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Ask HN: Why are SWE in the US more expensive than SWE in Europe?
16 points by pelcg 5 months ago | hide | past | favorite | 89 comments
Hello HN,

This is something that doesn't make sense to me, I was trying to hire a developer for a side project and received an astronomical quote for around $25K for what seems to be a simple and basic site, the EU developer (UK specifically) quoted me around $1 to $2K and was equally as senior engineer (I checked both of their work and github projects)

This on top of now most software engineers are using AI Copilot and ChatGPT in their work which means that most quotes and salaries look very overpriced.

Am I missing something here?




The US engineer you mentioned does t want to work with people for whom cost is a concern. Those clients are annoying to work with.

When I did contract work this was my strategy.


This is even more true when the customer is a corporate who counts every penny but wants to make milions...


I guess $25k quote was to test the ground how serious you are. I personally would not touch $1k project, considering how much of a hassle it is to maintain it later.


Quality of life is much easier and cheaper here in EU so, in general, our standard of life doesn't cost as much. I generally assume that a dev salary here is equivalent to a salary in the US that is about 2x. So we are cheaper cause half the salary here gives us a really nice life somewhat similar to what someone would have in the US at 2x.


What a myth.

You probably live in a cramped 60 sq.m. rented apartment, whilst your American counterpart lives in a mansion house in the suburbs of a major city.

You ride the public transport to work and your counterpart drives his luxury SUV.


The poor European probably doesn't even have a gun. What a loser!


Another way to put that is you live in a house that is the right size for you which minimizes the amount of stuff you need to buy just so it isn’t filled with cobwebs, and can actually keep it clean and maintained without having to spend inordinate amounts of time of your week to the point your weekends are entirely about “mowing the lawn, or clearing the attic”, and have walking or a quick bus ride access to all the amenities a major city has to offer, as opposed to the opposite, where even buying a pack of gum requires you to get into a car and conduct an activity that kills nearly 50,000 Americans a year.


wow what an intellectual spin on being barely compensated for working

renting in your 40s and making quite literally 1/3rd of salary an american sounds really cool now that i think about it


I don't think anyone is arguing that a lower salary doesn't suck.

This is a discussion about whether living in a suburb with a massive house is significantly better than living in a smaller apartment in a city.


Who whoa

He could be a Canadian and sharing a condo with 10 people!


I'm not sure what the dunk here is.

If someone in the US can afford a huge house in a popular and safe suburb, it is very likely they could also afford a smaller, luxurious condo in Manhattan, Los Angeles, or San Francisco.


As an American, I have to say that that really does sound nice. I've never been all that "good" of a consumer, but increasingly I wonder what I need more stuff for. I think a lot of it is a status thing which I've always resented being a bit caught up in.


As someone who has lived in the US for 20 years but has moved quite a bit within the country, and lived in multiple other countries before, but continues to travel a lot, I've become very aware of the "stuff" I have. And it's fairly obvious to me that the 2 largest drivers for the stuff have been:

1. Marketing 2. Needing to fill space

I believe most Americans live in far too large houses and would benefit from downsizing, especially once the kids move out. Additionally, I think Americans would benefit from some strategies to avoid impulse buying (the ones I have used successfully in the past, but have lacked the discipline to maintain include never buying anything the day I think of buying it, but always waiting at least 1 day, and avoiding using credit cards and almost entirely depending on cash).


> You ride the public transport to work and your counterpart drives his luxury SUV.

Oh, it's way worse. Within 10 minutes' walking distance from my home, I have a professional theatre, a concert hall, a cinema, a library, multiple very good schools, museums, several shopping centers, hundreds of bars and restaurants, a farmers market, and a ton of other places. I'm naughty and barely consume anything to visit those places, not even a drop of petrol. I'm so deprived of luxury that I walk to work like a Depression-era pauper.


no way! in america we don't have any of those things!


Within a 10 min walking distance of a US suburb?

Soccer moms was a phrase invented in the US for a reason.


the key difference is that the american can choose to live in the city and enjoy these cutesy activities. in a lot of european countries, owning a home seems extremely difficult without inheriting, so they have no choice but to rent

i think the op framed the argument in a way that will make a lot of people react negatively


Home ownership[0][1] is pretty much on par US vs EU.

[0]https://en.wikipedia.org/wiki/List_of_countries_by_home_owne... [1]https://eyeonhousing.org/2015/06/a-cross-country-comparison-...

A lot of myths in this whole thread.


Not really. We’ve turned most cities into ghettos to store poor people, so you need to either be connected to get into the better public schools, or have the cash to go private.

The countryside is similar.


Disagreeing is fine but myth is an odd word to choose since I live it in 2023. For reference, I'm from Los Angeles, moved to EU and can attest to this.¯\_(ツ)_/¯


My overall point is that of course your cost of living will be lower when you consume a lot less.

And I disagree that the quality of life is the same for someone who lives in a nice house vs small apartment, has to use public transport vs personal luxury vehicle and so on.


Consuming less, what a thought!

I feel I need to consume less in general whenever I’m outside the U.S. It might be the lack of stress that pervades everything in the U.S.

I don’t need material things to comfort me when my spiritual needs are taken care of.


That's fine but your employer is making the same or more due to your work, while you "enjoy" your frugal lifestyle.

Why not be properly compensated, spend less and enjoy life with extra vacations or early retirement?


Early retirement is usually a symptom of the above: you do not enjoy your present life, so you hope to escape the circumstances surrounding it.

Do most Europeans need an early retirement or are they living a relaxed, fulfilling life and have no need for an escape?


My point is that someone is exploiting your (very acceptable and correct, IMHO) relaxed lifestyle. It's the society you're inserted in, for better or worse.


Yeah, I get that people have different thoughts and priorities on what is luxurious to them. That makes sense. I'm not really a car person since I grew up needing one for 30 years in LA finding parking multiple times a day. I just wouldn't make too many assumptions about how things work over here. Not sure why there is an assumption that I live in a small apartment. Big houses are also cheap in the suburbs over here :) You should visit sometime!


Your "moved to EU" is very generic. If you say the city name it would become more clear to readers.


small apartment + not driving anywhere is much better


Consuming less is pretty much a moral imperative in the climate crisis.


Out of choice, not out of necessity.


Of course, the one having to do hour long commutes in personal tin can has it worse.


https://hips.hearstapps.com/hmg-prod/images/2025-cadillac-es...

Looks horrible. I'm sure it's much better to be packed like in a can of sardines with all kinds of random people.


To each their own. Personally I prefer to ride the metro when I could easily take an Uber or buy a car. It’s quite relaxing and super cheap.


You are right about the quality of life being different between the two.

You’re probably not right about which one is actually better.

https://news.uchicago.edu/story/cities-depression-lower-rate...

And this is in the U.S. which has among the worst cities but the best suburbs in the developed world.


US cities are also full of homeless people and thugs with guns. Plus it's not safe to walk on the street, you have to drive everywhere.

Pros and cons.


> US cities are also full of homeless people and thugs with guns.

So are big European cities like Amsterdam, London, Paris etc. The only difference is that it's not guns but knifes, machetes, brass knuckles and what not.

Those are just problems of big cities, not some problem unique to the US.


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

Top 50 cities (not in a war) with the highest homicide rates (best proxy for crime, (a) because it's most easily available, (b) it's fairly easy to compare across places because different places have different reporting and data collection standards) lists 8 cities in the US and 0 in Europe.

What is amazing and took me by surprise that even Eastern European cities just coming out of the Cold War have lower homicide rates than at least 8 US cities.

Also, if you think the homeless problem in the US is like anywhere else in the developed world you need to get out more.


“ Eastern European” cities came out of the Cold War in 1989…


Of course, the worst part about the EU homeless is they all speak in an 1950's gangster accent when they try and steal your wallet with a greaser style switchblade.


Have you ever been to one of these cities?


I have been to all of these cities. Each one feels unsafe at night, with the exception, sometimes, of the rich areas.


I have never seen EU compensation that is even half of what I make, it's usually 1/4 or 1/5th.


You likely never will, at least publicly. I moved from the silicon valley to Amsterdam and negotiated a custom compensation package. I'm making 70% of what I was making as an L5, but the cost of living is much cheaper than SF. My wife and I bought our apartment in the city in cash, and are also looking at buying a summer home in France.


oh crazy. Do you have a really high title or something? Or are you just an L5 making 4x what others in the same title have?


Title bump + different salary band. There's other SV expats here with similar compensation packages. Base salary is lower, but it's made up for in loads of stock with very fast vesting schedules. Tax wise it's nice because I'm no longer paying California state tax or most of my federal taxes (via Foreign Earned Income Exclusion). I'm just sitting on loads of RSUs, I'll probably quit once I get my permanent residency and retire for a few years to sell off and rebalance my portfolio.


There's a good post that goes into how salary bands work in the EU for SV Expats [1]. Basically for global talent, the total comp can be 4x to 5x what a local dev would expect to make. For obvious reasons, this isn't widely broadcasted or talked about.

[1] - https://blog.pragmaticengineer.com/software-engineering-sala...


> now most software engineers are using AI Copilot and ChatGPT in their work

Citation needed. I doubt we’re at the level of “most”. And if we are, I worry (even more) for the quality of future software.


I had copilot on as default for a while and it was more annoying than useful. Now I only use it if it is a task I expect it to do well, but honestly most of these could equally be done by becoming a vim/grep wizard.


It's not as big of a leap from using Google or Stackoverflow as it might seem on the surface.


Yes, it is. And I say this as someone who explored significantly more than the surface. Even the way you “search” is different, as is the number of results and contrasting opinions you see.


This is really important, it perfectly describes the OP. He is cheap and lives in a bubble.


You received two quotes and you assess US developers are 16x more expensive than European developers? I assess your venture is not likely to succeed.


> I assess your venture is not likely to succeed.

It works well for many companies offshoring to cheaper countries which is still a thing.


It's more that the thought process of interpolating things from two quotes indicates not much activity going on between the ears.


> This on top of now most software engineers are using AI Copilot and ChatGPT in their work which means that most quotes and salaries look very overpriced.

So, why don't you use these services and do the work yourself then?


Piece of cake ;) here is sample prompt:

    Please write a web app for me that does X, include everything I need to serve it.


> Please write a web app for me that does X

Looking for Twitter?


I think one of the more obvious reasons is because companies genuinely believed in the benefit of geographical colocation. And Tech has largely been a winner takes all industry, so paying large sums of more money to hire people is worth it because they payoff is huge, and if you're not #1 you're likely bust.

For better or worse American Tech workers have decided to voluntarily give up (nay, aggressively demanded to get rid of) the geographical colocation advantage. Assuming the whole RTO movement doesn't work out (and with the resistance one can see I expect it not to, especially when office leases come up for renewals and decision makers are like, why pay for the office when we can sell not paying for it and offloading costs to workers as an advantage to them, and they're not coming in anyways), I suspect we will find out the truth of this hypothesis within a decade as American salaries converge with global salaries.

That's assuming AI doesn't make us all unemployable of course.


If you want a simple website for, say, a local business, then a service like Squarespace or Shopify probably does what you want. Programming ability may not be necessary.

If you want something much more custom than that built from scratch, then I strongly doubt that you can get it done for $1-2k competently no matter where the developer is located.

To use a (somewhat poor) analogy, there’s a big difference in price between pre-built cabinets from IKEA and custom-built cabinets that exactly fit your space using your preferred materials and finishes even though both are just basic wooden boxes with doors that open.

AI has not impacted developer wages yet as far as I know. Pay expectations may have fallen a bit, but that’s got more to do with layoffs caused by interest rate increases.


Because SWE engineers in Europe are underpaid.

You create a software product you can sell it anywhere not like you are bound by the country. This gets exploited by European startups that hire much cheaper talent and offer much cheaper services to US customers.


I'm going to share an unpopular opinion: US engineers are drastically overpaid, living off easy VC money for too long. We're not that much better than our foreign peers (if at all). We just live in an epicenter of speculatory investment, with easy money and careless spending meant to give the illusion of early success prior to an IPO or acquisition.

The bubble finally burst and thousands were laid off, and the market is correcting itself slowly. Hopefully salaries will come back down to earth.

US techies are hated for a reason, because we're drastically overpaid compared to the skill and education that it takes (vs other white collar jobs) and we drive up costs of living for everyone else while contributing much less to society than your average doctor or engineer.

Covid made matters worse (I nearly doubled my salary switching companies during that time, although it was never my intent). The intensity of demand fueled even more unrealistic salaries, followed by even more intense layoffs.

In this environment, especially with our lack of social safety nets, you can't easily make a small and stable tech company that wants sustainable business instead of hypergrowth. Every startup aims to be the next Alphabet / OpenAI, instead of meeting some practical need in a niche.

The US has always been a gilded society with the capitalists driving society and economy, and we just happen to be higher up that pyramid for the time being, as their latest minions. Not because we are that special or that great, but just because they need us (for now) to recoup their investments. We're just pampered pawns in a sinister game, destroying cities and communities in our wake.

I'm glad Europe doesn't have the same mentality. Don't copy us.


While your opinion that US tech workers might be overpaid may be true, it bears questioning why this is happening in the Tech sector, one where even before COVID it was far easier to hire remote and offshore workers than say serving burgers.

The gap between Tech worker salaries in the US and abroad dwarfs the gap in any other industry by a lot, and in many cases may also be reverse (where the US employees are paid less).


US companies do frequently hire foreign workers. I worked with many at my last job. But there are still culture and language gaps to deal with, and even with foreign workers, these investment ventures couldn't hire enough people.

And the bigger tech companies with insane wages gobble up way more devs than they need, leaving it hard for non tech US businesses to hire developers. We didn't care because it upped our salaries, but now the flip side is we've trained normal businesses to see us as unaffordable. You can't just have a dev or two paid a living wage to maintain a website anymore, you need a whole team or else just outsource the whole thing to Vercel etc. We've consolidated much of the labor side to SaaS instead of regular devs in regular companies.

Anyway, I'm not arguing against the reality of supply and demand, but the sustainability of a demand side built off short term hypergrowth vs stable businesses spread across sectors. It's just another dot com bubble and I think it's not great for US society to have these extreme wage gaps, and not great for US business to basically invest everything we have into tech/advertising bubbles and not much else.


While this might explain why Tech salaries are high in general, it doesn't explain why US Tech salaries are so much higher than Western European ones (let's not even consider the gap with Asia/Eastern Europe).

Heck, there is a significant gap between salaries in the US and UK which pretty much eliminates nearly every cultural factor as well.

Why are employers paying over 2x to a SW developer in SF than they are one in London? There is no language or even educational advantage (I'd argue UK comp sci education has historically been far ahead of US education even)

https://www.levels.fyi/t/software-engineer/locations/london-... https://www.levels.fyi/t/software-engineer/locations/san-fra...

Why are those non SAAS companies not simply hiring up all the London based developers? Why are the SAAS companies paying their SF developers the salaries they are when they could double their workforce for the same amount by hiring them in London instead?

The obvious (and possibly wrong) explanation is that companies genuinely value employee colocation and were willing to pay a premium for that, and the obvious choice to colocate was the US since the largest absolute number of top tier SW devs are in the US.

Another possibility is that the demand/clients are largely located in the US so there's a benefit to hiring people living in the US who would better understand the market. I don't think much of this explanation though, both because it's not true that the US is that much bigger a market (and for most companies RoW is bigger than the US) and also because of the prevalence of US culture most people (especially in the SW dev industry) are probably well aware of US cultural peculiarities.


At a 2x difference it's probably not worth it to have to deal the hassles, immigration, labor laws, relocation, time zones, cultural/language differences (yes, even between US and UK there are differences!). But compared to India, with 10x+ the wage difference? Suddenly it's worth it.

I don't think 2x is actually that high a differentiator between any two people doing the same job... it's easy to believe that someone can do the work of two other people, or twice as well as another particular person. It's within a believable variance. But 10x, 25x, 100x...? Not so much.

And in fact, it probably suggests where US wages SHOULD be -- similar to Western European ones -- if our market was more realistic and not driven by VC money. Well, with some affordances for our different social safety nets and costs of living too.


Disagree. SWE in silicon valley or FAANG and similar companies for sure. Out of all software engineers in the US though, they are likely the minority statistically. You've got your IBM's, GE, John Deere, payroll software, accounting software, etc. Toiling away at some blue-chip F500 company in software does not compel the same total comp levels by any stretch. Its an order of magnitude difference. No bonuses, crappy healthcare coverage (like thousands out of pocket for childbirth), years with inflation outpacing any annual raise, no stock options/RSUs, etc.

Its funny how in forums like here on HN people comment about layoffs, PIP's before vesting of stocks, unfair labor practices, etc. and then tout those hypergrowth companies as well and join on the money train looking at leet code exercises to get in and comparing total comp numbers and stock grants.

> you can't easily make a small and stable tech company that wants sustainable business

There are many examples of companies that do this, Basecamp for example. There are also company structures (like a worker cooperative) that do not resemble the common S-Corp pyramid where all the profits rise to the few at the top. I've never heard of a startup or tech company go that route. As much as startups have these cool mission statements about changing the world, its the same capitalism as other industries.


I don't know... I hear what you're saying, and I partially agree with it, but it's not as simple as "only FAANG is the problem". There are trickle-down effects on the rest of the industry and society too. Touched upon it in a cousin thread (https://news.ycombinator.com/item?id=38473513), where I was arguing that the big tech companies have trickle-down effects that drive up wages across industries and makes devs more and more unaffordable to non-tech, non-FAANG companies.

I've never complained about equity or such because I never had any, having never worked for a big tech company. Plus side, I never had to do leetcode either :) But even then, my last job was at a F1000 old-school manufacturer, and even there I was paid $100k, with free lunches, loose PTO, company paid trips, etc. -- all for making a simple frontend in React, utilizing less skill than I ever have before (because it's so specialized into that stack nowadays, vs the old days where you also had to deal with networking, sys admin, VMs, etc.) Those were cultural things they copied from tech companies. At other jobs before that, I was still paid much more than most of my peers, who had better education and who've worked their asses off for years. Before 2023, dev work could launch you into the middle class after just a few months of bootcamp and a good reference or two. What other profession is like that?

I think that's my primary gripe with modern US SWE: it's a get-rich-quick scheme requiring little actual skill or training, and sometimes, little actual work. The work isn't that hard, and something like Upwork is probably more representative of what a realistic market would pay (much less).

If I ever imagine myself to be fairly compensated because not everyone can do coding (which is true)... then I look at how teachers, adjunct professors, electricians, plumbers, truckers, etc. are paid and I realize yeah, no... I just sit on my ass all day, code a few hours a day and sit in on meetings and such and the money comes in. It's not even in the same league as other professions in terms of how hard you have to work vs how much you get paid. Especially when I look at my actual friends in tech proper, who work like 10-15 hours a week by their own admittance a week and make way more money. All around it just screams "bubble".

We're not paid this much because of our skills. We're paid this much because capital was hoping to cash in on the hypergrowth before it bursts.


> If I ever imagine myself to be fairly compensated because not everyone can do coding (which is true)... then I look at how teachers, adjunct professors, electricians, plumbers, truckers, etc. are paid and I realize yeah, no... I just sit on my ass all day, code a few hours a day and sit in on meetings and such and the money comes in. It's not even in the same league as other professions in terms of how hard you have to work vs how much you get paid. Especially when I look at my actual friends in tech proper, who work like 10-15 hours a week by their own admittance a week and make way more money. All around it just screams "bubble".

Honestly you're looking in the wrong direction. Yeah, there are lots of undercompensated lines of work. But lots of white collar work involves even less actual work or competence than software engineering. Offices are full of people who are terrible at their jobs but basically just fail upwards. Local governments and public school systems have tons of administrative positions that get paid big six figure salaries to basically do no real work.


In comparison we don't physically "do" much, which is true but its really absurd to compare industries against each other. Teaching is largely paid out of tax money and what politicians want to pay them since they usually control state and local budgets. That is a vastly different economic model than some billionaire VC dumping millions of dollars into a bunch of startups hoping he/she gets a hit. Or some Fortune 500 company that makes billions a year. There's a series on YT by a handyman who was literally paid $100/hr to replace a light bulb once. A skilled tradesperson in a town of tech workers that don't DIY anything probably makes bank.

We're paid this much because the market pays this much. Its capitalism.


I know :/ US style capitalism is what I'm complaining about. Ridiculous system.


>Covid made matters worse (I nearly doubled my salary switching companies during that time, although it was never my intent). The intensity of demand fueled even more unrealistic salaries, followed by even more intense layoffs.

Yup.

"Fear and greed drive markets."

That well-known statement holds true not only in the stock markets, but also in any market where there are wild swings of supply and demand.

Human nature, short-sightedness, and ignorance, folks.

"Those who don't learn from the past are condemned to repeat it."


so much this


You get what you pay for. Good european engineers have US rates.


Not true, even FAANGs with equal hiring bar pay US engineers a lot more.

The thing is not only FAANGs pay great salaries in the US, there are tons of other companies that do it. In Europe it's the FAANGs + some trading firms and that's it.

This reduces the desire to perfect one's craft and people become chill & lazy.


You should try to read before posting, the question is about contracting.

Also, FAANGs in Europe suck and most of their good developers move to the US.


The hiring bar is the same and the number of companies in europe that ask much harder questions for 4x lower salary is huge.

European state universities are pretty difficult and the requirements are much harder than US ones. No one hears sob stories - 59/60 is still a fail for 1 point, better luck next time. There are no privileges in Europe for sitting in first row.


At least we can agree on something. Try contracting, you can get more than FAANGs pay in Europe.


It's difficult getting the first client. You mean like Upwork?

The other concern is it would likely look very bad on a resume, did this for one client another thing for another. I'm early stage in career and not an expert on anything yet.


There's another possibility that I didn't see here.

I usually help people hiring developers and when you get quotes that are that different with people on similar seniority levels it's usually because the requirements aren't specified enough.


It costs time and efford to come up with detailed-enough specification :)

I once wanted to take a project with BigCorp, my first offer was dead cheap since their requirements were consisting of two lines of text. So I gave them a feel of what I'd build for them within their tiny budget. 4 years later they still try to get somebody to build that thing for them, but specs are now 40 pages long and budget is still tiny. I dropped out 2 years ago (after providing n-th offer quoting 15x more than original quote), at the time I was already smelling a trap project, now I'm glad it went that way, I feel sorry I spent time preparing those offers.


1. Silicon Vally carries a lot of weight to a point it increases prices outside of it

2. Venture Capitalism has gone wild in the US

3. the true cost of living, as in if you want proper health insurance + healthy living + security/peace of mind in the US is can be quite high, much higher then in the EU even through taxes are much lower (creating a huge gap between what seems to be the cost of living if you don't look into details and what is)

4. UK is not in the EU anymore, and the effect of leaving it are starting to hit hard


I had a project that a US developer wanted 4x the money and 10x the duration for a really small project. I went with the eastern european developer and it was fine.

The eastern european developer outsourced the project to India too when i read the code signature, which I laughed about.


cost of living in large metros in the US is easily x4 of what it is in western europe.

also websites in western europe can easily be 10-25k if you work with an agency.

you are wrong that real software engineers use AI tools primarily to write code.


It probably comes down to large US corps simply having more money. Since they're in competition with each other they pay more to get and sometimes even hoard devs.


> This on top of now most software engineers are using IDE Autocompletion in their work which means that most quotes and salaries look very overpriced.


And the compilers. Do software engineers even write code anymore? It all gets compiled so why do we pay these people so much?


I didn't realize inflation was that bad in the US!


1 or 2k seems fishy.


The amount of time spent discussing simple things like font choice, button shape and placement could eat that much money rapidly.




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