This is the correct answer. To put it another way, US companies are more productive (in the economic sense) than EU companies, and that gap is even wider for tech companies (& those that rely heavily on employing software engineers). Putting aside the question of whether EU companies have higher overhead per employee (probably true on average), they also derive significantly less value from their employees. This is the same effect which explains why the few "big" tech companies in otherwise low-paying regions will pay above local market rates (e.g. Shopify, Spotify, etc).
Reading your comment gave me a thought... maybe a better way of looking at the difference in salaries is that living in the EU is better value for money than living in the US.
In pretty much all of the EU, even in expensive cities like Stockholm or Dublin, if you earn a salary of €100,000, you can live a pretty decent life. Heck even on €50,000, you can do well in a lot of places.
Good luck doing the same in any of the top 10 most expensive cities in the US.
> In pretty much all of the EU, even in expensive cities like Stockholm or Dublin, if you earn a salary of €100,000, you can live a pretty decent life.
Define "decent".
In the top tier cities in western EU countries, buying even a modest apartment that will house a small family will be a challenge on €100k (pre-tax!). It is certainly doable, but you will not be able to afford any other luxuries.
> In the top tier cities in western EU countries, buying even a modest apartment that will house a small family will be a challenge on €100k (pre-tax!). It is certainly doable, but you will not be able to afford any other luxuries.
I would consider Paris a top-tier city, and while none of my friends make more than 100k, half of us bought our house already (we're all late 20s, early 30s, with a few kids starting to pop-up).
If you make 80k€[1] pre-tax in Paris (that's a good salary for SWE here), you can borrow more than 300k€. For a couple, that means buying a 700k€ flat/house, you can even live in the middle of Paris for that price! And we're talking about one of the most expensive city in Europe, with a massive housing bubble since 2000 (where the price was 2.74 times lower, adjusted for the evolution of salaries[2]).
In Europe, you are affluent with less than 100k€.
[1]: I'm talking about «super brut», which is how much money you cost to your employer, not the «brut» which appears on your working contract (which would be around 57k€ in this example)
You can easily get into that range as a principal software engineer in Germany. E.g, finance and car industry will pay that, depending on the niche even in a startup if you negotiate properly.
100k will also not put you in the 1% of the earners if you consider the cities where the high paying jobs are.
You mean in Munich, right? Anywhere outside of Munich €100k is a really high salary for a software engineer. Not impossible to get, I know of a few companies that offer that kind of compensation or even higher and are located in Berlin (though all of them have their HQ in the US), but that's very high income compared to the rest of the market.
In any case, the point is that with €100k/year you can really have way more than a decent life. More like a very, very comfortable life.
Europe doesn't value property ownership like the UK/USA/AU does - it's perfectly normal to rent for your entire life, and owning your own home is not seen as a requirement for a good life or even a wealthy one.
Europe is not homogeneous. Renting your whole life in Berlin? Yeah, maybe. But most of the Belgians are buying houses. I also heard Italians say it's crucial for them to own a house/apartment.
> Europe doesn't value property ownership like the UK/USA/AU does
It's funny, because my father in law (French, but who spent quite some times living in the US) often says the opposite: “Americans don't value property ownership. That's because they have wooden houses that last for a few decades and get replaced, while in Europe we buy stone that last for centuries”.
In Hungary the reverse is true. Owning a home gives you benefits a rental will never can. Plus you are gaining capital compared to using your salary and considering it as an expense.
It's not required to own, sure, but it increases your comfort level significantly.
This list would suggest that there are many countries in Europe with a higher home ownership rate than the US, the UK or Australia. Surely that says something about valuing it.
There is a sense in which a non-trivial chunk of those productivity gains are eaten up by rent-seeking (in SF/NY, the high rents are literally rent-seeking in that they're the result of deliberate manipulation of local laws & regulations around housing & zoning for the benefit of existing homeowners). Even there, though, a single person can live quite nicely on 100k USD (or 120k USD, if going from 100k Euro), if they're ok with roommates. On 50-60k USD, yeah, that'd be trickier, though honestly it's manageable if you skip the top 5. You can have a very reasonable quality of life in, say, Los Angeles (as a healthy young person without dependents, yes) with that income.
You were comparing apples and oranges in living standards. The moment you inserted roommates, it became apples and bananas. By the time you will reach public transport, safety etc - it will be apples and cookies.
The person I was replying to didn't specify any particular baseline for living standards, so I reject the assertion that my example was inappropriate.
If you want to raise a family in SF proper, I agree that 100k/yr total income would be insufficient for what most people consider a reasonable QoL, even if one spouse stayed at home to take care of the children to avoid childcare costs.
Of course, in SF, 100k/yr is "entry-level engineer at an early stage startup" territory in terms of earnings, which is not the typical profile of someone trying to raise children. You'd have to be trying really hard to not make double that as a mid-level engineer in the Bay, though.
Keep in mind that even once you get past the flashy comp numbers at FAANG, there are a huge number of publicly-traded tech companies in the Bay which pay enough that you could afford a mortgage to buy a house in SF on a single engineer's earnings without breaking 35% of post-tax take home pay. (A bit of a stretch at 200k, easy at 250k.) Even startups are getting there: a friend of mine recently got a new job in the Bay (not in SF, but close) paying over 200k in cash comp (base + bonus) with less than 5 years of experience, plus some options (which are probably not worthless, but can't immediately be used to pay a mortgage). He's a good engineer but this isn't an unusual outcome; some of the engineers I know aren't as good, but they make more money because they took the interview grind seriously and went for companies with publicly-traded stock.
