar bureaucratic and regulation heavy state I'd say the self-employment is very aggressively taxed. For 50k after taxes you need to earn quite a lot compared to 39k in Croatia and the benefits are not that much different.

> I'm very disappointed at how much money Europe sucks out of my work

Are you owner of property like apartment or house there? Just wandering, if that makes a significant personal economic difference for owning it in EU.


I do not own anything substantial. Saving for a house in the capital city would take about 15 years of frugal living as a programmer. I could also take a loan.

What I also dislike is the tax prepayments for business owners, which is basically legal theft. The government takes tax in advance and then gives you back the money if you overpaid after about a year. I wouldn't mind this if taxes were low.

Imagine being a business owner and there's a period of irregular income yet the advance tax payment arrives and bankrupts you.

The taxes here are just insanely high and everything is insanely inefficient. Healthcare, education and municipal services.

After moving from Croatia to Austria, it's much worse in Austria, a wealthier country but still, I see all of the same patterns of inefficiency and they are even worse because Croatia can't afford being so inefficient.


If you can back it up with numbers you can request to reduce the prepayments. This request is usually granted.

Yes, but free studies, free healthcare and unemployment benefits.

Only if you buy stuff, though. Which was hard this year in particular, and not terribly useful once basic needs are met.

But one of the reasons why buying stuff was so hard last year (which I imagine is what you meant) was because people were buying a lot more stuff.

GP is based in UK where lockdowns closed shops. So it was literally hard to buy things when shops are closed.

This is slightly misleading. The federal tax rate is a tiered system, meaning a portion of your income is taxed at a certain rate and income that exceeds that tier is taxed at a different rate after that and so on.

The federal tax rate is much lower if you account for that.


Op did say “marginal rate”

Yes, but you'd be amazed at how many people don't understand what that means. No doubt it's not true on HN, but a lot of people among the general public seem to be under the impression that the effective rate jumps at thresholds.

I personally know someone who turned down a payrise for this reason.

Given that in modern economy it's insurmountably more difficult to earn first million than the next ten, 50% increase in SWE salary would give a huge advantage and produce non-linear effects on inequality gap.

It does lead to gentrification, instant conflicts between newcomers and old residents, pushes up prices, etc.

Plus having that more money means one can invest a bit, and a generation later dad can give a big gift to help seed the kid's startup.


> You can't have low inequality by definition if you decide to start paying one group a ton of money.

You can, if you give the other groups a ton of money too.

Wages in Europe have stagnated compared to GDP [1] too, so it's not unreasonable to fight for higher wages.

[1]: https://www.robert-schuman.eu/en/european-issues/0289-labour...


There is only so much "richness" you can share. You can't give 400 million american a nice car, a big house with a view on the ocean, 100% organic food and access to top level healthcare and education. Unless you produce those thing at that scale, and some things are by definition not scalable (there is only one "best medical school in the US"). So some people have more power to get access to/acquire those desirable items. And software engineers are often amongst the first in line. If you want other people to have a better access to these, by definition that leads to current "first in line" to loose something.

Giving more money to everyone is easy, everyone was a billionaire in Zimbabwe few years back. That did not make them "rich".


There's quite a gap to be filled between the current US situation and "everyone has a house with ocean view". You might not be able (and not want) to bring inequality to 0, that doesn't mean the current level can't be lowered a good deal with good solutions. And yes, education can scale a lot - it's just that many gatekeepers don't want that. The story of humankind is making exclusive things available for everyone.

As others have pointed out, people don't actually want "a nice car, a big house with a view on the ocean, 100% organic food and access to top level healthcare and education." all at once. They want a "good enough solution". Some of them are fine with an apartment with a view on the ocean. Some of them are fine with a house without a view on the ocean. Some of them want organic food, a lot of people eat junk food or processed food and like it.

This is basically a strawman that you built so that you can easily defeat it.

Think of the most extreme possible scenario. An economy where no human workers are needed and only capital is needed to build robots that are equally good workers as humans. The rich will own a lot of robots and no longer be dependent on human workers. Here is the problem. Since everyone else is unemployed, nobody can afford to buy your products. It is actually possible to get wealthier by giving to those who have nothing in this scenario because although the rich own robots, the robots are effectively worthless if they don't do any work. You don't even have to give that money away for free, you can just lend it out.

Lending doesn't work in existing economies because it is very difficult to get access to capital if you have no money to begin with. It's also a chicken and egg situation because you need money in consumer hands to drive demand which then drives more loans. If you spend your loans wastefully then the money will arrive in consumer hands by mere chance. So in theory if you just print an infinite amount of money some of it will trickle down eventually. That's the idiotic policy central banks around the world are following instead of giving out just (emphasis on just) enough money to get everyone back to work.

>Giving more money to everyone is easy, everyone was a billionaire in Zimbabwe few years back. That did not make them "rich".

There is an easy indicator for when to stop. You can stop handing out money once you have reached the 2% inflation goal.


> those things at that scale

When everybody have those things, you no longer think of them as "richness". Richness is what sticks out.

150 years ago very few people had running water, electricity, fridge, WC, etc.

Most urban americans live "richer" lives today than the rich did 150 years ago.


>Most urban americans live "richer" lives today than the rich did 150 years ago.

This "richness" is also relative: If you own a goat in a village with no goats, you're rich. If you own an apartment in a village of McMansions you're poor.

And let's not mistake comfort with wealth. Just because I have electricity, a WC, a fridge and don't plow the fields like my grandparents did might make me seem rich, but my grandparents owned that land they were plowing while I don't own the "land" I am "plowing" at my comfy deskjob, but the corporation does, nor do I own the land I live and sleep on, but the landlord/bank does.

Our lives are now much more safe and comfortable than 150 years ago, but in the end, most of us who are not asset owners, are set to be serfs for life, just like 150 years ago except that instead of being serfs to a crown we are serfs to banks and publicly traded megacorps.


The US has around 150000km of shoreline.

There are roughly 350M inhabitants, but only about 120M households.

If you want to give everyone a house with a view of the ocean, with plots 10m wide, you need to build them around 8 deep to give everyone a view of the ocean.

It may be easier to do if you stagger the plots.


Everybody earning more will just lead to more inflation. I expect most of the additional pay will end up in higher housing prices.

> Everybody earning more will just lead to more inflation.

Normally we measure wage growth adjusted for inflation.

In my case I referred to wages as share of gdp, which has been going down over the last decades. There is no reason that shouldn't at least be a fixed amount. If it's not, it means that people who make money outside of wages (shareholders etc.) are capturing a steadily larger part of the total economy.


Increasing wages for everyone doesn't inherently mean everybody will earn more. Less money will go to shareholders, decreasing inequality

It can be difficult for shareholders to earn money if there is high CPI inflation.

If the previous year over year ROI is 7% and inflation grows by 3% then you have to increase your ROI to 10% just to catch up with inflation. This means only the most productive companies will actually maintain their existing growth.

Compare that to a deflationary environment where every warm body with a big bank account can get 7% ROI without even trying or even do annoying things like employ workers.


This is the wrong mode of thinking.

>I expect most of the additional pay will end up in higher housing prices.

It will _justify_ existing house prices. If inflation picks up the interest rate will rise and the cost of housing will stop growing. The increased wages can still afford the same housing price, but not a cent more.


> You can't have low inequality by definition if you decide to start paying one group a ton of money.

That's true, but the question is, the higher salary you refuse to take as a SWE in Europe, does it really go instead to someone else in need of it? Or is it just pocketed by someone who already has more money than you?


Both.

Fiscal policies and budgeting policies aren't "This group of people will pay for that group of people, and that group will pay for the other."

Your taxes become part of a revenue line on various budgets. Who gets what is defined through various public policies, grants, subsidies, procurement. Maybe a chunk of your taxes will be allotted to social programs, another chunk to NASA and maybe another chunk to various endowments such as the Humanities and the Arts.

Moreover, the issue isn't just how tax revenue is spend. The issue is just as much in how taxes are levied. Income taxes for individuals vary from taxes on financial instruments, corporate taxes, value added taxes and various other taxes. Or even the taxes that get tacked on your various utility bills, the estate you inherit from a loved one and so on.

> Or is it just pocketed by someone who already has more money than you?

Money is often seen as a store of value. The more you have of it, the better of you are. But that's only part of the story.

Money only gains real value when it is exchanged. That's how wealth is created. Money acts as "oil in an engine". If money doesn't get exchanged, you have an economic crisis.

The big issue is today is that 50 years of complex global policy making have generated dynamics that pushed holes in the engine, causing that oil to leak away. Where to? The financial markets. Where money is exchanged for debts.

If you want an equitable economy, you have to address fiscal and monetary policies first. Not this "who gets my money" argument.


Or it could be neither. Perhaps that revenue isn't being generated in the first place.

> you refuse to take as a SWE in Europe

Refuse to take?


I wouldn't call Canadian (or Fr or Se) wealth inequality 'low'. 'Why I can't afford a house', again is more a problem in Fr/De/Se than in US, see https://en.wikipedia.org/wiki/List_of_countries_by_home_owne...

Inequality in Canada is substantially lower than in America (and is on par with Australia, and between Fr and Se). This is evidenced in their Gini coefficients. [1]

- Gini for SE is 0.25

- Gini for FR is 0.31

- Gini for CA is 0.33

- Gini for US is 0.48

- Gini for ZA is 0.65

I've also included South Africa for comparison, one of the least equal societies on earth. A photo of what a 0.65 Gini country looks like is here (https://blog.prif.org/wp-content/uploads/2019/10/SA_Drone_Pi...)

[1] https://en.wikipedia.org/wiki/Gini_coefficient


From your link, GINI of Canada and Tajikistan is the same or Finland and Azerbaijan. Totalitarian states like Belarus or Kazakhstan have one of the lowest GINIs in the world, now I question gini usefulness even more.

I assumed you realized we were constraining ourselves to places with a High or Very High HDI.

If nobody has any money at all, would you not say inequality is low? If everyone in Tajikistan has $5 except the president, Emomali Rahmon, is inequality not low?

I suspect you are looking for a pairing of HDI and Gini, which factors in both the development (and hence the standard of living) and the inequality.

Sweden: (Gini: 0.25, HDI: 0.933), France: (Gini: 0.31, HDI: 0.901), Canada: (Gini: 0.33, HDI: 0.926), USA: (Gini: 0.48, HDI: 0.924), South Africa: (Gini: 0.65, HDI: 0.709).

Now, Tajikistan has an HDI of 0.66 ("medium"), and Azerbaijan 0.756 ("high").

Kazakhstan might surprise you, the HDI is 0.817 ("very high"). The standard of living there is actually good, in spite of what you may have seen on Borat - incidentally filmed in Romania. Almaty's been on my list of places to visit for a long time :) [1]

[1] https://en.wikipedia.org/wiki/Almaty


> Borat - incidentally filmed in Romania

Romania: Gini: 0.36, HDI: 0.828

HDI is close to Kazakhstan, actually


> If everyone in Tajikistan has $5 except the president

That distribution will yield a very high gini coefficient of very close to 1.


No, it yields a Gini coefficient very close to zero.

The Gini coefficient is defined as 1/2 the mean absolute difference considering all pairs of households:

https://en.wikipedia.org/wiki/Gini_coefficient

A group of people where everyone has the same income as a Gini coefficient of exactly zero. Adding a single outlier will increase it a little. A group of 1001 with 1000 people earning $1 and one person earning $100 has a Gini coefficient of 0.09.


>> If everyone in Tajikistan has $5 except the president

> That distribution will yield a very high gini coefficient of very close to 1.

It yields (n-1)|5-p|/(2n(5(n-1)+p)) which is about p/(5n+p).

So it depends on whether the president (p) has $10 or $n^2.


indeed. If everyone in tajikistan has $5 except the president, who has $1, the gini coefficient will be different.

Trives of neanderthals were very equal too.

Obviously you have to compare apples to apples


Read "Sapiens" 35 hour working week as a hunter gather is far preferable to the 60 + home chores of the homo softwaricus.

I'm always sceptical when I see people quoting 50-60+ hours a week as a "normal" workload. I don't doubt that many people spend that much time in the office but I can't believe they're actually productive for that many hours - I know for myself (as, I think, a reasonably effective developer) I can't sustain much more than 40 productive hours a week for long.

I would way rather program 60 hours a week than live as the hunter-gatherers did.

I am not sure, in there own world some tribes might have been far happier than 95% of society is today

I don't think I am able to make this judgement but I can talk about what happened after hunter gatherer tribes disappeared.

If you are a hunter gatherer you just need a good hunt every now and then. There is no pressure to perform work all day if you get enough food.

This is different if you are a farmer. Farming is highly labor intensive. There is so much work to do that you are never done. You will have to repeat the same motions every single day. Swing the same tools the exact same way. People are tied to their land and it is possible to conquer the land violently. You are dependent on a military force which implies that a local ruler must collect taxes to pay the soldiers. That ruler also has power over you which can easily be abused.

Democracy is definitively fairer than having an authoritarian ruler but it can be subject to tyranny of the majority or the minority and still cause failure in leadership.


That is until they die from a simple infection.

Or starvation, or being eaten by a grue. People who think being a hunter-gatherer sounds great should go try it, there's nothing stopping them from doing so. They don't because actually, living in civilization with abundant cheap food, clean running hot and cold water, indoor plumbing, heating, air conditioning, and entertainment is great.

This argument is a fallacy. There's plenty of stuff stopping me from being a successful hunter-gatherer:

1. HGs are very skilled, and they build their skills throughout their lives - crucially, starting with childhood and adolescence. I, an adult brought up in a Western civilization, would be totally clueless in a rain forest the same way that those HGs would be totally clueless in our world.

2. HGs live in groups. I would need to find a group of HGs that would accept me, which is highly unlikely because of the language and culture barrier, plus my lack of skills - why would they want to have anything to do with an useless guy in the first place? My CV full of accomplishments does not impress them at all.

Unfortunately, just like transplanting an adult HG into our society most likely ends in them becoming a homeless addict, most likely result for me heading for the jungle is fairly quick death.


I guess I should have said "there's nothing stopping them except lack of will to do the required work." Which I guess makes sense since the motivation generally seems to be a desire for a return to some noble-savage-in-Eden life of plenty and ease.

How do you integrate with a HG community that doesn't care about you or, even worse, kills you and eats you? It's not only about "required work" but also about serious life-threatening risks involved. Whereas if you were born as a HG, those risks aren't there.

> People who think being a hunter-gatherer sounds great should go try it, there's nothing stopping them from doing so.

Well, I mean, except property rights and the people that will defend them in most of the places in the planet suitable for human habitation.


The Missus and I tried to plan going back to nature as a quarantine thought experiment. The conclusion was that it's simply not possible in most of Europe unless one manages to find a Sami spouse, and even then, most Sami seem to live fairly modern lives. As a Nordic citizen the Greenland option is there as well, but the situation is similar to the Sami one.

And the above presumes the existing population would accept you, and it's quite likely they won't.

Deciding to live off the land without special privileges enjoyed by native populations is simply not possible; regular financial transactions between you and society is a requirement, and it's pretty much impossible to raise children without access to modernities and without having the authorities go after you for child abuse.


you can make a simpler experiment: try going a week with only food you can forage in nearby forests and fields, plus some meat you'd buy (you're not expected to be able to hunt).

I love eating wild weeds and berries, but it takes _a lot_ of time to get enough to fill yourself, and it's not a case that people have only eaten stuff like acorns only in times of famine.

This fact by itself made me question a lot of what's in "Sapiens".


a tropical island wull give results very different to like a siberean forest.

Also from what i gather most meat was aquired from trapping, rather than hunting


Plenty of hunter gatherer tribes still around for the people crazy enough to want to join them

It is not likely any of them will gladly accept new members.

Gaining acceptance by a tribe and finding ways to not die if you ever become disfavored seems like part of the whole hunter-gatherer package, don't you think?

They tend not to be very wealthy by modern standards. Maybe you could ingratiate yourself to them with them gifts of things that require modern manufacturing infrastructure.


Your argument literally defeats itself.

You were born into the tribe, and stayed there your entire life. Also there were no laws on hunting, setting traps, etc.


[flagged]


We've banned this account for using HN primarily (exclusively? I skimmed your history and didn't see a single exception) for political and ideological battle. It's not what this site is for, and it destroys what it is for, so we ban accounts that do it regardless of which side they're battling for.

You've also broken the site guidelines frequently with snark and attacks on other users. Not cool.

https://news.ycombinator.com/newsguidelines.html


Seems better than perennial back pain from sitting long hours and getting brain fried from implementing same logic of micro-service 1000th time for a 'challenging' project.

Go try it and let us know how it works out

This virtue signalling about hunter gatherers is funny. It's not the first time I've seen these kinds of discussions :-)

And don’t forget murder. So, so much murder: https://ourworldindata.org/ethnographic-and-archaeological-e...

Sprain an ankle and you’re out of food that week.

Break a leg, if you’re lucky, you’ll a burden for s month.

On the other hand, your teeth may be healthier than that of people who gulp sugary drinks.


I would not refer to Harari in any context as an author worth reading. „Sapiens“ is a popular book, but scientifically it’s at least questionable.

I think you have to approach it with a certain mindset. I didn’t read it as a source of reliable history, but I definitely got a lot of value out of it. He has a way of presenting ideas from perspectives I haven’t considered before. In fact disagreeing with him and trying to find evidence against his often too simple narratives is a fun exercise on its own, and I learned a lot just from those tangents.

In totalitarian states, everyone is equally poor.

> In totalitarian states, everyone is equally poor.

Not quite. In totalitarian states, typically everyone's income is fairly equal.

Wealth, however, is often another matter.

In the soviet Union, party apparatchiks often had very nice dachas to live in, fancy cars, exclusive shopping venues with imported goods, vacations abroad, etc. But these things weren't necessarily purchased with disposable income, per-se. At least not officially.


I would quibble with the "fancy cars" part. Only the nomenklatura got government owned fancy cars and other perks --that reverted to the state if they lost the position. So it was a kind of state wealth that you temporarily had custody over.

To some extent, many of the "fancy cars" and other perks of capitalistic wealth are also things that one has only temporary access to by virtue of one's position. Without the position and the attached income, these can revert to the bank or other creditor.

After the wall came down and the GDR collapsed, East Germans were surprised how simple the life of the highest government functionaries was. They had a small gated community, with a level of luxury (except perhaps for extra labor) which is comparable to North American middle class: https://en.wikipedia.org/wiki/Waldsiedlung

Are those wealth or income coefficients?

My impression has been that wealth inequality in many places in Europe is much higher than income inequality, as a factor of it being an older society.

The places in Europe I'd want to move to are really no cheaper to buy a house than the places I'd want to live in the US.


I grabbed these from FRED and it looks like they use the income version, not the wealth version. [1]

[1] https://fred.stlouisfed.org/series/SIPOVGINICAN


Gotcha, thanks.

I pulled some city-level numbers and it seems like at least in some areas, European SWE are missing out compared to coastal US ones:

London 2018: 0.7 https://www.ons.gov.uk/economy/nationalaccounts/uksectoracco...

SF 2012: 0.523 https://www.sfgate.com/bayarea/article/Income-inequality-on-... (probably this has gone up!)

Paris 2015: ~0.492 https://www.institutmontaigne.org/en/blog/data-inequalities-... (they just say "similar to brazil", which is 0.492

Its unfortunately harder to find a bunch of city-level data, I wasn't able to find any German cities on quick googling, so I'm definitely fulfilling stereotypes of "Americans who think of Europe as just a couple famous cities", but those capture at least a couple of major population centers that aren't so appealing if you're a dev compared to the US hotspots: they're still unequal, but suddenly you're not nearly as high on the totem pole.


However you look at wealth inequality Sweden is actually the most unequal country in that list:

SE is 0.867 FR is 0.687 CA is 0.726 US is 0.852 ZA is 0.806


That picture likely contrasts lower middle class and lower class - middle class and upper middle class houses in south africa would not be across the road from an informal settlement due to unbelievable levels of theft and violent crime in such areas.

Home ownership is strongly influenced by culture. Germans are just happier to rent. Buying often doesn't make a lot of sense financially either. It's not much cheaper to buy than to rent and you lose a lot of flexibility. I could afford to buy a house, but I don't want to. That would just tie up a large fraction of my wealth into one fairly risky investment and make it much harder to move when my life changes.

Germany also has among the lowest median household wealth in Europe[1] despite having a high median income[2].

This explains the high wealth inequality we observe[3], despite the low income inequality[4].

This could be caused by the low levels of home ownership given that home ownership (and the associated leverage) is a huge tool for wealth accumulation for the average person.

I know that people say you can make more from ETF's etc. than real estate, but I'm not sure if that applies so much to your primary residence given you will always need somewhere to live and a bank isn't going to lend you hundreds of thousands of euros to invest in ETF's, but they will for your primary residence.

The extra mobility you have while renting is an advantage but one that comes with a hefty price.

[1] https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...

[2] https://en.wikipedia.org/wiki/Median_income#Median_equivalen...

[3] https://en.wikipedia.org/wiki/List_of_countries_by_wealth_eq...

[4] https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...


What’s risky about the investment? I’m of the impression that real estate is one of the more stable investments, subprime mortgage scandals notwithstanding.

What isn't? Volatile market value, risks of breakdowns and fires and previously undiscovered structural flaws, fires, natural distasters, etc. It's putting a lot of your eggs in one basket, which in investment terms is same as foregoing diversification, ie taking on a lot of risk for no corresponding increase in returns. Depending on jurisdiction, risk of unfair treatment in a divorce. High transaction costs when changing housing due to changing life circumstances. And to top it off you are binding the important service of having a roof over your head to the fate of this investment.

Home process in the US are historically very stable. I would think this is also true in Europe? As for diversification, your house shouldn’t be your only investment. As for fires and natural disasters, this is why insurance exists. Owning a home isn’t for everyone, but I don’t think there’s anything particularly risky about it as far as investments go.

Are you looking at home prices as aggregate? It will naturally seem a lot more stable then since you are then looking at what you'd have if you had diversification! As for individual cases of housing, I think we've recently seen enough discussion of CA volatility to conclude that at least big cities have a lot of volatility in individual housing units.

(Of course this all depends on the alternative too: renting regulations vary widely over the world in how strong the position of the occupants is wrt rent increases and landlord initiated termination)


I’m not talking about California (which is anomalous in many respects), but I am talking about the general market in various municipalities as well as anecdata from various people about their property values increasing from year to year.

Buying a home in a tolerable location costs at least 200k in my area and upkeep isn't free either. I can rent an apartment in a much better area for fifteen to twenty years for just the initial investment.

A house can easily lose its value or at least cause large expenses, e.g. if the cellar floods or develops mold problems. Or if the surrounding neighborhood becomes worse.

Selling houses has a large transaction cost.

I really don't see much benefits to owning over renting. I'd rather have 200k in a diversified portfolio that earns me 5k a year after taxes and has a much lower probability of losing 30% of its value while living in an apartment in a central location than own a house in a suburb that costs me a few thousand a year in upkeep and taxes. I'd likely need to buy a car too in that case, which is another few thousand a year.


> I'd rather have 200k in a diversified portfolio that earns me 5k a year

From a financial point of you a difference is that to do this you need to have 200k cash, while you can borrow most of the money to buy a 200k house.

There is a leveraging effect when investing in property.


I think the economic tradeoffs in buying a house are pretty country specific. For example, renters in Germany have very strong legal protection. It is very difficult for your landlord to kick you out, or raise the rent dramatically. I could certainly afford to buy the flat I live in, but I prefer to have the money invested in the stock market instead, and have someone to call (who also pays for) any problems. I also lived in rented apartments in France and UK, and it felt significantly different: Limited-term contracts, poor maintenance, (poorly) furnished - I would not want to live that way forever (of course, I choose these contracts because I only intended to stay for a limited time).

Interestingly, in Poland, it's the renter who is responsible for taking care of all problems, except structural ones and perhaps stuff like mold. Everything else is on the renter, and he is expected to return the house in "no worse" condition on the lease's end - meaning, repairing all the white goods in the house if they break etc.

Germany takes care of that problem by not supplying a kitchen or any white goods at all when renting an apartment. Of course, exceptions apply and some landlords do offer an EBK (fitted kitchen) when renting.

Shouldn't you also factor rent into your calculations? I don't know how high it is on 200k property, but I assume it's significantly higher than 5k/year. Owning a house is risky for the reasons you've mentioned, but might give you higher returns.

Like I said, owning isn’t for everyone (my point is only that it’s not an extraordinarily risky investment contrary to the OP’s claim). 5k a year isn’t rent in most places.

You should also consider the liquidity risk when selling a house. The MSFT stock is traded thousands of times per day, so there is strong consensus on its price. A house like yours in a neighborhood like yours is maybe traded once per year, so there will be less consensus and you would have to wait longer for a suitable buyer or discount the price.

How volatile is the housing market in Germany? And there are solutions to the other problems - getting the house properly surveyed before buying, insurance for fires.

The long-term trend in Germany has been a movement from rural to urban areas, and immigration from outside of Germany to German cities. So if you had an apartment or house in a city you are sitting pretty, not so much if you had the same in a small town or village.

> What’s risky about the investment?

The German population is shrinking.

Real estate as a safe and stable investment in the long term relies on steady population growth to insure that demand will always be there for you to be able to sell at a good price.

Of course, if you buy in the most desirable locations you may be shielded from this because demand outstrips supply by a huge margin to begin with.


Doesn't that really depend on where and culture? If you bought a house in Detroit in 1965 you aren't likely doing well today. If you bought in San Francisco in 2019 you're probably under today (though that may fix itself). If you bought in Japan almost anywhere you now have a used house which like a used car only goes down in value. If you're lucky the land goes up but condos/apartments you don't usually own the land and even then only in prime locations. Most locations land is likely losing value as the population declines. Land in Ginza (the most expensive land in Japan) only recently passed its late 1980s price per square meter.

Yes, there are extreme examples, just like there are extreme examples in the stock market.

You can diversify in the stock market (in fact for most people investing in funds it's the default), you cannot diversify in your housing investment.

The argument is that home ownership isn't a worse risk-adjusted investment than stocks. If you know how to reduce risk in the stock market without correspondingly reducing your returns, do share.

I believe that is also not true. Case Shiller is up barely ~x3 since 1990 including the recent large bump [1]; SP500 appears to be ~x12 since 1990. Inflation-adjusted, according to Wikipedia, Case Shiller National index is up ~25% since 2000.

Also, extreme risks is not what most people aim for in investing when most of their net worth is involved; the utility of money is not linear.

[1] https://fred.stlouisfed.org/series/CSUSHPINSA


> If you know how to reduce risk in the stock market without correspondingly reducing your returns, do share.

If you want to do it without reducing your expected returns you diversify to products with similar expected returns and, to the extent practical, mutually independent risks.


I don't see how this can be true. If you're splitting your investment, your downsides are smaller but your upsides are also smaller, and presumably by the same amount.

> I don’t see how this can be true.

How could it not?

> If you’re splitting your investment, your downsides are smaller but your upsides are also smaller, and presumably by the same amount.

Yes, and your expected return remains the same. Reducing variability isn’t “reducing returns”, because, as you note, what you lose from reducing the 50+nth percentile returns is made up for by increasing the 50-nth percentile returns.


Buying your home isn't an investment, it's only an investment if you can sell it at any time.

Risks of buying your home include: - Not being able to move if you can't sell (because the market isn't right) - Being stuck in a house where you pay a high mortgage while you could rent for much less after a crash (what happened in Spain after 2008). Note than in US you can give up your house and your mortgage goes away, but that doesn't work this way in Europe. The bank sells your house and if it doesn't cover the mortgage you still owe the rest

Also if you sell too early after buying, you're losing money because you pay more in transaction fees that you would have in rent (unless there is a big spike in prices).

Anyway, for a long time real estate have been steadily appreciating and people (especially boomers) got used to it, to the point that all their reasoning about real estate is that it's appreciating faster than inflation. It was true for a long period but that's no longer the case.


If you live in a country with mass migration then both house prices and rental prices increase almost constantly. I lived in London from 1996-2015. I bought a house in 2000, it tripled in value by 2015 and I sold up and moved out of London. Its kind of mad.

divorce, for example, is one major risk

I don’t think this is any different than with stock market wealth.

you can divide stock between 2 parties, maybe fair, maybe unfair, but that's it. A house will be up for sale when neither can afford it on their own, and a lot of money gets lost just in the process

Ah, fair point.

I don't know about the other countries you have mentioned but German residential real estate has very high levels of institutional investment and the legacy of rent control (famously, Berlin...although that changed a few years ago).

So you have very high wealth inequality, average German net financial wealth is equal to Greece and Germany has a significant number of billionaires, but you also have a system that fundamentally cannot be compared with the US. It just optimises for different things.

That being said, whilst recognising those differences, lower wealth inequality is not the result of most of these systems. Income inequality is generally lower but the cost of this is usually: low competition, high structural unemployment, weak unions, low levels of business creation...it isn't free. It is readly apparent from the EU that whilst the US has high inequality, it also has a far more dynamic economy that results in more people actually becoming wealthy (to take Germany as an example, most billionaires come from families that got rich in the 30s and inherited...the level of downward mobility is very high in the US) and higher levels of innovation.


> more dynamic economy that results in more people actually becoming wealthy

This is exactly the other side of inequality: if there is a big gap, someone must be taking advantage of this gap. The problem is that most people are losers in this competition.


Most statistics contradict you, despite the popular impression. The US has lower social mobility than most European countries.

https://en.m.wikipedia.org/wiki/Global_Social_Mobility_Index


What happened with rent control in Berlin?

Rent control sounds like a good idea in theory but in practice it seems the opposite, creating two tiers of renters.


They introduced the Mietendeckel law last year, which solidified the two tier system for renters. If you had a good rent contract in a central location, you were sitting pretty and could probably count on a decrease in rent. If you had done the responsible thing and rented in a further away location, no such luck. If you are looking for an apartment now, supply has been dramatically reduced. Great for the haves, not so much for the have nots.

Rent control is a bad idea in theory as well. A theoretical solution to the problem that can deliver the promises of rent control is if the government guarantees housing for the desired price.

The reason why it works is because the government is forced to change laws that prevent the construction it just promised. It's about accountability rather than the promise itself.

The reason why rent control doesn't work is because the government can enact or keep laws that restrict the supply of housing. There is no accountability. It's actually equivalent to censorship. If you want the housing market to look good, just ban bad news (high prices).


> You can't have low inequality by definition if you decide to start paying one group a ton of money.

Sure, but you can still ensure that the lower classes have a good standard of living. Most wealth isn't zero sum. People talk about income/wealth inequality in the US, but to me, based on the complaints people have, it just seems like a proxy for poor standard of living.

> Well, this is a lot like the housing conversation in the US. "I want my house to go up in value, and be a great investment!" Also: "Why can't I afford a house?"

The big difference here is that the supply of land is fixed, and thus (almost all) housing wealth is zero sum. But for other things, this is not the case, so you can't apply the logic of housing to other things.


> Most wealth isn't zero sum.

Most solutions to inequality seems to be zero sum. "Tax the rich".


The salaries aren't low because of equality though. You're just shifting the high earners from the people doing the work to the managers of the people doing the work.

As far as my experience goes, managers make about the same, or less, as an engineer at a similar experience level. They may end up at a higher compensation level if far enough in the career ladder, but I don't think it's significant in the bigger picture. The average CEO earnings in the Netherlands, including bonuses, is only 5x-6x the average engineer salary.

So maybe the real answer to the question is that European tech companies are just not making a lot of money?

There are few growth stocks, so I'd expect compensation figures are not strongly skewed by stock bonuses, and are a function of market and fiscal environments much more than profit. When they are raking it in, it will be mostly going to US investors' pockets via buybacks.

Mind you, there are exceptions. The CEO of a certain hotel bookings company makes €17M/year. Technically an american company though.


They don't by and large. Listing the top 50 tech companies in the world by revenue will show that the US dominates it.

The few that appear on the list pay FAANG-level salaries for the most part.


Probably this I only know Finland tech scene but eg lot of Nokia engineers did FAANG like salaries in 2000s and there is now couple unicorns here where senior employees do very well.

Nokia valued managers, but not engineers. Good engineers became not so good managers to get a raise. We know how the story ended.

From world market leader to out of business in 7 years.


> The average CEO earnings in the Netherlands, including bonuses, is only 5x-6x the average engineer salary.

What do you mean by average CEO? That's about the same as a CEO of a mid-sized American company. Shell's CEO makes a lot more than that, even considering the terrible year for oil.


The ratio in the US is reported as 320:1.

That’s mind blowing

The CEO only earning a few hundred thousand is mind blowing? Really?

That's the way it used to be in the US, too.

That’s the way it is still. Don’t assume because a handful of Fortune 500 companies pay tens of millions that’s a typical CEO salary in the US.

Yeah, the super high ceo pay is for the super large companies. Pick a super large company in europe and you can find high ceo pay too. Shells and volkswagens ceos for example made 10 million each.

Most of the really rich CEOs such as Bezos are making more as owners than as CEOs.

No, the other way around. Inequality is low because the distribution of salaries across roles, across industries is tightly clustered. I suspect it's true of the managers too. The point is there aren't high earners.

>A lot of folks here are calling out the lower pay for SWEs in Europe and Canada as a failure - but also praise the low wealth inequality and low income inequality in Europe and Canada.

I think when it comes to Europe people should specificity the countries. If you take Europe or even the EU as one entity then it is one of the most unequal places on Earth when it comes to income and wealth.

Bulgaria is an EU member state and in 2018 had an adjusted net national income per capita of $8,148.[0] Luxembourg is part of the EU as well and in 2018 it was $60,189. Denmark was at $52,641. Poland was at $12,954.

All of this varies enormously from country to country.


> but also praise the low wealth inequality and low income inequality in Europe and Canada.

Now what happens if you include expats in the calculation?

> makes it much easier to found and grow a business without the threat of death

And yet you see a lot of Europeans and Canadians founders going to the valley for funding. Yet the opposite almost never happens.


> Now what happens if you include expats in the calculation?

Pretty sure expats are included in Gini calculations.

> And yet you see a lot of Europeans and Canadians founders going to the valley for funding. Yet the opposite almost never happens.

Why wouldn't you raise money from where the money is? Inequality means there's a small handful of people with giant piles of money. That's a good bet to go knocking at if you want some.

Generally if you want to build a successful business you should raise on the best terms possible, and European investors are not known for offering particularly compelling terms.

I should also say, just because you raise money in the bay doesn't mean you have to run your business in the bay. Should you choose to do so remotely, you'll like take a bit of a discount, but it's worth mentioning this year's YC class was entirely remote.

I'm not sure this argument is connected.


> Pretty sure expats are included in Gini calculations.

I meant European nationals living in the US. Pretty sure the salary distribution would be different between "Software Engineers in France" and "French Software Engineers" as the second includes all expats living in the Bay Area...

> I should also say, just because you raise money in the bay doesn't mean you have to run your business in the bay. Should you choose to do so remotely, you'll like take a bit of a discount, but it's worth mentioning this year's YC class was entirely remote.

Had there not been a global pandemic would that have been the case?


>I should also say, just because you raise money in the bay doesn't mean you have to run your business in the bay. Should you choose to do so remotely, you'll like take a bit of a discount, but it's worth mentioning this year's YC class was entirely remote.

I like this idea. Is this common? How many companies followed this strategy? It might have been remote but it is entirely possible that the companies will move to the bay area after receiving funding.


> > makes it much easier to found and grow a business without the threat of death

> And yet you see a lot of Europeans and Canadians founders going to the valley for funding. Yet the opposite almost never happens.

Just because it is easier to found and grow a business doesn't mean the environment is friendly to founding and funding a high-growth business.

In fact, an environment that is friendlier to SMEs, lifestyle, and bootstrapped companies probably reduces the pressure to jump into a VC-funded high-growth swing-for-the-fences model. Combine that with a less generous funding climate, and those who do want to go that route will go somewhere else for their funding.

But I don't think the reverse applies in terms of attracting entrepreneurs that don't wish to go the high-growth route from elsewhere.


I think in our current economical climate it is actually good if there are rich people willing to part with their money, even if it is just a moonshot. What I don't like is that the VC model often just devolves into the same boring strategy of outgrowing the competition. Lots of good companies died because of this and lots of bad companies are still alive.

I share your distaste, and even more so when outgrowing devolves into outspending and outlasting.

Canadians are kind in a shit position. Real state is stupidly expensive everywhere where you would like to live (Greater Vancouver, Greater Toronto, Ottawa is getting more expensive), and salaries are not keeping up at all. For example, cost of living in Vancouver and Seattle, disregarding the currency, is more or less the same, however in Vancouver it's like you earn 2k less than Seattle for an entry level Big 4 position. In Canada you need 2 professional incomes at least to buy a house/condo.

Vancouver and the GTA for sure, Ottawa had been relatively affordable - prices in town went up before COVID, but down during. Montreal remains quite affordable. Edmonton and Calgary aren't bad, and Kitchener/Waterloo's pretty reasonable still. I mean, it's clear a lot of that is mainland Chinese money parking, which cities are actively pushing back on.

House/condo have very different prices. You can totally buy a condo anywhere in Vancouver with a software engineer salary of 120k+ which is very doable for senior positions..

The situation is very odd because the inequality graph is a lot steeper than anyone is willing to believe. For the UK, look up your salary on here: https://www.gov.uk/government/statistics/percentile-points-f...

If you're a SWE on a half or even a third of an SV salary, you're still in the top 5%. Do you feel rich? No. Are you easily able to buy a house in the southeast early in your career? No. But for every person earning more than you there are twenty earning less than you.

The number of super-rich dominating the conversation, the political donations, and the housebuying is surprisingly small, and most of them make far more from investments than from salary. Actual income for "work" caps out at a few million for celebrities and sportspeople.

Even among the ordinary I know people who've been out-earned by their houses - that is, the annual rise in the value of their (mortgaged) house was more than their salaried income.


The thing is you only see this attitude with Software Engineers and not other high paying professions such as Doctors or Lawyers.

If you were to compare the roots of Computer Science and its culture to other professions, it initially stemmed from the nerds and nerds were always trained to see themselves as low status, in fact by definition being a geek would make you an outcast amongst others..

It just so happened by pure luck that many successful startups grew thanks to our field and being a SWE became suddenly desirable.

So I'm not surprised that demanding a fair wage or forming unions are some of the things we struggle with.

Our industry is constantly trying to bring its own value down (anyone can code, it's easy,..), you never hear about other industries complaining they are "overpaid" or belittle the value they bring to people and businesses.

It's an unfortunate truth about studying CS and if I may be boldly controversial on HN, it might also one of the reasons we don't see too many women in this low status field.


The wealth inequality debate is about Bezos and wall street ceo's type thing - I don't think many people have issue with some making $50k and others making $200k.

Remember the whole drive to push all the Techies out of SF? Remember rocks getting thrown at the Google busses? It's both.

At the end of the day Bezos makes headlines but his personal largesse has very little effect on most people in the country. It has very little impact on the lives of folks getting "pushed out" of SF. That's the folks he employs.


Those techies are often poor in their hometown. Many of them got a student loan, went to college, graduated in CS and then looked for a growing job market. Their own hometown offers maybe half the salary and some don't have any jobs at all.

They became rich the moment they entered the bay area. So hating on the "rich techies" is really misguided and will only further increase inequality.

Pushed out is a misnomer, really. If you have a booming housing market you should invest into more housing. These "rich" people will take the luxury apartments in 3 story buildings and the existing residents can keep their housing.

These things are not mutually incompatible. You just need to give one side what they need and they will leave you alone.


> Remember the whole drive to push all the Techies out of SF? Remember rocks getting thrown at the Google busses? It's both.

This is primarily attributable to two causes:

1. distorted views that result directly from inequality and the extreme poverty some communities have: to the (stereo)typical Tenderloin resident, as person who is able to afford a modest 3/2 townhome appears to be vastly wealthy

2. the mistaken view of techies, themselves, as being in the same class as those who actually are wealthy, and presenting as such (including the disaffected/indifferent attitude towards those in even lower socioeconomic brackets), which reinforces (1)

> At the end of the day Bezos makes headlines but his personal largesse has very little effect on most people in the country. It has very little impact on the lives of folks getting "pushed out" of SF. That's the folks he employs.

That's so out of line with actual reality it's best classified as "not even wrong." I don't even know where to begin with it. The people pushing others out in SF are not Bezos' employees; they're a tiny, tiny fraction of tech workers, most of whom won a VC/IPO lottery.

Bezos and his social class benefit immensely from the lower socioeconomic classes in-fighting. For example, by some thinking paying a laborer more will lead to more inequality.


Sure, but reducing inequality is as much about pulling the bottom up as it is pulling the top down. If you bring people closer together you solve both (1) and (2).

But you're all over the place arguing that pulling some in the bottom (SWEs) up will increase inequality.

Unless you believe--quite wrongly--that SWEs aren't in the bottom....


I'd be shocked if software engineers aren't in the top 10% in the US.

The top 10% requires an income of about $160k/year. Quite a few software engineers in high and very-high cost of living areas make that--but the vast majority don't.

See: https://www.investopedia.com/personal-finance/how-much-incom...

Look at the wage growth for the 90th - 95th (top 10% to top 5%): it's in the bottom.

The distribution of salary for Senior SWE is found, e.g., at https://www.salary.com/research/salary/alternate/senior-soft.... The median is $115k, the 90% is $130k--still not the top 10%. Even when you bonuses the salary curve shifts right by less than 10% (e.g. median goes to about $116k, 90% outlier to $138k).

Some 4 million people in the US work as software engineers (https://en.wikipedia.org/wiki/Software_engineering_demograph...). FAANG accounts for, what, 1% - 2% of that? Maybe a bit more, but not much. The vast majority don't have high TC, most of them are paid a flat salary with a modest bonus and either have ESPPs or no equity at all.

Software engineers are laborers, in effectively the same social class as manual laborers. Our economic circumstances are better, but not that much better.

Your comment is a great example of how the huge inequality gaps and the infotainment media have distorted perceptions among workers.


Inequality is mostly about not being able to compete for local goods such as homes or healthcare. When others can outbid you by an order of magnitude there wont be anything left over for you. In this sense Jeff Bezos doesn't matter, he wont buy a hundred thousand homes in the bay area even though he could afford it.

Are you talking to people in the 0-$50k range (below median) or in the $50-$200k range (above median)? Opinions probably diverge.

If you think through it, the billionaires don't have all that much real resource to be used - eg, J. Bezos owns an island in Hawaii. So say the government takes his island off him and redistributes it to low-wage earners in New York - they can't actually use the island for anything. They'd sell their stake in it and go for real resources locally. The actual real resources they consume are going to be made up for by the upper-middle class having less.

If anything is done about income inequality, it is probably going to involve bringing the above-median types more into line with the below-median earners. There aren't many ways around that - low earners need real resources, not paper money. Billionaires tend not to have the amount of real resources that are needed.


>They'd sell their stake in it and go for real resources locally. The actual real resources they consume are going to be made up for by the upper-middle class having less.

That is not necessarily true if you can produce more of the resource. The extra money would drive up prices and thus make it more profitable to run a company that offers the resource. Housing is artificially restricted but the technology to build denser housing exists. Taking the island is not really a sound strategy though, because it is much more efficient to just borrow money and give it to people through government stimulus. CPI inflation will eat at the value of unproductive capital like the island away on its own.

>If anything is done about income inequality, it is probably going to involve bringing the above-median types more into line with the below-median earners.

There is no meaningful difference between lowering the top and raising the bottom. Wealth tends to flee easily so increasing the bottom is a more reliable strategy. CPI inflation is generally a force that does both at the same time.


> Well, this is a lot like the housing conversation in the US. "I want my house to go up in value, and be a great investment!" Also: "Why can't I afford a house?"

This problem isn't unique to the US, and exists in Europe too, as well as New Zealand and probably other countries too. For this particular point, the US and Europe aren't all that different.


I live in the US, in a major East Coast city. FAANG level income lets me live a fairly worry-free life in a nice neighborhood, including a nice 2-3 bedroom flat and a private school. It's a tremendous luxury, for which I'm greatly appreciative.

Many of my colleagues in Europe, make far less than 1/2 of what I do from a compensation perspective. However, they're able to live essentially the same lifestyle I am. Nice flat in a vibrant, walkable, top-tier urban locale with the ability to afford most things in life. They're able to do so because they have less worry about surprise medical bills, paying to care for their elders, saving $200k for the kids' college, etc. My employment is also at will. I can leave or be forced to leave at a moment's notice.

Obviously, I'm only offering anecdotes here, but (IMHO) once that lifestyle moves out of reach, then companies will be forced to increase pay.


> They're able to do so because they have less worry about surprise medical bills, paying to care for their elders, saving $200k for the kids' college, etc.

I think that makes up a large part of the difference. In the US, those things are pay on use. In Europe, they're done through taxes that everyone pays.

If you don't have kids, that can be a substantial difference. I do not, so I don't have to pay into a college fund, or pay for healthcare for kids, or private school, etc, etc.

I think once you take it as a given that you pay for those things one way or another, it evens out a bit. Probably slanted a little bit towards more pay in the US, but not by nearly the gap between a single 20-something SWE in the US vs the EU.


> You can't have low inequality by definition if you decide to start paying one group a ton of money.

The inequality exists between those who need to work for a living and the ownership class that does not.


One of the issues that I know Canada faces (having been in this exact position) is a southward "brain drain". There is no small amount of top talent that graduate from Universities and ship out to SV, or of top talent that seek out remote gigs in the States.

The remote work proposition in particular is extremely enticing. Getting paid in a currency with 10-20% more buying power while still receiving the same government services was pretty swell.


We’re talking about upper middle class jobs though, not billionaires. Seems like giving SWEs more crumbs from the billionaires’ slices (because the alternative is that the investors and execs take the difference) is only going to reduce inequality. Which isn’t to say that this is optimal from a welfare perspective, only that enriching SWEs isn’t incompatible with lower inequality.

What matters is wealth inequality by top 5 to 1%. Some wealth inequality between the lowest 80% to the top 20% to 5%, on which devs are, is actually somehow desired - ensures that people are going to work those harder jobs, requiring more responsibility.

This does not mean that devs are supposed to earn millions, but 2x or 3x average salary is not the inequality that's ethically bad.


We seem to have it both ways in Australia somehow

A SWE might make like 5 times what a teacher makes but a CEO can make like 1000 times what a SWE makes (eg $50k for the teacher, $250k for the SWE, and $250M for the CEO).

What kind of CEO makes 250 million?

Microsoft's CEO made ~44 million last year, and Microsoft is a trillion dollar company (https://www.bizjournals.com/seattle/news/2020/10/20/microsof....)


Sundar Pichai

Well, there's papa elon who made $2.3B in 2018. Though, I agree, that's a massive outlier :) Zaslav at Discovery was next in line with $129M total comp in 2018 [1]. Sounds like Satya needs to ask for a raise ;)

[1] https://www.hollywoodreporter.com/news/discovery-ceo-david-z...


That's because he's a founder and major shareholder, not because he is CEO.

You’re confusing compensation with stock appreciation.

One might guess that all the random labels you put before the numbers makes few difference. At the end of the day, it’s a large gap in incomes.

The point is that at this point Tesla itself could pay Elon Musk absolutely nothing. His stock appreciation as a shareholder is where the majority of his income is coming from. It has nothing to do with CEO compensation at that point.

It has nothing to do with “labels”. There is a fundamental different between what a company pays its CEO and what the value of its shares provide through appreciation.


From a business account analytics point of view, the difference matters.

From a social analysis point of view of incomes inequalities, they are just random labels.


> From a social analysis point of view of incomes inequalities, they are just random labels.

FFS, one is not even income. So they aren’t the same if you care about even talking about income inequality.

An equity stake appreciating in a company is not actually income until you sell it and realize the gain. For example, if Amazon’s stock price doubles, none of the shareholders have made any income until they sell it on the market.

This distinction matters because stock owner equity appreciation has literally nothing to do with the amount the board has agreed to pay the CEO. They give a salary and a fixed number of shares with maybe another fixed number of shares if performance numbers are hit.

All of the obscenely rich CEOs are also major owners and their net worth is a bunch of unsold equity in the company. Being mad about companies becoming valuable and making shareholders wealthy is a completely different argument from income inequality. Shareholder appreciation directly benefits 401k holders, etc. and you’ll find a lot less support for putting a cap on how much a company can be worth.


What if you are compensated in stock? You are unlikely to liquidate your stock on your payday so it is very likely for your stock compensation to have risen in value by the time you want to sell the stock.

It doesn’t matter. The amount the company paid is the price of the stock at that particular grant time.

I believe you're vastly overestimating the CEO earnings. I doubt you'll find many 8-digit CEO earnings, let alone 9-digit.

Almost no CEO makes anywhere close to 250 million.

They pay peanuts then say we need more programmers. They also say managers are really valuable while we have plenty of those. Programming is also a really intense job, pretty much no one can do it for 8 hours straight and managers sit on their ass drinking coffee all day with brief interruption by tasks 85% should have been automated 20 years ago.

> managers sit on their ass drinking coffee all day

You have experience with some really terrible managers. Have a look at other places.


If you increase housing stock, there can be more cheap homes for new entrants in the market, meanwhile existing homeowners may still see significant appreciation on their home value, depending on lots of market variables.

Wanting affordable home ownership is not contradictory to growth of home asset prices.

I also think your argument about income inequality is not right. Achieving income equality by suppressing wages and paying below competitive market rates is nothing to be proud of - and largely for professions like SWE, it has absolutely nothing to do with income levels at the low end close to poverty, which is what matters when understanding income inequality.

We should be raising purchasing power and unlocking possibilities for people. That’s the real purpose of reducing inequality.

Otherwise we can just take the trivial solution: destroy all technology and return everyone to subsistence agrarian society. Near perfect income equality, near zero societal level wealth.


> paying below competitive market rates

That does not make sense. How is it below competitive if every company in Europe is paying in same range? By definition it is competitive.


The talent they are competing for can work anywhere, and this untethering of geolocation is only increasing. The relevant market of candidates for large European cities is increasingly just a pan-Western talent market, and lower cultural salary norms are really hurting Europe, leading to brain drain and reduction of major tech hubs.

That does sound like a pretty stress-free way to live!

That said, living in Europe doesn't always equal good living conditions and stability - it depends on the particular country you're in as well.

My net salary is just over 1000€ per month as a software dev. My living expenses eat up around half of that. If a quick search turns up that in USA the median salary for a dev is around 100k$ per year ( https://money.usnews.com/careers/best-jobs/software-develope... ), that means that i'd need anywhere from ~8 to ~14 years to save as much as they could in a year (depending on their disposable income, taxes, currency value etc.).

In short, i'd much prefer not to spend a decade to get to the point where i'm as financially stable who's worked for a year, if even that.

People oftentimes mention purchasing power parity, but it breaks down in a global economy: for example, i cannot afford AWS and most SaaS/PaaS tools.

That's just one of the reasons why one could look for a better financial situation. Compound interest and investments in general could be another. Stability and peace of mind, although not guaranteed, could be a third.


> My net salary is just over 1000€

That's really low, even for poorer European countries. Decent middle-level software engineer in, let's say, Ukraine (no offense meant - it is a good country, just isn't one famous for high incomes), easily makes at least 2k (and I say "at least" - that's awfully underpaid).

> that means that i'd need anywhere from ~8 to ~14 years to save as much as they could in a year

That's a bit exaggerated figure. It's 100k before taxes (so, around $5.8k/mo), and rent (or mortgage) costs are significantly higher (I believe it's around $1-3k/mo, highly varying depending on where you live and how comfortable you live). And it's not just rent but other expenses as well.


> That's really low, even for poorer European countries

He said net salary. I know a lot of engineers from C schools in mid-size towns in France who are paid less than 2k euro net.


France is really terrible in terms of SWE compensation. I think I know why. I've had some traineeship / internship requests from French students and their mentality seems so much more like "engineering" career trajectory than "hacker".

Engineer: "yes, of course it is normal to be a trainee for 2 years, then a junior for 5, then a medior for 5 and of I'm really good I'll be a senior. I would be really thankful if you consider hiring me." With this mindset you don't expect high wages.

Hacker: I am a ninja rockstar, I don't need any certifications and you should be happy if I decide to work for you because I should actually be working at FAANG.


Well... just because a developer claims to be a senior engineer (with only 2 years experience) it doesn't actually make them a senior engineer, it makes them a bullsh*ter :D

Just like the fresh out of school CTOs and Principal Engineers in the US. Of course you get a fancy title, you're one of the founders in the company - it doesn't mean you know anything though =)

I know its kind of informal but do you have any current remote internship opportunities?

I'd rather work with the 'engineer' than the 'hacker'.

I've worked with quite a few people who had "15 years of experience" which would be better described as "one year of experience practiced 15 times".

The main thing that such an internship-apprenticeship system guarantees is that the newer generation is well-versed in the ways of the old generation, and will likely have a similar record.

In a conservative industry, such as civil engineers building bridges, roads and buildings, and electrical engineers building high-voltage electrical distribution systems, this is what you want -- those industries have converged on good safety records. You want a few people who innovate, but otherwise much prefer to delay the future by 10-20 years than to the potential risks of bringing it sooner.

If the same was prevalent in software, we'd likely still be coding in COBOL on IBM mainframes.

Tesla is a very interesting case study - actually managing to bring the future sooner (with relatively small accumulated damage so far) in a field where being conservative is considered a virtue.

If you'd rather work with the apprenticed person, this model still exists in banks, who are willing to pay big bucks to maintain their cobol backends.


I didn't refer to the apprenticeship model. I referred to the bullshitting 'hacker' type referring to themselves as a ninja and acting like the work he's doing is beneath them. I wouldn't want to work with that guy.

And it taking 5 years of work experience for you to call yourself an experienced engineer does not mean we'd be stuck with COBOL. It usually takes that long where I work and it's not a bank. You're very likely to use our products right now.


In Ukraine, however, the reality is that most of the engineers are employed as PE (private entrepreneurs) with some additional things included, like a decent insurance. And the overall tax for this scheme is just 5% so far. No other benefits or bonuses usually. So, NET almost always equals GROSS here. In absolute numbers it is something like USD 25K - 70K per year for junior - senior/TL range.

That's still insanely low. With all these people reporting low salaries in constantly thinking where on earth are you when a European startup is hiring talent :D

You can play with the numbers here [1] for France. You're right that beginners can be around 30k€ before taxes (although that's a little low), which gives less than 2000€/month after taxes.

[1] https://mon-entreprise.fr/simulateurs/salaire-brut-net


I am honestly surprised. Even a bottom of the barrel public entry level job with worse compensation than private industry pays at least 2k€ (after taxes) here and that's in a place where you can get an apartment for 500€ per month.

What is a C school?

Agreed, my particular situation might be caused by the fact that i initially started working at my present company before finishing my bachelor's and am currently working on finishing my master's. Since the initial salary i was hired with was even lower, it has never quite caught up - job hopping might address that.

But even so, the average net salary in this country is even lower than that (overall, not for software developers) and i don't have kids or a car to take care of, hence others could also have those expenses to consider.

Thus, factoring those in, it might indeed take a substantial amount of time to create any savings. For example, i presently have 25k€ in my bank account, though it has taken about 4 years to get there.

That's not to say that people in US or other places also don't have similar factors to deal with, like healthcare costs or student loans.


I was in the same position when I started working at the first company.

They just continued to pay the same salary after I graduated.

Until you reach senior level, the best strategy for maximising salary is to switch to better paying jobs every ~2 years.

Also, I assume you are from Latvia as you have LV in your username - 1k is waaay to low. I have friends making 3.5k eur a month. You can find mid level positions that pay more than 2k/m


Yep, that's the plan!

There is also something to be said about working for different companies and experiencing different approaches to development, different tools, tech stacks and all of the other stuff you might not see if you stick at one place for a long time.

Though that's more of an auxiliary reason for switching jobs, whereas OP was talking about finances in particular.


If Ukraine legitimately has an average net salary of 2k for a SWE it's better than the actually good parts of the EU. I really, really doubt that this is true.

It's the same or even more in Romania (depending on the parts of the country), I do not know why everyone is surprised about it. There are a lot of benefits there that SWE (and IT in general get) - less taxes if you have a CS degree or you can open a company or be self employed and pay next to nothing in taxes. Since there is an increase demand and not enough supply salaries keep rising. In the end you might get a better deal regarding COL if you quit your western European salaried job and move to eastern Europe.

Ukraine has special tax laws for Software Developers - even if they are working full time on-site for a single company, they can register themselves as freelancers and pay virtually no income tax.

I considered moving to France for a few years (from the US), but I was shocked to find it would be a 40% pay cut, even after factoring in all of the healthcare and other expenses we Americans enjoy. And the cost of living is a fair bit higher in France to boot.

Now that companies are cozying up to remote work, I think I’ll jist do more frequent 3 month trips and work in the evenings when I run out of vacation days. Then I can keep my cushy American salary and afford to travel, avoid dealing with VISAs, and France get my cost of living / tourism money without me taking a Frenchman’s job. Seems like a better arrangement all around.


> I think I’ll jist do more frequent 3 month trips and work in the evenings when I run out of vacation days. Then I can keep my cushy American salary and afford to travel, avoid dealing with VISAs, and France get my cost of living / tourism money without me taking a Frenchman’s job.

Hopefully countries will also warm up to remote work and will create legal avenues for individuals to do remote work while still paying taxes.


I've already seen visas like this popping, under "digital nomad" visas, but none of them are in "developed" (ex. G7) countries. I suspect those will be the last to adopt them, since they don't really need the tax/tourism dollars as much. For them, the primary purpose of immigration is to fill jobs in the country, which remote workers don't do.

watch out, if you spend more time in France than in any other country (not just 183 days per year), then you will be considered a fiscal resident of France and therefore taxable on income. in addition, you can't really work remotely and avoid employment taxes, pension contributions, etc... this is only tenable if you spend a minor portion of the time in the country (like any other country, really... states need their taxes obviously).

Yeah, I would probably be in the US for at least 9 months out of the year, and I’ll take a closer look at the tax implications when the time approaches.

> avoid dealing with VISAs

VISA is a name of a company. What you mean is just "visa".


shrugs in autocorrect

> My net salary is just over 1000€ per month

You would be underpaid in India, where I live, let alone Europe.


> My net salary is just over 1000€ per month as a software dev.

You're way underpaid even for Latvia. The national average now is 1100 EUR gross, or 812 EUR net (https://www.lsm.lv/raksts/zinas/ekonomika/videja-alga-uz-pap...), but for the IT field the average gross is 1829 EUR, which I believe is around 1300 net. Unless you're somewhere in Latgale where everything is much cheaper, or unless you just graduated last year, your net income should be at least some 20% higher.


That seems really underpaid. I live in south east asia and my net pay is above 4000 Euro (excluding year end bonus which could be 6 to 12 months salary) . There is no social benefits though.

Why would your year end bonus be equal to your yearly salary? That just seems out of whack.

South East Asia could mean Singapore or Cambodia. Huge difference between those countries

The ferries to Stockholm is right around the corner. There are 13 software jobs to the dozen, you don't need any paperwork to work there, and €4k per month would be considered "bad" there. If I was in Latvia and spoke english I'd do it in a heartbeat. Even if I couldn't physically move, I'd definitely try to get a remote job from there even if it meant a slighly lower pay than an on-site one.

Obviously, you'd have much higher living costs and the weather would be slighty worse, but lets face it no one lives in Latvia for the weather either!


> over 1000€ per month

I would like to know what country/city you are based out of. In the US, that wage is well below the poverty line.


That's not all that uncommon in eastern Europe. I used to earn 5€/hour at my first programming gig in Slovakia. LV in the parent's post likely refers to Latvia.

In fact, even in the first world countries like Italy or Spain it's not uncommon to earn less than 1700€ net.

Here in Finland, 80% of the US GDP/capita btw, some entry level positions are at 2000€ net.


I graduated with 2 bachelors degrees and a masters degree with no debt through scholarships and grants. I have saved nothing for my children’s education. If they want to attend college, it is on them to pay their way just as it was for me. I’ve told them that I will help a bit during their first year. My company matches my retirement savings up to 5%. I save nothing else for retirement. I should have millions of dollars in my retirement fund by the time I retire (I already have over a million). That plus social security should take take care of my retirement. I have a very comfortable job. I live about a 15 minute leisurely bike ride from campus. I work 20-30 hours a week. My company doesn’t track my hours and as long as I get me assignments done everyone is happy. I can take up to 6 weeks of vacation a year plus 10 more fixed holidays that everyone gets. My health benefits are frankly amazing and cheap. On top of all of that I receive a very healthy six figure salary. There are many hundreds of developers at my company that are similarly blessed. My point is that it is possible to receive a very good salary while still receiving many of the benefits you claim.

> If they want to attend college, it is on them to pay their way just as it was for me.

You seem to be completely unaware of how wildly the cost of education has increased even over just the past decade, especially for 4-year institutions.


It depends on the university. I just checked and the university I attended is only about $750 more expensive per semester now than it was when I attended 2 decades ago. Not all universities jacked up their tuition.

Where? You seem to be completely unaware that cost of education varies by country.

How? FIU is 7$k per year, that's not prohibitively expensive. I don't understand how people get out of college with $400,000 in student loans.

400K is the folks doing things like med school. I doubt the average is anywhere near that. People getting loans for more than just tuition can easily hit 100K, though. IIRC the university I went to, which is a state institution, lists the average cost at about $28K a year including room, board, tuition, books, etc. So if someone wants to pay for the whole thing on loans and not work any kind of part time job, they're going to end up with a mountain of debt.

> I graduated with 2 bachelors degrees and a masters degree with no debt through scholarships and grants. I have saved nothing for my children’s education. If they want to attend college, it is on them to pay their way just as it was for me. I’ve told them that I will help a bit during their first year.

I just want to point out how incredibly, incredibly rare that is for anyone to have that experience in the US today, where according to you:

1. You were able to graduate debt free, and since you say you had no debt "through scholarships and grants", I'm taking that to mean your parents didn't pay for your college. While that is certainly possible (e.g. some colleges offer free rides for very top students), it is VERY rare.

2. You intend to save nothing for your children's education. That is not only exceedingly rare, pretty much all financial aid packages expect/require a certain amount of parental contributions. You better hope your kids get lots of scholarships and grants, otherwise they won't be going to college.

Personally, I went to a top US university. I had some grants and scholarships but my parents still contributed a good part to my first 2 years, and I graduated with considerable but manageable debt. I've worked in software jobs over the past 2 decades, including 1 company where my stock options were worth a considerable amount, so I've saved a lot. I work considerably more than 40 hours a week, so honestly I'm quite envious of your "20-30 hours a week" story - I don't know any job where you can work that little and still get paid that well. I see a very large portion of my salary every year go to healthcare and retirement, and as I am childless I don't have to save for my kids education.

I mean, I'm doing quite well, and I still have anxiety about all the things I need to save for. I can't imagine making a more median-level salary, with today's cost of education, and with kids, and not being much more stressed at the prospect of having to handle everything financially.


Yea I am sorry but earning millions for 20 hours of work a week isn't normal in any kind of job I've seen. So count your blessings and luck. Normal this ain't.

Agreed - a lot of the parts of his story I thought "OK, that sounds extremely rare, but possible", but the working "20-30 hours a week" bit? Where the hell is that? Do people at FAANGs honestly work 4-6 hours a day 5 days a week?

I don't work at a FAANG. Not even close. I've been working remotely for most of the last year (just like everyone else), so I do about 4-5 hours of work in the morning and then spend the rest of the day remodeling the house. But even when I worked at the office, I would roll in around 10am. I'd go work out at one of the campus fitness facilities from 1-3 (15 minutes to walk there, 5 to change, 1 hour to work out, 10 minutes in the sauna, 10 minutes to shower and change, 15 minute walk back), and then head home at 5. And I always get exceptional year end reviews because I always get my work done in a timely manner.

> My point is that it is possible to receive a very good salary while still receiving many of the benefits you claim.

A lot of things are possible but not probable.


First rule of the Happy FAANG Employee Club is to not tell anyone about how awesome your job is.

Yeah, except I don't work for a FAANG. I don't even live within a 1000 miles of any FAANG campus.

The irony is that with all your knowledge you can't see that even if that is a universally desirable situation it isn't scalable.

To the entire population? No. To developers in Europe? I would say yes. If we can have similar benefits to what they have, they can have similar pay to what we have.

Well you’re situation sounds a bit extreme, and at the extremes there are also people making 6 figures in Europe, especially in the UK and maybe some central/north countries.

Switzerland is an outlier, but there many senior devs end up above 100k.

> I have saved nothing for my children’s education. If they want to attend college, it is on them to pay their way just as it was for me.

That's a pretty scuffed mindset, man. Set your kids up for success. There's no virtue is going head first into crippling debt.


So, “fuck you got mine” basically?

No? How could you possibly get that from what I said? Quite the opposite. I'm saying that they (developers in Europe) should be able to be paid the same as developers in the USA.

Your solution doesn't scale. How many devs can do this? 1%? 5%? 20%? What about the rest?

At my company it is 100%. And we are not a FAANG company. I have a sister in law that works as a developer in another non-FAANG company that makes about $100k more than me. I don’t think it is as rare as you think for developers to have good benefits and high salaries.

Soooo... You think this is how things should be?

My point is that if I in the USA can have similar benefits as developers in Europe (based on OP's comment) then they should be able to be paid the same as developers in the USA.

OP seemed to be saying that because of all the benefits it was okay they were paid so poorly. But we can have similar benefits here, so they can have similar pay there.


Can

You realize in Germany these "benefits" are available to literally every citizen, right? That means _every developer got this deal, here.

So here is the thing: You can get obscenely rich here, too.

What's your point, really? That you can get rich in America, as a dev? That rich people get all the benefits? Your take on parenting?

Really insightful information there. Thanks for sharing....


> I got here by taking no risk at all.

This is the most European thing I've ever heard. Most people would not like to take risks and would not even think about stepping outside of their comfort zone. Personally, I think this is the reason why there are less startups in Europe compared to US. No one would like to take a risk unless it's absolutely necessary.

> I have worked 20 years in the same job and so have my colleagues.

I do not mean to be offensive and I know everyone has their own cup of tea. But 20 years doing the same the job?? This would literally be death to me personally as a software engineer. Changing your job is part of your career growth in-order to expose yourself to new challenges, problems and new environments. Of course this comes with a risk factor and personally, this risk and excitement is what makes life interesting. I would kill my self if I got stuck in the same job for 20 years.


I can see what you mean, it does however assume that staying in a job is the same as being stuck in a job, doing the exact same thing you were doing 20 years ago - perhaps this assumption is a reflection of US work culture (you tell me, I don't know)?

If you have a good job with a stimulating environment, colleagues, and decent pay, then the perception of being stuck does not exist. Over time the role will change to reflect the changing organisation and role.


> Over time the role will change to reflect the changing organisation and role. > perhaps this assumption is a reflection of US work culture (you tell me, I don't know)?

I do not know anything about US work culture from first hand experience. I'm a software engineer from Sri Lanka working in Germany as a software engineer. It was my personal opinion and as I've said everyone has their own preference.

> Over time the role will change to reflect the changing organisation and role.

If the role has evolved, then it will not be the same job you did 'x' number of years ago. But according to original post, OP says "I have worked 20 years in the same job". Maybe I understood it incorrectly, but it seems like the role hasn't evolved or changed at all.


Yes, sorry, I meant same company. My role of course has changed although I'm still a developer/architect type, it's obviously changing all the time. I have been offered management type roles but consistently rejected them though so it's almost the same "job" too (developer). That my business card might say "Senior developer" or "Architect" doesn't really change what the job is I think.

I'm in the EU, took more risks than most people I know, step out my comfort zone also multiple times. What most people miss is not the willingness, but the safety net.

Results? Unimpressive, fails over fails.

I know value the steady job I have and I keep tearing myself for not opting for this sooner. I don't know if I would be already burnt out if I haven't tried, but timing wasn't great, that's for sure.


Could you elaborate a bit more on what you tried when you stepped out of your comfort zone?

I pick a few key moments. Moving to the capital from my hometown ($30 in my pocket), abandoning college, start working as a self taught developer, quitting my job to work on a startup, moving abroad to chase another startup dream with $100 in my pocket, later doing the same, but in Germany. Trying to freelance. Then work in education for a programming bootcamp.

I can still see some uncomfortable situations ahead of me, but I'm not afraid to embrace them.


> This is the most European thing I've ever heard.

Thank you

> This would literally be death to me

I think how often you change jobs depends on the challenges and type of work. My first project was over 10 years from start to initial release.

I don't think switching jobs is that necessary if you can be challenged in your current job. Ever changing problems are exactly why I'm staying. I tried switching to do some web work in a couple of places, but found that I really hated it and that most things in the "web stack" are just crud and it's really hard to find really hard or complex problems in the space (Where the complexity isn't in something tangential like ops/configuration/scaling...). I'm an engineering/math type person so it's a bit scarce.

I keep a constant lookout for new jobs, but I filter out 99% of positions simply because it looks like generic web tech jobs.


> No one would like to take a risk unless it's absolutely necessary.

It's mostly a rational calculation. Because of crab mentality and stigma of failure, the downside is worse in Europe. The expected value of risk is lower than in America.


> Changing your job is part of your career growth in-order to expose yourself to new challenges, problems and new environments.

A lot of people prefer work to live, while others prefer live to work. Both strategies are perfectly fine.


Yes, but you have to live with the consequences of your life choices.

If you just "work to live", then you'll be just an average employee, with average salary. High salaries and other perks are for high performers.


> High salaries and other perks are for high performers.

Or for loud mouths with increased tolerance to risk.

We like to think that the world is much more meritocratic than it is ("just world hypothesis").

And I say this from the camp I'm describing above.


> I got here by taking no risk at all. > This is the most European thing I've ever heard. Most people would not like to take risks and would not even think about stepping outside of their comfort zone.

In some sense this is true, but lets not get carried away. The American Startupism is all about the flash, big growth, big impact, big IPO. In EU you have companies slowly grinding a hard problem for 20 years that also have huge impact but no flashy news. Look at things like vertical farming, ASLR, fintech. Thats all thanks to low risk and stability.


I have come to the same realisation. I would rather have a better quality of life than I had in US than to get tons of $$ and live off in a gated community. Great public transport, healthcare, schools, world class Unis, top notch research institutes, and great cultural institutes. The Gemeinschaft approach works here because you need to contribute back to the society in order to reap it's benefits.

100% this. As an outside observer, the US is country with an almost impressive list of societal issues. Inequality aside, it's filled with a hermit-like population with little to no knowledge of the world outside its borders unless they visited it as part of military action, failing power structures, regular school shootings, suicide bombings, riots, an uncontrolled pandemic, insurrection, religious extremists and a volatile political situation, at best. No matter how much danger money you have to build into a salary to attract or keep staff, no thank you.

Recommend you take a break from the news then.

I am more shocked how you messed up basic things like zoning.

Single family house zoning? Really? Who the hell needs that? Heck, I will go one step further and declare that nobody needs exclusive residential zoning. You are building a von Neuman bottleneck (separation of commerce and residential areas) into your society. A lot of social issues stem from this incredibly bad idea.


Wait what suicide bombings (barring Nashville)

As a software engineer your leverage should be higher than near any other profession. This is why SV engineers are paid handsomely. Your productive output eclipses that of any profession without force multipliers. Your income should not be based on input (risk, comfort), but rather your output (scale, value).

I think it's just a story that software engineers like to tell themselves to feel better about earning more than almost everybody else. Meanwhile, there are plenty other "force multipliers", who are paid a pittance. Even a cleaner is a "force multiplier" - they enable people not dying from diseases coming from dirt - that's much more in terms of multiplying output than we do (without cleaners, everybody dies and there's zero profit).

Salaries are never based on any of those concepts. They are simply determined by how much it would cost to replace you. It doesn't matter that you generate billions if somebody else would accept to do it for less.

It’s based on value but if my value is X and there are many developers who can do my job for my salary Y then it’s not X but Y that’s the pay.

There is a scarcity of talent here too but in order to take advantage of it you typically have to actively seek higher pay. I just don’t want to switch jobs, it’s not that I don’t want higher pay.


Based on this premise any teacher should be payed an incredible amount of money considering they are literally creating the bases to allow professionals like us to generate our "force multipliers".

I absolutely agree that they should be payed the same way as SW.

based on your output and how many people can also create the same output.

that's what drives down the price. as long as other people are willing to create the same output for less money, you will be paid less


> Your income should not be based on input (risk, comfort), but rather your output (scale, value).

Why?


Because people pay for output, not input. They don't care if you bought a pencil from someone else or grew the tree, made the paint, etc all yourself. They buy a pencil.

That does not answer the question. Why should someone's income depend on their output? Why is that the ethically correct outcome?

>> That does not answer the question. Why should someone's income depend on their output? Why is that the ethically correct outcome?

Because anything else is wishful thinking at best and destroys society at worst.


As opposed to the current system, which is...not destroying society?

>> As opposed to the current system, which is...not destroying society?

I guess people can have different definitions of "destroying society."

I grew up in the USSR where you literally lacked physical stuff in your life that people in the rest of the world took for granted decades prior. A huge contributor to that was that people's work was rewarded on a metric other than their productive output, as measured by what society was willing to pay for in the free market.

To put it another way - we need people to produce. And we need them to produce the right stuff. The best system we have to deciding what's right is what other people use their dollars for.

If we paid people on some other metric we'd end up with a lot of bullshit work, no aspirations, and physical shortages.

I am sure your definition differs.


> I grew up in the USSR where you literally lacked physical stuff in your life that people in the rest of the world took for granted decades prior.

Define "rest of the world" because for the time period when the USSR was in existence, my part of the world was either actively being colonised or foundering in the neocolonialist wake of independence.

And that's the crux of it, isn't it? The world's foremost capitalist states (and the imperialist states that preceded them and laid the foundation for their current success) aren't less destructive than the USSR or than Maoist China. They simply had/have the dubious luxury of externalising the destruction and misery (and hiding it where it exists at home, in the poor and marginalised). The West built (and still builds) its abundance of "physical stuff" on the sweat, tears and sometimes literally blood of the developing world. Today's "free" market runs on the back of sweatshops, destabilisation and child labour - there has to be inequality and suffering elsewhere for companies to afford to put up the prices that consumers have become entitled to.

But hey, that destructiveness is not in your own backyard, so I suppose it doesn't exist.


Ma'am, this is a a Wendy's. the question was whether people should be rewarded by the value of their output to which the answer is obviously yes.

I am not sure the crazy town you are taking this to. But in case it somehow helps you understand - the USSR was horrible to its own people and to neighboring countries, forced labor and all, and still wasn't able to provide basic shit to anyone but the party elite.


Because otherwise outputs go down, with people naturally making effort to do whatever it takes to qualify for the best compensation, rather than actually doing something productive (as high outputs is not it). As the result, the whole economy (and thus, society) struggles.

Check history of the Soviet Union - it was a glaring issue there.

anoncake 11 days ago [flagged]

Have you considered that in a discussion about the USA a modern Europe the Soviet Union might possibly be completely fucking irrelevant? But yeah, my bad, I keep being naive and assume that people try to interpret what I say in a reasonable manner instead of shouting COMMUNISM!! SOVIET UNION!!!

Which famously struggled because it didn't overpay its software engineers enough. So instead of doing productive work like optimizing ad impressions and creating DRM they all became garbage collectors and cleaners.

No, I'm not trying to engage in constructive debate right now. Apparently I lack whatever skill is needed to debate liberals without triggering their COMMIE!! reflex.


Please stop posting flamewar comments to HN and please don't take threads on generic ideological tangents. We've had to ask you this before.

https://news.ycombinator.com/newsguidelines.html

https://hn.algolia.com/?query=generic%20ideolog%20by:dang&da...


Please keep the discussion civil. I haven't said anything that you imply I had and no one called you a commie (or any other slur) or even used word "communism" at all.

I've just mentioned Soviet Union as prominent and well-documented example. Don't put words I haven't said in my mouth. Thank you.

Heck, this issue is not even specific to communism.


Why did you automatically bring "ethics" into this discussion? The person you replied to was probably using the word 'should' in reference to some other objective.

I automatically bring ethics into this discussion because I try to be a decent human being and actually care about the society I live in.

Someone said, roughly, that X should be like Y. You immediately asked them why this was ethically optimal.

To me that seems like a non-sequiter.

There is no reason to suspect that the optimization (with respect to whatever objective you desire, e.g. total happiness) of a large, complex, chaotic, system (such as a society) can be best achieved by using 'ethical correctness' as the only criterion for decision making.

At least, that's my opinion. I hope that doesn't make me an indecent human being.


Ethically, everyone deserves all the blackjack and hookers they want, because we're all beautiful and precious creatures.

Practically, giving someone a direct incentive to do worthwhile things works out far better than some central planner deciding how much they should produce and how much they deserve. Somehow it always turns out that the central planner deserves way more than everybody else.


I’m willing to do without the blackjack but that’s my final offer

Compensation, in a perfect world, should be based on how much value you bring to the company.

It is clear that your perfect world and my perfect world are quite different.

Not again! The labor theory of value is rearing its head out of the grave again! Oh no! /s

You did not answer the question, you just repeated the initial claim.

You seem to be dodging the obvious: the "why" is because a company has no value when you are risk-free and comfortable because it gets nothing from the inputs towards you, only from your outputs. That doesn't mean it is exactly that black-and-white; your input and output are related. Then there is the availability thing; people with skills and experience are not easy to find so you often want to retain them at the company, and compensation is a great motivator.

If you need a hole dug by tomorrow and you have $1k to spend, you can either:

- Pay one person ($1k) with an excavator

- Pay ten people ($100/each) with shovels


I live in Germany and don't have any of those things. This attitude pisses me off to no end because it forces everyone into the subservient employee rut. I don't trust or want to rely on the government and pensions especially. Higher education and healthcare I like but at a primary and secondary school level they force you to go to school but the schooling they provide is not at an acceptable level. I would never pay for it if it wasn't free. Everything in Europe is designed around keeping the wealthy wealthy and the proles under the thumb. It's a deadend road. I support your right to choose this path but I don't agree it should come at the expense of the intellectually curious and entrepreneurial types.

Getting very rich allows me to do cook less, do less chores and build up my skill further (get better) or to pursue passions that do not pay well.

I calculated moving to Europe as a SWE would lead to a drastic lifestyle change for me—even with retirement, healthcare and children's education considered (with 2 children, Europe wins at 3 hands down).


Reminds me of something I read a few weeks ago. An old lady who lives in a cabin in the woods is being interviewed. The interviewer asks: "isn't it incredibly inconvenient that you need to gather firewood and light a fire every time you want to drink some tea?"

"Isn't it inconvenient that you have to work for someone else for 8 hours every day, only so you don't need to start a fire?"

I'm positive you can do all of those things with an average salary, at least in northern europe. There is little to worry about once you have a roof over your head. You may not have that Tesla though.


I recently learned, people worked less when we were hunter/gatherer, had more leisure time.

I don't want to skip on modern medicine and shit, but it does make you think...

[*] https://www.youtube.com/watch?v=Yocja_N5s1I


Most hunting species are only active a few hours, because most prey species are only active a few hours a day, because there isn't exactly an excess of food or personal security in nature.

Gathering also doesn't make sense as a full time occupation, as most plant species only fruit / produce edibles infrequently, and even then you are competing with wild animals (birds eat far more from the local wild raspberry plants than I do, even when i think to try picking some).

Farmers, conversely, often work from before sunup to after sunset. Whether it is sowing, harvesting, animal husbandry, or maintenance of buildings, fences, equipment, there is no shortage to be done.

All this is to say, hunter / gatherers didn't have some secret to a life of leisure, they minimized energy output to deal with food insecurity and general difficulty actually hunting amd gathering.


The guy in the video says people played, made art and fucked. Humans are not predators, we're opportunists by evolutionary trait turning hunters rather recently.

And you too can go live in the bush and do all those things until you get a toothache, parasites and lose a few kids to infant mortality.

Depending upon where one is in the world, even in large wilderness areas, the volume of game has decreased significantly from the pre-agricultural era. Still wouldn't trade a more-abundant bush with modernity, but it is interesting to consider the relative conditions that would make it easier historically.

It's true, hunter gatherer societies have a way of getting out competed.

I imagine the quality of the leisure time as hunter/gatherer was much lower than what you have now. What are you going to do with your leisure time? Count how many of your children have survived winter?

I tell you a secret: When you are getting older and still solving the same issues because you are not John Carmack, you might release that cooking is actually quite great.

Its stress reducing in itself and versatile.

Nonetheless i also think its a better strategy to become rich enough fast and then retire earlier to have more time for myself and to cook more and do other normal things myself more often again.

As long as i don't have a realistic chance of getting so rich, that i can buy an island, or/and travel for 20 years firstclass, my life will not change anymore in any significant way with me earning more money.


> I calculated moving to Europe as a SWE would lead to a drastic lifestyle change for me—even with retirement, healthcare and children's education considered (with 2 children, Europe wins at 3 hands down).

Curious - Can you explain your calculations and did they include a difference between price vs value?


However, higher SWE salaries don't lead to less cooking or less chores needing to be done. So that is not an argument why a society should strive to optimize for that.

That's very interesting, and I'm sincerely glad that you're happy. In the U.S., the value system is (was, at least) about personal ambition, talent, and action which determine if one "should be able to get very rich".

There's no shame in wanting to work for a company and focus on a work-life balance. Americans (again, traditionally) celebrate(d) those with higher ambitions and achievement. In Silicon Valley and the startup world (many of whom are on HN), the entrepreneur/founder vs. employee issue can be very sensitive.


Well if your company is doing well then someone is getting rich. Could be management, CEO, investors or whoever else. Sure you may be okay with it, but clearly not everyone is (hence the question).

At the very top of the parent orgs’ parent org is Warren Buffett, so I guess it’s him!

> I wouldn’t want to switch jobs just to drive up my pay even if I could [...] I have worked 20 years in the same job and so have my colleagues.

Honestly this part of the European mentality is hard for an outsider understand. I lived there for ~10 years and heard this argument countless times.

I want a fulfilling life and part of that is a fulfilling job. It's hard to believe a job on the same company can be fulfilling for 20+ years. Changing jobs is part of professional growth IMO.

Different strokes for different folks I guess.


> It's hard to believe a job on the same company can be fulfilling for 20+ years.

I don't see why not. I have never worked for small companies (always 25k+ sizes ) so my view may be skewed but the scope of these companies are so large that changing a project can mean totally different ways of working and sometimes totally different industries. Can it be that it's easier in europe to change your job context within the company and not so in america?

> Changing jobs is part of professional growth IMO.

Actually it's hard for me to understand why this is taken for granted in America and my home country India. Sounds like KPI chasing to me.


It's not KPI chasing. I've grown _so_ much after each job/career change that I often wonder how long would it take me to grow by same amount if I'd stay at a single job (I don't have that answer yet but I'm sure longer).

Changing jobs every 5 years-or-so is forcing yourself to learn a new culture and new set of skills.


> It's not KPI chasing. I've grown _so_ much after each job/career change that I often wonder how long would it take me to grow by same amount if I'd stay at a single job (I don't have that answer yet but I'm sure longer).

I don't know why you are so sure. I work with plenty of europeans who have spent 10+ years in a single company. They seem pretty smart and their ways of thinking are pretty much on par with my american counter parts. If you have some source to cite on this except for personal experience, which is tainted by the culture around you, that would be great.


> It's hard to believe a job on the same company can be fulfilling for 20+ years.

In my experience, the only companies I’ve been in where all my coworkers were first class was in the Netherlands.

I cannot see myself working 20 years in the same company in the US or Japan, but I think I can see myself doing it in the Netherlands.


Fwiw, I did change and change back.

If I was working in web/db/internet stuff there would be much more jobs of the same kind. Then I’d switch more too I think. The reason I’m sticking is also because I work in a niche (which I like).


I want a fulfilling job perhaps more than I want to make more money, which is why I don't switch from a fulfilling one!

Switching every two years to make more money would invariably mean that you switch from fulfilling jobs to less fulfilling ones (Assuming no fulfilment comes from the switch itself)!


I agree, it's basically risk-free here with paid education and the social safety net.

I’m also from Germany. There is significant wealth inequality, but making €40-60k pre-tax a year is very attainable for most developers here. In Switzerland, it’s even higher (€60-70k+) and they have to pay fewer taxes (with a higher cost of living).

But the „average life“ in Germany for a developer is very good. About 4-5 weeks of vacation every year, no expectations of working more than 9-5 (at the average employer), and after 1 year working at a job you’re eligible for unemployment insurance which means you get 60% of your net salary for 1 year if you’re unemployed.

With regards to attaining riches:

You can live comfortably with €2000/month net as a single (and easily with €3-4k with two incomes and two small kids in a smaller city), so for most people, it’s possible to save 500+€/month (most don’t because of lifestyle inflation, but that’s a different matter). With side hustles (small freelance work) you can easily save €500-1000/month which means that after 5-7 years you are able to save €80,000. Continuously investing in stocks, pension plans and ETFs (what most Germans also don’t do) means that you can accumulate half a million euros by the age of 45-50.

And this is the average developer, no 10x rockstar. Having a net worth of €700k to one million euros when you’re 67 years old with a very good work-life-balance is nothing to be ashamed of. With more ambition, you can freelance for €75/h which translates to a six-figure income. With that, it’s possible to build a net worth of 2-3 million over 20-30 years.

For people who want to be a millionaire in 10-15 years, this is not very attractive. But when you consider the work-life-balance and the labor rights, it's easy to see how people would choose that. For high-achievers, I would also recommend working in the US or Switzerland. But for average developers, it's not that bad of a deal.


I honestly think this is a completely wrong-headed way of looking at things. You are paid what you're paid not because the company is determining what is 'fair' given all of your circumstances, but rather the minimum they feel they can get away with.

Nearly all employees would accept more pay if they were offered it, nearly all employers would pay less if they could - so like any market it is always an equilibrium between the two. And frankly in some job markets the salary is negotiated better than others.

There is a sort of learned helplessness to 'I don't deserve more for this job' etc. in the eternal words of Unforgiven - deserve's got nothing to do with it.


> rather the minimum they feel they can get away with.

I completely agree.

I certainly would accept more pay. But I wouldn't switch jobs just to get it. There are several reasons, most importantly that interesting jobs in my niche are scarce. So my employer has a resource that is perhaps scarcer than myself!. Second (and this is the part where it becomes self-fulfilling), because there are no super high salaries, I'm close to a kind of ceiling. I'm not sure what that ceiling is and you could always be lucky and find some extremely well paying job, but let's say that for a job I'd be willing to do, the ceiling is within 50% more than I'm currently making.

If marginal taxes are 50% (at least), then that's a net 25% pay rise. It's basically $1500 more a month net, and it would require me to make probably several job switches. It's certainly not insignificant, but it's just not significant enough. Had there been jobs across the street paying 3x what I do, then certainly I'd start chasing more money. But I value my 6-8w holidays, I can already afford to travel etc. I'm comfortable.


Great response - I very much agree that from the employee's point of view you are always trading off a number of factors and they are by far not all about money.

My main contention really was with the assertion that you don't see why you should get rich - as if it were about what is deserved whereas of course it is a market where the correct price is the one people are willing to pay.

I myself trade off a number of factors in my career which don't equate necessarily to salary.


I'm not saying it would be wrong to be rich or that devs should be rich if they work for companies that make a lot of money per employee. But that's a pretty "valley centric" view that creating software means creating infinitely scalable money machine and each developer always creates a value much larger than what they are paid.

For most us devs, especially in europe where a larger fraction of us developers work, I imagine, in traditional industry rather than "in software", there just isn't a situation where we create this massive value. We create more than we earn, sure, but it's not exacly Netflix money. The company I work for, like almost all companies, have a huge number of employees and a profit margin that has looked pretty similar for a lifetime.

What's unfair is perhaps that there are instances of such companies, where the developers really could and should be rich because they write software that make billions. If such devs were paid better, then I could also be paid better, because I'm paid in competition with them. More likely though they'd be paid more and the jobs that aren't in that category would be done elsewhere. So in a sense, I'm also a tiny bit happy that the pay structures aren't as widely distributed as they are in some places.


> If marginal taxes are 50% (..) that's a net 25% pay rise

Only if you’re not paying any taxes currently :-)


Yeah that's probably the wrong way to express it (hadn't had coffee). If I get $N pay rise, it's only a $0.5N net pay rise, which makes it much less attractive.

> You are paid what you're paid not because the company is determining what is 'fair' given all of your circumstances, but rather the minimum they feel they can get away with.

And the maximum you feel you can get away with. It’s a market, after all.


It all boils down to what you want in your life.

I've seen people (including myself) trying to change the lifestyle, thus money is a vehicle to do so and to build something with. Not everybody has got rich parents or sugar daddies, some people start from nearly zero and try to climb the social ladder.

A higher salary can unlock multiple benefits, in terms of long-term economical security (e. g. in case of market crash and companies go bankrupt / berserk mode, laying people off) and maybe buy yourself a house/apartment.

Plus, saving for children's future is one of the best gift a parent can do.

Coming to an end: having a salary which is similar to what in SF are offered would be really good


Right, if you don't value your work, why would anybody else?

I see this opinion a lot and I do take it personally.

I come from a workers family and getting into IT was hard. I still pay off a (small 10k) debt from university. It took me years to get into the industry, working for very little pay. All the while I didn't do anything for my pension. Now I have a good income, but income alone is not enough to buy a house near the city. Having a migration background in Germany might not have helped.

Do you really think engineers, bankers, administration, lawyers, teachers and real estate agents have it worse?

In an industry that's created to destroy jobs, why would I work for less?


> I just can’t find an argument why I should be able to get very rich doing my job

Another way to think about this is that your job generates certain value in the economy. If labor's salary doesn't capture that, then that value is going somewhere - either to your governments via taxes or to capital owners. I understand that some Europeans will not have problems with the former, but are you comfortable letting capital class capture all the remaining value after taxes? If not, that is a good enough argument because allowing that to happen is what is driving wealth inequality to high levels.


> I got my higher education for free. I expect to save nothing for my children or their education. I expect to have to put aside very little for retirement.

Exactly this. European social democracy allows people to have relatively calm life without burden to start their careers with huge school debt. Or worrying about health insurances. Once you will have family (OP), you will see that not saving for their health insurances and school also helps a lot and I wouldn't change this for USA system. On the other side, it is very simple for software engineer to get a job anywhere in the world, but do take into account pros and cons.

Anyway, to the topic, the way of raising salaries in any sector has always been the same. Form a syndicate, get enough people to join and go on strike (and if you live in EU you are very well covered and protected regarding syndicate activities).


> I have worked 20 years in the same job and so have my colleagues. This is a cultural difference I feel.

I think this is part of your company's culture, not your society's culture. There are also lots of Dunder-Mifflin type companies in America where nobody has any ambition and everyone just coasts until retirement.


I think it's a bit weird to associate "ambition" with the propensity to switch jobs. I'm in a "traditional" industry so product and project cycles last decades, not just moths or years. It takes a couple of years for a new hire to be really productive. I can't compare it to some other places I have worked where half the staff would change every year and a large project would ship in 6 months.

> The thing is, I just can’t find an argument why I should be able to get very rich doing my job.

Sure, but if you are a really good engineer in software, someone is going to get "very rich" from your work. Why not (partly) you?


> Why not (partly) you?

The short answer is that he is replaceable, while the owners are not.


Well then they are perhaps already getting a fair wage.

Well, you could work for yourself. Often times, it's more stressful, more risky with lower pay until you "make it". So since you can live stress free and afford basically anything you want on a salary as a software developer in Europe, not sure why you would want anything more than that.

Of course, plenty of people work for themselves, that's the beauty of the free marketplace.

But to assume increasing salaries _is the way to go_ feels like such a capitalist/american viewpoint that it's hard to understand why it's trying to be applicable to Europe too.


I can understand this for oneself. But to be this complacent/indifferent to your kids' future is just kind of amusing to me.

I haven't got billionaire status ambitions, but I also don't want my elder years to be effectively dictated by the vicissitudes of the political environment.


I'm not OP but I'm paying my taxes specifically so that my children's future will be secured. My taxes pay into their and their peers education, it pays into their and their peers healthcare costs, it pays into my own retirement so that they will not have to worry about feeding me when I grow old. It pays into a social security net so that if there is an economic crash they will still have food on the table and a warm home.

This means the number in my wallet and bank account may look smaller, but I still live a rich life with money to spend however I want.

It's the exact opposite of complacency.


As a parent, is there really any difference between "saving for your own future" or "saving for your kids"? I do some saving for my future (e.g. retirement or rainy day) but I don't have specific savings for my kids, or any particular goals for such saving (such as enough for higher education). Lots of people here save money for their kids so they can get their first apartment which is suddenly really expensive. But I'd rather improve the house we live in now, or take them on trips, and if they need $20k down in 10 years to move out, I can probably solve that. I started with 0 savings from my parents, they started with zero from theirs, and so on. I don't know anyone who received a significant amount of money from their parents that wasn't an inheritance.

You can't count on politics being constant, but "there is a large welfare state here also in 15 years" I consider about as likely as the sun rising tomorrow.


> I expect to save nothing for my children or their education. I expect to have to put aside very little for retirement.

In the UK, at least, I'm not sure this is still true. On retirement, I planning on getting nothing from the government once I get there, and it's looking increasingly likely that I won't be allowed to retire until slightly later in life.

That being said, I have paid off my student loans in less than 10 years of work, so I can't complain about the cost and quality of education.


> On retirement, I planning on getting nothing from the government once I get there

In the UK ever less is expected of the government. I keep reading "I don't expect a state pension" on the Internet. Of course, some people look at the finances and economic outlook and arrive at that conclusion on their own, but I feel a great many others are being primed for this situation. We just expect to be screwed by our government now and it seems like defeat. :(


I'm not sure what the right balance is, but I feel there is a slight aspect of _we can't have it all_. We're not prepared to have a debate in the UK about what the NHS should and shouldn't do, yet at the same time people are living longer and want to pay less tax. Something has to give.

Tbh, I'm happy to save for my retirement, but I'm slightly biased towards a slightly less welfare society (though not as far as removing essential support and health care). I can choose to save more now for an earlier retirement, for example. I think the auto enrollment has gone a long way there.


I really appreciate your honesty, awareness and most of all dignity. Thank you.

What happens when the government doesn't have enough money to pay for retirement anymore? The system works well when you have growing workforce and productivity. It doesn't work with growing number of retirees and shrinking active workforce.

I trust my government and pension system around as much as I trust my private savings being worth anything. I could keep my savings abroad I suppose.

A disaster would mean I get perhaps 60 or 70 or 80% if my projected pension - but I’d live ok on that too. I’m not saving nothing personally, it’s just where I live you usually have to invest in a house if you want one. So the situation is you trust either the pension system or the housing market to hold up. If both were to fail I’d have problems.


What happens if society collapses? If a giant asteroid hits earth? If we find out aliens and they are ostile?

Well, we know what happens, already. You build a bunker, stock up on guns and food, build a bunker in a remote part of your country :-p

I always find this kind of prepping unrealistic, the best thing you can do is a solid social group. If society collapses, even the best prepared loner will be dinner for the nearest somewhat organized group of people :-)


Isn't that going to be a problem whether the pension is public or private?

>I have worked 20 years in the same job

Very different. I cannot imagine staying anymore more than two years - aren't you bored?


Why would I be bored?

Of course this means that you're actually not doing the exact same thing at the same company all the time. A good company allows for that. Either because you can easily switch projects, switch teams, move up, move sideways etc. Depends on things like company size, structure, culture etc. And yourself obviously.


I think what parent means is: Don’t you have to actually maintain the crap you built using your resume-driven technology decisions? /s

I found that the times in my career where I learned the most was when I hung around to face the consequences of my actions. That normally means staying longer than two years.

How do you learn if you don't have to maintain what you wrote after two years...? Also, creating connections and really understanding a company/business is really fun IMO.

He probably doesn't want that kind of deep learning (not in the AI sense), he wants to have fun.

Having fun is one of the most powerful forces in human history. Not always for good.


I average about 8 years in my jobs. I think I'd find it much more boring to be constantly looking for a new role. Job hunting is the worst.

Switching jobs I’d be doing the same thing more than if staying. That’s the thing. I have even switched occasionally but switched back out of boredom. I tried. I’m in a position where the job is interesting (I find most work isn’t - I’d never want to work in a place making some Crud app or web service).

Exactly. A company I know well had to lay off people in France and in the US. People in France keep almost their full wages for a whole year, and the medical insurance for free for a year. I hope the ones in the US find a job quicky and that their higher salary can cover any (medical) cost in the meantime. I would not be so sure.

Lower wages for this amount of security seems a great deal to me.


It sounds like one of these american stereotypes that quite often turns out to be true.

That everyone should aim to be super stinking rich, or everyone is living in the gutter, but there's no inbetween

Unis are telling people that they can be the next zuckerberg or bezos, instead of telling them that they can earn well enough to have a very comfortable lifestyle for the rest of their lives


What you're decribing reminds me of something Bob Metcalfe wrote years ago (but I'm afraid I don't care enough to find the original), that is: people obsessing over getting their taxes lowered are dummies, because companies will pay positions to a particular level in the social context of their employees. If a job - such a software developer - is supposed by employees to be upper middle class, that's what a company will pay in California, or India, or Germany, or whereever. Tax rates, housing costs, what have you, will be factored into that. Hence, within the US, we immediately see companies expecting to pay remote, outside-SF employees less.

In a similar vein, you're describing a lower headline salary buying a comparable standard of living because you aren't paying a mortage-equivalent sum for healthcare and education.


I'm kind of surprised by the idea of saving nothing for your children. Is it a symptom of the dog eat dog American system of capitalism that it seems kinda wild to me? I guess if you can be certain that their fundamental needs will be met, it isn't as important. But in the US your life can be pretty crap, even if not abject developing world style poverty.

It's because most people in Europe don't really make enough to do so.

Also if you somehow manage to increase your income, over half of it disappears in taxes and social security contributions.


Denmark and the Netherlands have the highest income tax bracket at 52/53%. Germany is 43%. However they are stacked taxes.

In Germany (where I reside), the first €9744 (2021) is untaxed, then 14% until a certain amount (can't find it atm) and max 43%. However, if you do your tax returns your effective tax rate will drop significantly. I'd wager that most pay around 25% in total income taxes, excluding things like the health insurance and other taxes.

However, we indeed do not worry about saving up money to put our kids through school.

Earning 65k which what most companies in the tech scene now offer to lure them in as a SWE in Germany is a great salary realistically, considering for example an architect with a masters degree will earn around 55k and no real improvement in sight.

Also don't forget to factor in that the concept of being fired for PROPER reason is nearly impossible in most European countries. Even if an employer hits hard times they cannot just lay off an entire department to quickly green out the numbers in the books, there needs to be proper grounds. I currently need to give my employer 3 months notice before I can even leave, same goes for them to me.


I was laid off recently due to the pandemic. Because I work in tech, it took me two weeks to find a new job and it ended up being a promotion and a 20% raise. I would make 40% less in Europe, even in a big city, and unless I lived in a small European town my cost of living would be quite a lot higher. Even factoring healthcare (contrary to what Europeans perceive, the healthcare system works very well for the upper middle class) and student loan debt, I’m far better off financially than I would be in Europe.

Of course, this isn’t true for Americans in general. I want us to adopt European social policies; however, for SWEs, the financials are just better in the US.


> contrary to what Europeans perceive, the healthcare system works very well for the upper middle class)

... until you get a really expensive chronic disease. And then it fails miserably.

I know upper middle class parents whose kids got a disease which need ~$5000/month meds for a few years (and nontrivial infusion center costs on top).

It worked ok for some, many had been informed that the insurance company decided not to pay - requiring lawsuits (some settled, some ongoing).

No European, Canadian or Israeli parent that I know of kid with the same disease ever had to fight or pay out of pocket - it was all covered by the single payer with no hassles.


Not defending the US healthcare system, but I’ve never heard of an insurance plan without an out of pocket maximum. For example, my plan has a 2k maximum for individuals and 4K for married couples. Combined with a health savings account (allowed to be funded pre-tax from both the employer and employee), I’ve generally put $1-2k a year in that during my 20s when I rarely needed medical expenses. I still haven’t had a year where I’ve spent more than I’ve saved to the point I could cover multiple years of out of pocket maximums just from that account.

And since it’s a “savings account” I can invest the tax-free savings into the stock market with index funds. I’ve actually had a decent amount of growth in that account just from stock market gains.


2k max out of pocket expense to me sounds absolutely ludicrous.

In Germany you can have private health insurance (if you make more then 63k a year you can opt-out of public health insurance) and there the out of pocket is usually around €350. In the Netherlands the out of pocket is also something like €300, which most already consider too high.

The option to get it to zero is of course possible but usually doesn't offset the savings.

However the notion of having to need savings to be sick is... to me extremely foreign and strange.


Just out of curiosity. What would happen if, for any reason, you lose the capacity to work for a couple of years? Let's say that you have a bad accident that affects your hands, or you get a depression.

Are you asking me or ABeeSea?

I agree that American healthcare needs reform (and I want single prayer in particular), but I’ve never heard of an insurance company refusing to cover a necessary drug, at least not any health insurance plan that an upper middle class family might have.

> the healthcare system works very well for the upper middle class

See, that's the point. In Europe it works well for everyone, no matter how much you earn. It's a mentality-thing in the end (where the US position is hard to grasp for Europeans).


I agree. I was responding to the narrower context of the post: affordability for SWEs.

Just have to point out that the pandemic was not a tech crisis. If you want a point of reference, think of the dotcom bust. That was a tech crisis.

White collar workers, especially STEM ones have largely coasted through this pandemic.


I’m not following your point; we might even agree. My point was: despite less legal protection, American SWEs still enjoy a lot of security even during a pandemic (which isn’t a tech crisis but still dramatically impacted many tech companies). Because I make like 80% more than what I would make in Europe, I also am able to save and invest (6 months expenses saved up in a savings account). I also give a good portion to charities and political causes (so hopefully one day America can work well for people who aren’t SWEs).

My point was that we haven't had a job crisis in the software field, for a while. That would be a true test. I have no idea when it will happen but it's reasonable to assume that nothing keeps going up forever.

Fair enough, but it only tells you how each system performs under anomalously bad events (I don't think this is a "true test"). And to my earlier point, when you're making 80% more than you would in Europe, you can save a lot of money to float you through hard times. Notably, I still don't think you'd be particularly well-off in Europe--European worker protection rights don't help if your company goes under, and you won't have a cushy savings account. I'm guessing unemployment is a bit better than in the US, and obviously healthcare will be better, but on balance I don't think your average SWE would be any better off. Of course, this doesn't extrapolate beyond the upper-middle-class and above; poorer Americans are almost certainly worse-off than their European counterparts (and I want to see that remedied).

Except for financially dubious start-ups, getting laid off at a tech company comes with a fairly nice severance package. Dropbox, for example, is giving 3 months salary, Q1 equity, and 100% of 2020 bonuses.

Interestingly enough, I wrote above about this as well but with the opposite sentiment. The Spitzensteuersatz of 42% is applicable for income from 57k€ onwards. That's hardly rich and hardly deserving of so much tax. Meanwhile I could earn millions through investments and dividends and would only pay 25% capital gains tax. Also, 25% sounds ridiculously low when you add up the income tax, social contributions, sales tax, capital gains tax etc. Not to forget yes the 7%/14% you pay for health insurance. Or you have cherry-picked a family of 4 with one person earning 45k€ a year and drawing the most Kindergeld possible.

I am not sure what that alludes to either. Germans and Italians save huge amounts of their income (typically, higher than the US).

You still need to save for a pension in almost every European economy, one isn't given to you (state pensions in Europe, even in the UK, are contribution-based). Welfare systems in Europe are not redistributive like in the US, they are typically contributory (you get out what you put in). So there is no sense in which your fundamental needs will be met irregardless of anything else.

I think the issue with the US is that you have a very redistributive political economy, and so many people believe that those elements are the same everywhere AND they could have all the free healthcare...it doesn't really work that way (marginal tax rates on middle-class incomes are above 50% in some European economies, and top rates are usually lower than in the US...try doing that in the US).


> You still need to save for a pension in almost every European economy

Uh, no? Pensions are contribution based but that contribution comes from taxes on your salary. Far from me to say that the system is perfect but you basically just need to work.

Welfare is absolutely not contributory in Europe, it wouldn't make sense as those who need public welfare the most are those that can contribute less. Some countries like Austria have a healthcare system based on insurance, but employers are required to pay for it, students have it for free and unemployed as well.


> Uh, no? Pensions are contribution based but that contribution comes from taxes on your salary... Welfare is absolutely not contributory in Europe

This is just incorrect.

In Ireland, there is a contributory state pension [0] of up to €500 a week, which you are entitled to if you spent enough years in the workforce making tax contributions. There's also a means-tested non-contributory pension [1] of €237 per week which you are entitled to if you don't have other savings or income, such as the contributory pension. In addition to these, private pensions exist: basically savings vehicles with certain restrictions and certain tax advantages.

There's a similar two-tier system for unemployment assistance and certain healthcare entitlements. I understand many other European countries have similar arrangements, despite your assertion.

[0] https://www.citizensinformation.ie/en/social_welfare/social_...

[1] https://www.citizensinformation.ie/en/social_welfare/social_...


> In Ireland, there is a contributory state pension [0] of up to €500 a week, which you are entitled to if you spent enough years in the workforce making tax contributions.

That is exactly what I said or are we not understanding each other? Your pension comes from the taxes on your salary.

The existence of private pensions doesn't deny my point. I thought it would be irrelevant to mention them as they exist everywhere.


A lot of people confuse welfare with unemployment, I assume you mean that welfare isn't contribution based which is correct.

In some countries, e.g. NL/DE, unemployment however is contribution based and you always pay for it (it's tacked on next to your normal taxed), which when needed is limited to 2 years based on 60% of your last net income. The idea is that you should still be able to afford your current way of living without too many compromises when you got laid off and haven't found a new job yet.

In Germany for example welfare isn't great, it's around €400/mo though the state pays your rent directly.


That's correct, I definitely mixed up things.

I expect to leave them something (provided e.g the housing market doesn’t totally collapse.)

But I don’t need to save for their education or anything like that. I don’t save explicitly in their name.


I get it, and I would completely agree if the salary gap was the same for managers, HR, etc.

So the question is: why are managers, HR, etc. paid so much more than SWE in Europe? They bring less value to the company.


Pretty much every professionals' pay is proportionately lower.

Doctors are paid around a 1/3 of what doctors get in the US

Nurses around half

Lawyers vary, but quick googling suggests it's around half to third

Finance, insurance and real estate pays waaaay less

Store managers at Walmart get about twice as much store managers at Lidl Europe

The skew in upper management pay is even higher

and on and on...


Well, the US GNI is also higher than that of every European country minus the microstates, Norway and Switzerland.

Partly because even though productivity is comparable, Americans just work more (longer hours, fewer and shorter holidays), partly because the system is just more efficient: single market, just 1 language, great centralized soft power that opens many doors.


They are not. Pay is lower in Europe than in the US across all "well paid" jobs.

Risk is only one reason to potentially be worth a high amount of money.

Others are: having connections that result in value for a company, and having a scarce skill so you can do something valuable for a company. SWE falls under the latter, for the companies that can leverage them highly enough.


That is a completely wrong perspective, and might be symptomatic. You are not paid according to some argument that you personally deserve to be rich, you should be paid according to the value you produce in your context. And the relevant context is more and more global.

I didn’t say deserve - but since switching jobs is a chore, I’d want to be compensated for it. I don’t think it’s a job that should necessarily make me very rich though. Taking risk should, but just creating value that someone else can produce? There is talent scarcity but not that much scarcity. Other people would do my job at my pay (which I guess ties into the topic!)

With the highest salaries perhaps 20-40% higher than mine and marginal tax 50% making that 10-20%, the prospect is basically, would I switch jobs a few times for that little, when I like my situation?

If the ceiling was higher, I’d switch. It’s a self fulfilling prophecy :)


I think there is a comparable amount of value created between you and someone in USA, its just that in Europe managers capture more % of the profit. Its not an issue of scarcity (that makes sens only for the whole playing ground) but of distribution after the scarcity is already priced in.

"Value created by you" is not necessarily dependent on your skills alone. You might be the best Java programmer in the world, but if you get hired to write some boring CRM system for internal use in a bank, then the value you created is limited by how much money said bank wants to burn on internal development efforts.

On the other hand, if you get hired by FAANG and work on the "next big thing", like, say, new operating system for smartphones, then the amount of money that can be made from it is virtually unlimited.

The difference between the US and Europe is mostly that: cool, product-focused jobs are all in America, Europe only has the boring, low-risk, low-reward ones. Europe needs to innovate more, that's it.


> You might be the best Java programmer in the world

This is also true in the opposite sense. A mediocre programmer at a bank or a high-profit company could still create a lot of value because of the surroundings or simply the industry. And they're probably compensated for that, at least in part.

Even more interesting – the cafeteria workers, cleaning staff, etc at those companies also produce more value than their colleagues in less fortunate companies/industries. But they're probably not compensated for it, because markets.


I kind of agree, but it isn't just that europe doesn't innovate, there is a lack of VC infrastructure and it's kind of antithetical to the managerial culture.

In some industries, developers create almost infinite value-per-person. A company can make a product with 100 people and sell it to amillion customers.

In other industries, engineers (software or not) just make products and products are built and sold with "normal" margins and limited growth opportuntites. A healthy company can make a 10% profit every year for a century. Scaling up means having more people because you need more sales, more manufacturing and so on.

In some more pure tech industries like SaaS, Games etc, the profit margins can be much higher. I'd be upset too if I was at a company that made $1M profit per employee and I didn't have a cut. That doesn't apply to most software jobs (at least not here) though.


Or perhaps everything is just cheaper in Europe. If customers get more for less, B2B must also be cheaper, and software is cheaper.

There doesn't have to be someone capturing profit if the whole industry is priced lower.


He believes he is paid what he "deserves".

He /should/ be paid commensurate with the value he produces.

In reality, he is paid the market rate.


I agree, what for?

I would rather reduce the wages of those richer than SWEs by taxing them more and using that to reduce housing prices, increase wages of health workers and educational staff, and pay for more social programs to get the poor out of their misery.

Optimally, it's my firm belief that we should be working towards UBI to reduce bullshit jobs everywhere. I want people to be able to work on things that matter and things they care about, while living in a place they care about and for without having to constantly sweat about money.

If European SWEs wanted to raise their wages, we would have to unionize and demand a greater share of revenue. Also, we would have to vote for politicians that want to force large companies to pay their fair share in taxes. Google, Amazon, apple and others have a leg up because they can make billions without paying our countries their due taxes.


I don't get why I would get a smaller cut of the profit just because I save less for my children than Americans do. I should be paid what is reasonable for the work I do, not how much money I spent on education.

> I don't get why I would get a smaller cut of the profit just because I save less for my children than Americans do

In a sense you don't, depending on how you count. My gross salary is after the pension is deduced. The gross includes my kids university costs, but they are deduced as taxes so don't show up on the net. An american deduces the kids university costs from his net salary (and there could be more, e.g. pensions).

Comparing pay as a simple number "gross pay" is extremely difficult. Comparing net pay purchasing power or similar after necessary expenses including savings (and kids university) is probably more accurate.


As another comment said: to pursue passions that do not pay well.

The most scarce resource is time. Switching job would presumably require more work from me at least temporarily. I'd perhaps need to commute initially at least, for example.

I'd like to know this: if I got 2x the pay in the US, could I instead ask to work 1/2 and get the current pay level I have?

Most likely no, right? So in what way is that higher pay actually helping me pursue passions? I'd be working at least as much as I do now, and most likely more, for that money.

When exactly are those passions supposed to be pursued? When retiring? I'm pursuing that now. I have had 6-8weeks off in summer the last 10 years. I like to travel, etc.


Time isn't the most scarce resource for everyone.

If your passions require more money than you have, it doesn't matter that you have 6-8 weeks off. You still can't do the things you want to do. You can relax, travel (limited due to funds though), which are both nice for a while but eventually become frustrating.

My passions are expensive - too expensive unfortunately. For example I could really do with a house to build things in, but I can't afford to buy a house, so I can't build the sorts of things I'd like to build in one. And you should see the small factory I wish I could afford.

Even small stuff like attending conferences is too expensive if you can't afford the travel and tickets.

As I've gotten older I've come to see there are many situations where, if I'd had more money, things I tried to work on would have turned out very differently. That's the #1 reason I now pay more attention to income than I did for a long time, when I focused on voluntary work for what I thought was worth investing time in, with "SWE side gigs" to pay the bills.

> When exactly are those passions supposed to be pursued? When retiring? I'm pursuing that now. I have had 6-8weeks off in summer the last 10 years. I like to travel, etc.

Depending on what they are, it may have to be evenings, weekends, or when retiring.

That'a definitely a compromise. But if you don't have the money and your passion projects need money, it will probably be never.


Yes, of course the essential needs (houses, travel, expensive mountainbikes) are satisfied. There are no "if only I had X" needs, and many "If only I had more hours to use my X". I reached that point when there were too few hours and "enough" to fill those hours, long ago.

I realize things can change though. If I were to suddenly be divorced for example, I'd probably value having a much higher paying job suddenly (at the expense of less free time, more stress, less interesting work etc), to be able afford life.


> When exactly are those passions supposed to be pursued? When retiring? I'm pursuing that now. I have had 6-8weeks off in summer the last 10 years. I like to travel, etc.

This!

I'm not familiar with all European countries, and not extremely so with the US, but I think this is an important difference: Free time. 5-6 weeks paid vacation is common, and employers expect it to be used. It's often easy to get unpaid leave for whatever reason, such as studying or starting a business. Parental leave is paid and the expectation is that it will be used. Employers demanding overtime or "crunching" or whatever is generally frowned upon.

Etc. etc. My strong impression is that those "low-paid" European jobs are often a lot more balanced, with more room for life than their American counterparts.

(I do live in Scandinavia, maybe we're on the extreme end of this, but still )


Work is exchange of the only finite resource you have (your life) for money. You sure would want the best deal you can get.

> I expect to have to put aside very little for retirement

Which country? You should definitely be saving for retirement


Sweden. I am saving but probably 60% of my "retirement savings" are mandatory payments (payroll taxes effectively) and if I save nothing at all, I'll still have a low-but-liveable pension. The last 40% of my pension or so is what I'm saving for, so basically it's the "extra". It's not nearly as much as you'd have to save in a country where you have to fund your whole retirement.

Also I don't think I'll want to retire very soon which helps the calculation. Saving durig a 50 year career to live 10-15 years is very different from saving for a 40 year career to be retired 20-25 years. I'm hoping to work to at least 70 or longer and that makes a huge difference too. I some times hear US devs talking about wanting to retire at 55 or 60 - which I'd want too if I didn't have summer off every year!


I don't think you've fully thought through your position. You making less isn't some altruistic thing. You making less directly contributes to your (already likely wealthy) boss making more. It's not like you making less means the poor live better lives, it's essentially donating money to your employer.

There's cultural differences here depending on where the employer is based. I believe the employee-CEO pay gap is substantially less for many European companies (excluding UK).

So do the shareholders make a lot more then? Or are companies just less productive?

It's probably true that in software, there are fewer companies that make silly revenue per employee. I work in "traditional" industry, meaning the revenue we make is for saying widgets we make in factories. Having 10% profit margins or 5% yearly growth is fantastic in our industry. In the US my feeling is that a larger fraction of developers work in the type of tech that has higher room for growth. And more importantly, the entire industry has to compete pay wise with these tech companies that can pay based on exponential growth and almost unlimmited properties (like FAANG). Since I don't have people across the street making twice my pay because they work at a FAANG, there is less of that.

The markets might be more competitive, which means less profits.

Right, they only own one Porsche here and a few houses.

I was actually surprised by how shitty of a car our CEO had (it was an Opel). Well, not sure if it was his, but it was the one I saw him in during a company outing.

It’s not altruism, it’s just that I’d need to actively chase more pay to get it. And I’m not in a position where I want to (don’t want to switch jobs etc). Marginal taxes are also quite high (over 50%) so there are diminishing returns.

For reference I make around $70k as a senior type eng. Not huge but the “ceiling” (for cash comp) if I switched jobs 10 times and ended up at a very well paying job in the end would be 20-40% more - which is 10-20% net!


And by switching to a better paying job you end up working somewhere that produces more value per engineer, which in turns makes the world wealthier.. which overall is good :)

That said, I don't think it's just a matter of culture.

Also just because capitalism likely makes the world better on average, doesn't mean we all have to go ferengi and dedicate our lives to pursuit of maximum profit :D (Perhaps there is a balance)


Huh? If he earns more at Pornhub he makes the world better? Even FAANG is debatable.

Defining “better” isn’t easy, but “more valuable” is a falsifiable measure. I hate Facebook and Google but they do provide a lot of value to their customers (advertisers)

Facebook's effect on society is still being studied, the jury is still out. It may very well be more damaging than doing good. Just because people are paying for something doesn't mean its doing anything good. Tobacco is a good example.

Like it or not, there is also a huge amount of legitimate interactions on facebook.

My dad didn't use internet forums before.. now he's on facebook groups about wood working -- I doubt the projects and reviews people in those groups share are fake news :)

Fact is: without facebook my dad probably wouldn't participate in any online community.


Right, thats why uber recently discovered that massive fraud in ad spending did not affect their sales

Hehehe, on average maybe? That said you probably shouldn't live your life by statistics.

Also note: I did advice against going all Ferengi :)


What you are describing sounds horrible. I’m living in Europe (Barcelona).

Upvote for your nickname!

You are taking a risk. The risk is that you assume your government will be able to provide you with a comfortable life even when you can no longer work. And when the time comes for your children to get higher education and retire themselves eventually you hope the government will also be there to step in.

It works, until it doesn't. In America you can compensate yourself for this risk by simply getting a job where you are paid a higher salary than the average. Then you don't really care what happens with the social safety net, you've already hedged against it by saving and investing for yourself, and possibly becoming very rich.

Personally I'd be stressed if I were in your position. Government welfare isn't some liquid asset. If you decide you want to go live in some other country with a higher standard of living, such as the United States, is your government going to give you $100k or more to go start a life there at the same standard of living you're used to? I doubt it. You'll have to start from scratch, little to no savings, no real credit history, and paying much more for things that were a lot cheaper back in your home country. And if you were to retire in the US, I have a dim view of your future if you have no savings for retirement. If you are already close to retirement and haven't saved anything, you simply will not be able to retire.

Basically you're locked in to your home country, and have no realistic options for leaving unless you become richer. If the country goes to shit, so do you. This is not the case somewhere like America, where how well off you are is decoupled from how the country is doing as a whole. Government risk is eliminated, your cash flow and net worth is all that matters. That's much easier to understand and helps you sleep at night.

Be careful.


I'm a European living in USA working for a FAANG. Frankly, my assessment is exactly the opposite from yours.

United States is the country that's most likely to go to shit. All of us wealthy professionals here are sitting on a powder keg of inequality and delusional politics, and nobody will be decoupled from it when it blows up.

I plan to stay for a few more years, then return to my safe North European home country with a solid stash of savings. My kids can go to good schools where teaching is in their native language. When they get older, they can go to free college if they're willing to put in the effort. When I retire, I won't need to worry about exhausting my savings because I've got a home fully paid and a sufficient baseline is guaranteed from the national pension system. There doesn't seem to by anything that would make me want to stay in America — perhaps the worst place on Earth to retire.


How is your assessment opposite from OPs? Just like the OP argued, if the entirety of US goes down under, you still have option of moving most of your earnings to your safe North European homeland. Perfect example of income being "decoupled" from the government.

This is why the actual billionaires - including and particularly the ones who setup ycombinator - such as sama and Peter Theil have bunkers outside the US that they plan to flee to (and in some cases did at the start of COVID) to avoid the mess that they've created in the US.

The people cosplaying here by repeating the values that Peter et al want them to quake will be the ones left behind.


Inequality doesn’t really matter as much as people think.

What inequality does is ensure that there will always be two markets of consumers: one that needs goods at low prices and one that can afford higher prices for luxury goods.

As long as the lower price market exists, hoarding sufficient wealth guarantees you’ll be able to at least afford the minimum standard of living, allowing you to safely retire. If everyone was wealthy everything would be expensive and then no one would feel wealthy enough to retire.


...what about the people who can't "hoard sufficient wealth" because it's all been sucked from the market?

...what if "health care" is viewed as a luxury good as it is in the statse?


lol. It doesn't matter much if you're not the one in the lower bracket.

Yes, thank you for telling us that capitalism needs poverty to exist.

Most of Western/Westernized world is going to shit. Western Europe and Japan in particular have terrible demographics, which means that, unless some miracle happens (like a massive influx of immigrants who integrate well and become productive members of society), that less and less working people will have to maintain more and more non-working population. Obviously, it will lead to radical decrease of standard of living and gutting of the welfare programs across the board. Just watch it happen across the next 30-40 years.

There was even a leaked secret recording of heads of banks, where they basically agree that the party is coming to an end for Western Europe (due to demographics) and admire Merkel and Holland for hinting that to the population, as opposed to ignoring the problem altogether.


Do you have link to that recording?

It's in Polish - they were heads of Polish banks and financial institutions. The one who said that was Morawiecki, a CEO of BZ WBK (which is a subsidiary Santander) at the time , who has since then became Prime Minister of Poland... There was a period in Polish politics around 5 years ago were important people were being secretly recorded by waiters in expensive restaurants, that's how this conversation got recorded and leaked.

This "every man for himself / kicking down the ladder behind me" attitude is exactly the reason to leave America. If you slip through the cracks by no fault of your own (e.g. covid), you have no safety net to keep your life and finances from spinning out of control.

> In America you can compensate yourself for this risk by simply getting a job where you are paid a higher salary than the average.

Oh wow! If I want a more secure life, I'll just get a higher paying job. I didn't think of that before!


> This "every man for himself / kicking down the ladder behind me" attitude is exactly the reason to leave America.

The "ladder kicking" part misrepresents their point. I see nothing they said which would preclude another person from following their same path.

As for getting a higher paying job, the problem isn't whether you thought about this clever plan, but whether you are able to actually implement it in you country.


In America you can compensate yourself for this risk by simply getting a job where you are paid a higher salary than the average.

If everyone does that then it just drives the average salary up. In other words, the system can't survive unless there's a strata of people at the bottom who are below average and, by your definition, relying on a government that possibly won't help them.

In Europe as most people rely on the government everyone has an incentive to vote for parties that won't fail those people.


I've struggled with this a lot. Unfortunately, the question "what's the ideal way to run a society?" is a very different one from "where's the ideal place for me to go right now?".

I'm not from America, but moving there as a high-paid, still-young software developer was a reasonable choice for me. I might advise others in my position to do the same. I'd be less likely to tell people "you should run your country more like America".


What you don't realize is that you rely on your government just as much as we do on ours. If it fails, it can't protect your property rights anymore and your net worth is just a theoretical number.

A developed country's government failing to the point that it can no longer guarantee property rights is pretty unusual.

Running out of money to pay pensions is much more common, and it seems somewhat likely given the way demographics are headed.


A bunch of angry people storming the seat of the legislative branch sounds pretty unusual for a developed country as well.

It's incredible to the lengths Americans go when their system is challenged.

I bet you've never left your own country for more than a week to visit Mexico.... you're all theory and it's all nonsense.

You don’t need a lot of savings to move to the US. I could get a good job there tomorrow (I work for a US company already, there are often positions including relocation and US salaries offered). If I sold my house I could buy one in most parts of the US too. I’d still be eligible for my pension from here too.

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