People work incredibly hard, long hours and often with very little to show for it. It's surreal.
This is a danger of American TV shows and movie studios remaking shows for the American audiences. They don't get to see that Europe is mostly a developed place.
Salaries for professionals are markedly lower, we live in much smaller houses etc. I get the feeling that when you're winning at life in America, you're really winning. But when you're losing you're really losing. In Europe the ups and downs of life are more smoothed out.
I'm a high school drop out and we each make less than the median nation income and I feel we are better off than if we lived in the UK. Though I admit life from 18 - 25 would have probably been less of a struggle there.
Really curious because if the next smaller house in size is a trailer then the UK sizes must be weirdly small.
US @ 77 sq meters per capita vs UK @ 33 sq meters per capita.
We're a crowded island, we have small houses.
The UK has a lower population density the than both Belgium and Holland, both of which have larger average houses than the UK. So there has to be more to it than simply being 'crowded'.
I've also lived in enough places with various levels of health-care and insurance (and lack of insurance) to see this as a potential problem.
So, instead of reading imperiousness, how about worry?
The problem with the housing crisis was people had variable rate mortgages that made their payments quickly balloon up under them. We have a fixed rate so that can't happen.
This was before the ACA though, I don't know how it works now.
Sure, you prioritizing having a big house over not worrying about having to cough up $5k in even of an illness. Or worrying about losing your health insurance. Medical expenses are covered somewhat by insurance but you're still getting a huge bill if you're significantly ill.
I was damn lucky I could afford it but if I go sick a few years earlier I'd be totally and completely fucked. Of course, if you can't imagine it you can't appreciate it.
We got here by saving together and living in a one room apartment for 5 years. We don't have new cars or iPhones and we go out to eat about once a year (that we pay for her mother offers to take us out from time to time). I just upgraded my 30 inch CRT TV to a 50 inch 4K after a decade of loyal service. Its not for everyone but its certainly not impossible. I make about 43k a year pretax and she makes 37k for reference. Median income nationally is 55k or so and about 75k in my county so I suspect a great many people have the opportunity to do just as we have done.
Inequality is the result of people earning different amounts, such being compensated in proportion to the value they generate - rather than everyone earning the same irrespective of that.
Inequality is the result of reaping the rewards of your own work: someone is more effective, so they earn more. Why is it bad? How can any market economy even function without it?
If an author writes a really good book, then it will sell and they'll make a lot of money. They earn a lot more than the author who writes bad, unpopular books. That's an example of income inequality.
A great comedian will draw large crowds and his shows will fetch a high price. That's an example of inequality too. What's wrong with that? How will anything work if it were otherwise?
Inequality is arguably not the right economic easure to care about for social issues. Imagine every human in year 7000 is rich enough to own entire planets, but the super wealthy own 100 planets. Who cares? Why is that a problem? If your concern is about a particular class, then you should look at their standard of living and progress in it over time, not compare against how much someone else has.
Few people object to higher rewards for those more talented or harder working.
Let us make an experiment and drop Paul Graham in a rainforest to see how much value he manages to extract.
Then, once he has starved to death or died from some random infection, let's think again what makes IT jobs more valuable than garbage collector jobs.
The point he and Mr Graham are trying to make is simple. People are not same, and by that definition are not equal.
The fact is that this inequality manifests itself in far more different ways before it appears as income/wealth inequality.
Far before some one is rich and poor, they are good and bad at playing the piano, writing a book, programming or anything for that matter. Wealth inequality comes far later.
You attribute far too much of a person's wealth accumulation with skill. Is Bill Gates the best programmer of all time?
>People are not same, and by that definition are not equal.
It's hard to argue with this, but I don't see it coming up much in the gender or race discussions. I wonder why.
>It's hard to argue with this, but I don't see it coming up much in the gender or race discussions. I wonder why.
Because in "modern" society it's not politically correct to recognize, let alone discuss, any differences whatsoever between age, race, sex, education, skill, etc. If you have the gall to try, you'll immediately be torn apart by the howling "progressive" masses.
Bill Gates is good at a lot of other things including programming.
And I'm not talking about skill. Its also work, persistence and variety of other things that add up.
>>It's hard to argue with this, but I don't see it coming up much in the gender or race discussions. I wonder why.
People are only equal by rights. They are definitely not equal with regards to hard work, persistence and range of other skills.
Isaac Newton being better than me in Physics, isn't exactly racism.
According to the metrics our society uses to reward him, he's quite litterally the 85.000.000.000x dev.
And here's us thinking 10x devs don't exist...
If you are poor enough, chances are fairly good you will never get to touch a piano to even find out if you can be good or bad at it.
So no, it does not come far before someone is rich and poor. If you are poor, a whole lot of avenues close off to you early regardless of skill, and the odds of you remaining poor is overwhelmingly higher than that you will be able to overcome it, irrespective of how hard you work or how smart you are.
What I'm questioning is not whether people's merits are unequal, but the tool used to measure them. My point is that a measure is inherently relative.
The thought experiment I offer is another way of measuring someone's utility. It is inherenthy flawed and unfit to the needs of our society. But again, the person I responded to didn't establish that his measuring tool is an optimization function for our society either.
Also this is not related to whether two people are compared on their job, but to whether two people good at different jobs are compared.
More recently I’ve come around to embracing the notion that peoples’ emotional state regarding their relative place in society and their future prospects is as important as their absolute standard of living.
Sure, as it's been argued by PG and many others, in material terms even the poorest in modern western societies are far better off than wealthy people of hundreds of years ago.
But everyone still has some degree of need to better themselves, improve their circumstances, and aspire to live more comfortably and prosperously. And crucially, the ability of young people to find a partner and have a family is strongly influenced by their prospects for upward mobility.
So if societal inequality is such that a young person trying to make their way in the world sees no opportunity for meaningful improvement of their circumstances, and therefore no real prospects for finding a good partner, raising a healthy family and achieving a good level of status in society, then the motivation to remain part of mainstream, productive society can easily be lost. This is what leads to people "dropping out" and ending up in a life of unemployment, depression, substance abuse, crime, violence, etc.
So, sure, some level of inequality is inevitable and healthy, to the extent that it rewards people for effort and ingenuity and gives people something to aspire to. But too much inequality becomes more of a de-motivator and a source of resentment, and can cause societal breakdown, and I think this is what is happening to some degree across the western world.
The reality is that if you were born somewhere poor, odds are overwhelmingly that you would earn a tiny fraction of what someone born somewhere where they are provided proper education and an environment where better alternatives are available.
So maybe you are compensated in proportion to the value you generate, but the problem with this is that this is only superficially connected to the effort you put in and how effective you are.
Some people who do well do so in part because they put in exceptional effort, but the biggest predictor of your earnings and success in life is how where you live and how wealthy your parents are.
This is the problem we have with inequality: It has very little to do with effort or skills, and a lot to do with pure chance.
This is one of those things that is worse in Europe than in the US. Inequality is perhaps less in absolute value, but it's more sticky. The upper class of the US has plenty of immigrants and people who were born poor. Yes, being born rich still provides advantage, but it's clearly not impossible.
In the EU, the upper class has
zero immigrants
very few people born poor (upper middle class minimum) (out of the top10 riches Frenchmen, one was born to a family with less than 100 million francs at the time they were born. One. And he wasn't poor by a reasonable definition at all)
My uncle became a surgeon, and my parents become engineers, through the means of a free public university, which propelled them to upper middle class.
There is still much to achieve in French social mobility, but these kind of stories are plenty. Having spent some time in the US now, and seeing the stories of people who go on to go to engineering/medical/etc schools, I can't say that I see comparable things happening. Everyone I know who went to med school comes from upper middle class family AND had to take on tons of debt.
You shouldn't be looking at the top 0.001%, but the top 10%, perhaps even 20-30%, and how they live/what kind of social protections they benefit from.
Of all OECD countries, only in Slovenia, Chile, Italy and the UK are the intergenerational correlations between the earnings of fathers and sons stronger, for example.
The rest of the OECD, including most of Europe, does far better in that respect.
Representation of immigrants is something I haven't looked at, and it may very well be that the US does well there, but there are a number of confounding factors, and it in any case doesn't change the fact that social mobility is poor in the US.
[1] http://www.epi.org/publication/usa-lags-peer-countries-mobil...
That's not true, and exactly the kind of misleading statement that leads to people voting against their own interests.
You'd just prefer if the Democrats were even more towards your preference on fiscal matters. I can agree with that, whether it would fly with the American voters sufficiently to overcome the rural/republican tilt is another matter entirely.
Maybe occasional rewrites could be a solution, but if they happen without the customary devastating violence, I'm afraid that the rewrite would only further entrench existing corruption (and even devastating violence is far from a guarantee that this won't happen, quite the opposite actually).
Maybe have a dozen or so mixed teams create separate drafts in isolation, vote out the worst half and then select one of the remaining by chance? Something along these lines might greatly help rewriters to forget about their own personal or group interests for a while and focus on what would be good for society as a whole. It's most likely just a theoretical design, right?
People aren't voting 'against their own interests' in the sense that they're stupid. They're voting for their own interests in a party which also has interests they're against because it's the only practical option. For example, someone who wanted less immigration and pro globalism rules (aka US protectionism) but then also thought things like equal rights for trans people and gay marriage and allowing abortion were the right would be up a creek without a paddle. Either option (with a decent chance of getting elected) is against their interests in some way.
Similarly do they want Obamacare repealed because it's a "disaster" and they've been promised better cheaper insurance by someone who doesn't actually have any kind of plan to deliver on that promise?
Is there only a debate about gay marriage at all because it's been turned into "an attack on traditional marriage"?
Are the liberals intentionally ruining the economy because they've joined the global warming religion that is basically an excuse for communism?
Some of this is ignorance and being conned, but some of it is stupidity as well. It's probably not wise to ignore that reality.
This is not the paradox that people think it is.
If you're a coastal, progressive elite, you've already gone "all in" on an urban, socialized, statist (for good or for bad) social arrangement. You've shifted towards a pole and you might as well keep doubling down on those strategies/policies.
But if you're rural (or, as is the case with most of red-state US, sort-of-semi-rural), you're not down that path at all.
There are costs as well as benefits to social benefits and welfare programs. Many of those costs may be intangible, but they are costs nonetheless. Consider: what if a very large portion of your self esteem and "face" was tied to being self-sufficient in certain realms ?
And so therefore, if you're not already at the urban-progressive-socialized pole of attraction, it makes sense that people resist the costs (and the benefits) of going down that road.
First, inequality is needed so that there is a reward for working harder, doing more. The one who coasts through their education doing only the minimal needed before getting a job doing the same should be rewarded less than the one who gives it their best. BUT, inequality should never be so great that the kid who coasts can come from such a privileged position that they are forever in a better position than someone who works hard. For a lot of American's, working hard doesn't really get rewards, so you could say we have exceeded the optimal amount of inequality and thus need more equality. But if we envision a fully equal system where everyone is equally rewarded, there is far less incentive to do more than the bare minimum. Even supporters of basic income think that those who go above and beyond should be rewarded with extra income above the level of basic income. I've never heard of anyone supporting a basic income plan where all income beyond the basic income level is taxed at a 100% rate. Even a 50% or 75% tax rate indicates those who do more should have more, with the difference being how much more.
For this, we need to make sure the inequality is high enough that effort is rewarded, but keep it low enough that birth does not convey special privileges.
Second, equality will never exist in all areas of life. Even if we had total financial equality, some people are more sociable, better looking, etc. As such, what people have access to in our society is still unequal. In a financially equal society, the one with vastly superior social skills, or who is attractive (look up the Halo Effect), has access to more resources and thus inequality still exists. Allowing some level of financial inequality allows people a way to do better when they lack the above skills.
Consider some modern day developer who is slightly autistic but highly functioning enough to hold a good job. Their ability to earn more can, to some extent, help offset the lowered levels of social skills in the extent it allows them to achieve their life goals.
The only way to have full equality beyond just financial equality would be to implement a tax on anything that can be considered a good or service in the most abstract of methods, and I think we would find that even the most ardent communist are all out libertarians in regards to these social goods and services.
That said, I still feel that the system is better than the US system, there's less inequalities, less worry of disasters because you know that you'll be protected by the system and brilliant kids have a chance of getting a good education even if their parents are poor.
If having more money and a bigger house is winning that's true, but many people don't see life that way. Being happy, having time to enjoy life with your friends, doing worthwhile and interesting things, raising your kids well, etc are also ways to win. In general if you talk to an older, wealthy person, they say those are things that should have done instead of working so much.
Try enjoying your time with friends and long vacations when you work 12 hours a day, 7 days a week! Ah, you can't! See!
There's a balance to be struck. Having no money isn't fun, but having no time isn't fun either. If you talk to people about their regrets, it's much more common to hear people lament working longer hours than not having had enough money.
This is an age old debate, and it's very hard to compare one vast continent to another. Regional differences between US cities and European cities are at least as large or larger than the difference between the avereages of US and European salaries/living standards etc. The difference between central manhattan and rural Apalachia is just like the difference between the fancy parts of Stockholm and rural eastern Europe. There is just no comparison in Salaries, Life expectancy etc.
When it comes to those of us that are "winning", the difference is there, especially for some professions like doctors who can basically make a killing in the US but not in Europe. That is probably to do with that it's an economic risk/investment to get the MD in the US, whereas in Europe it's normally free. When you are a finished doctor you aren't entitled to a fancy car - we just paid your MD so you better get to work and be thankful ;)
To make a fair comparison between me (a software dev) and a comparable person in the US (in a similar metro area of ~1M people) you'd have to make a pretty tricky calculation involving costs of healthcare, childcare, money saved for retirement, pensions etc. On the bottom line I think the US person would make a bit more money, but on the other hand would have a worse work/life balance.
While we're correcting misconceptions, in the UK it's most definitely not free.
But I believe it's still a lot cheaper than the US. The universities are capped on the fees they can charge, and your student loan is regulated by the government (you only start paying back when you're earning over a threshold).
Wage inequality, parental leaves, employment security, higher education etc.are decidedly "non-european" in the UK.
So yes when I talk about "Europe" in the context of "Europe vs US" I think the UK needs to be considered separately.
(to the Americans: In many European countries "US conditions" is commonly used in political discourse as a way of scaring voters with the image of chaos and suffering)
Relative to the US, absolutely. Relative to Scandinavia, not really.
No. No you don't. :)
What is the political situation now in the UK wrt. free higher education? It seems like one of the biggest social justice/social mobility issues a society can have. Is that not a top issue for Labour?
In Scotland at least, student loans are only used for living expenses, similar to your experience. Tuition fees are paid by the Scottish Government, as education is a devolved power [1].
In England, tuition fees are paid by the student, usually through a student loan, and are capped at £9k/year.
[Warning: political] I couldn't answer on Labour's priorities. They're becoming increasingly irrelevant north of the border, and increasingly impotent south of the border.
Personally I'm surprised that there isn't a lot more anger from English taxpayers about this. It would be very interesting to see whether an independent Scotland could continue this policy.
Stats here paint are more nuanced picture: http://www.independent.co.uk/news/business/comment/are-the-s...
An experienced engineer at google or facebook make 200k with a sizable signup bonus. As far as I know, theres no comparison between what a soft dev makes in the us and what he makes in europe.
This is from someone that lives in south america, and is considering moving to either europe, NZ or America, and hands down america pays so much more than anything else.
Not to mention that people criticizing work-life balance of engineers in the us havent visited google offices.
Office are part of work, not part of life
Your priorities, of course, may be different.
Getting new hires up to speed is expensive enough that they'd be pretty stupid to actually do this. Sure a few do, but it isn't common.
Also, a couple minutes with google turns up this: https://stats.oecd.org/Index.aspx?DataSetCode=AVD_DUR . If it says what I think it says, getting a new job really is easier in the US (like it should be, because as any economist will tell you this is what has to happen when a bad hire is less of a disaster for the employer).
I think it boils down to whether you want to take care of yourself, or if you let the state do it for you.
In part, yes.
But also, there are two approaches to reducing downtime. You can increase MTBF (make things more reliable, make it harder to get fired); or you can reduce MTTR (make things easier to fix, make it easier to get hired somewhere new). Europe goes with the first approach, the US goes with the second (which I very much prefer, because it doesn't gum things up).
Separately, there's also making downtime less of a problem (failover systems, all the various other social safety net things). The US is generally known to kinda suck at this.
I believe the point they were making is simply that they can. You're not protected (aside from the small handful of reason that actually are protected).
I live in a country where you have to pay insurmountable amounts of money to fire employees. The salaries that us pays are about 8x. Gimme at will employment.
> I would definitely take the 60K if it includes awesome public transport, unemployment money, affordable healthcare, a month of holidays, and having free time in the evenings for hobbies.
I had plenty of free time in SF to do whatever i wanted when I worked there. Maybe i was lucky, but i did not find work-life balance to be particularly out of whack. Europe is more relaxed, but also less ambitious in terms of culture. That can be frustrating as well.
> I would definitely take the 60K if it includes awesome public transport, unemployment money, affordable healthcare, a month of holidays, and having free time in the evenings for hobbies.
You are paying for all those things, its not like they are free in europe. You can also pay for them in the US on software engineer salaries. Google has ample pto, facebook has parental rights, etc. You can always take unpaid time off, something easier to do in the US than in other countries.
Adding restrictions on employer's ability to fire makes employers far less likely to hire. It enriches the already employed at the expense of the unemployed. If anything it makes more sense to have at-will employment in countries with strong social safety nets because unemployment is less disruptive there.
I'm in the Boston market and median salary for devs is around 80-90k when you include all skill levels, but every single dev I know has roommates or an hour+ commute into the city and higher healthcare costs than Germany.
I'd believe that you would make more overall money in the US once you got to the higher end of the market, but it's not as simple as a calculation as you are making it out to be
They should probably look for housing near a commuter rail then
If nothing else it's much more pleasant, anyway.
There are many perks to Berlin over SF, but salaries and net income are not it.
Im just emphasizing that the fact that europe has benefits, it does not necessarily (or likely) outweigh the difference in salary from one to the other. You are certainly taxed more by a lower wage and by a higher tax rate that could compensate ubering every day and private schooling.
Higher costs, lower stability, and no safety net... I think that I would prefer that Berlin salary (and I'm a US resident).
That said, speaking as a New Zealander: don't come here. There are no jobs, and if you find one, you will be underpaid. If you're looking for the weather and standard-of-living combination offered by the southern hemisphere, consider Melbourne or Sydney instead. Very few of my graduating class at the University of Auckland will end up remaining in the city, I suspect.
I just heard NZ was doing a state sponsored world-wide call for workers. Is it because people are leaving? Where are they leaving to?
If people leave, normally they leave for Australia (because it's very easy to do so).
I think Silicon Valley megacorps are exceptional outliers. Obviously people can make silly money at Google, but so do athletes in the largest leagues. It's just not a useful comparison between continents with millions of employees. Exclude the top 10% and bottom 10% makes for a more reasonable comparison.
[0] https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
Housing is the main difference: you can get a fairly large place in berlin, and you can have a family there. But SF is one city, there are pleny of other cities in the us more family friendly (if not any other city).
I remember recently a map showing the purchasing power by salary per state, and the biggest purchasing power was nebraska.
Google and other tech companies in the U.S having nice offices doesn't mean the work life balance of Googlers is something to envy. Probably the opposite actually (three meals a day makes you stay there for dinner, nap rooms to let you stay even later). Not a great work life balance.
Source: know Googlers, have been to Google offices
While Berlin is a great city, it is very far from being a top-pay city in Europe.
Moving back to Berlin, I went part time because it was sufficient.
Arguably that's due to constrained Supply - http://econlog.econlib.org/archives/2013/03/the_high_price.h...
There are plenty of tasks doctors are commanded with that do not require mastery level of expertise, and that enormously raises the cost of medicine. You dont need to study 10 years to read an EKG, someone could learn all the EKG patterns in a much shorter time.
A funny story about this in argentina: anesthesiologists earn more money than surgeons. Surgeons are not unionized, but anesthesiologists are.
Where are you getting this information from?
It's really not - in the EU the difference between median net income in say Norway 41 483€ or Denmark 28 364€ and Romania 2 315€ and Bulgaria 3 332€ - that is over 10x differences between poorest and richest countries. US doesn't have that level of disparity between states even if you count Puerto Rico.
http://ec.europa.eu/eurostat/web/gdp-and-beyond/quality-of-l...
If you're working as a professional in the US it's pretty rare that your health insurance isn't at least mostly paid for by your employer, if not completely paid for by them.
But like you said, that's why it's a tricky calculation. All of which varies if you're single or married with children.
I'd imagine that for the young and healthy people without children, it isn't hard to sock away more in the US.
When a substantial portion of "success" (especially monetary) can be attributed to luck, isn't this the sort of environment you want?
Depends on what you mean by winning.
If by winning you mean having lots of money to buy your family a bunch of stuff, then yeah.
However, if by winning you mean having the time to build a strong relationship with your family and maintaining your own physical and mental health, then you might have a more difficult time with that.
When people spend most of their wake hours in a cubicle smaller than the bedroom where they sleep in something is very wrong.
What is your implication, that the government should require all businesses to be closed on Christmas Day? Does that happen where you're from?
>Would the religious right not support that?
Perhaps you have a bit of a boogeyman image of the 'religious right'. Regardless, the question is moot because just about everyone celebrates Christmas in the US, religious or not. A better place to examine the question would be Easter weekend, where only 26% of businesses offer PTO for Good Friday and 6% offer it for Easter Monday. I try to follow religious and political news, and I've never heard of anyone try to make a push to make Good Friday a federal holiday. I'm sure some politically active religious folk would support it if asked though (and it can be achieved by secularizing the name, making it "spring holiday" or something like that[1]).
[0]: https://en.wikipedia.org/wiki/Public_holidays_in_the_United_... [1]: https://en.wikipedia.org/wiki/Good_Friday#United_States
No. But if the government requires employers to offer a day or two of paid leave, employees could get Christmas or a nearby day off.
As you point out though, this may be moot as most employers offer this anyway. But other holidays might be a good target.
> Perhaps you have a bit of a boogeyman image of the 'religious right'.
Huh? I was appealing to why they might support something, not oppose it.
I might not have read it in the tone you intended, and boogeyman might not have been the right word I was looking for. I'm used to the discussion of religion on this forum having a suspicious or negative tone, so I apologize if I projected that onto you incorrectly.
It seemed strange to me that out of any number of political forces in the US you chose to mention religious right, as though they're this monolithic group that are preventing mandatory holidays and could get it done if they wanted to.
I don't know if it's really even as partisan of an issue in a liberal/conservative or Democrat/Republican sense; it's just not part of the culture here, at least not on the federal level. I'm thinking about blue laws here, because religious influence did translate to mandatory days off for a lot of businesses in times past. But as far as I know, most of that was state-by-state. I'm not aware of federal blue laws, or any kind of federal mandate on holidays.
So, you'll typically get 8-10 PTO days, independent from vacation policy. That'll be different in the service industry - it's lucrative for some restaurants, gas stations, hotels, etc. to be open - but a lot of times hourly workers will get time-and-a-half for their troubles.
[0]: https://www.opm.gov/policy-data-oversight/snow-dismissal-pro...
It depends on the company.
Or that it would collapse into Greek-levels of poverty.
A society where everyone is missing one leg will still function and be largely productive, up until they have to compete with a society where everyone has two legs. That leg is something like health care, maternaty leave, vacation, VAT, higher taxes. In the USA policy indicates that they'd rather give up their literal leg, than risk being #2.
Tax calc for me:
Employer pays $8k
Payroll taxes deducted: $2k
My gross salary: $6k
My income tax: $2k
My net salary: $4k
If I make one big pruchase for all my $4k, the VAT is (with some exceptions, 25%) so I buy goods for $3k + $1k tax.
So basically, of $8 paid by my employer each month, I can buy goods or services for $3k. That's pretty steep! If you look at the income tax above, you'll see it's only 1/3 however.
You make $8k a month:
You pay $2k in taxes (Employer pays an additional $1k in tax), so your income is 9k.
You pay $500 in health and other benefits (employer pays another $500)
If you spend remaining $5.5k, you'll usually pay $250-$500 In sales taxes.
In other words, you have $5k remaining to spend on shit that you probably don't need.
I don't know what the grandparent poster was trying to say "employer pays $1k payroll tax so you make $9k"? Just shows how confusing this is (apparently)
Denmark is an example of the opposite of this: Employer social security contributions make up 0.8% of total tax wedge, and they've rolled all of the employee contributions into the income tax, which makes Danish income tax look really high compared to most other European countries that have much higher employer contributions, and presumably contributes to the idea that the Nordic countries are particularly high tax, while Denmark overall is actually roughly average for OECD.
> I don't know what the grandparent poster was trying to say "employer pays $1k payroll tax so you make $9k"? Just shows how confusing this is (apparently)
He clearly misinterpreted you and though $8k was your gross salary, rather than gross salary + payroll tax, hence my original comment to him.
I'm a software engineer and work is a means to an end for me, to feed my family, give me financial security, and enable me to do the things I want to do when I'm not at work. For the most part I enjoy what I do but I would strongly prefer to spend less time at work and have more "me" time. I certainly don't want the responsibility and stress of my own business.
The epitome of happiness is certainly not starting your own business for most of Americans.
How did the employer paying an extra k mean you make more? I think it's only relevant to talk about 2 figures: a) the expense to the employer and b) your take home (net) salary.
Everything in between there is "taxes" and who pays them and when is less important. If the employer needs $9k to hire you that's what it costs. Then the tax man takes $1k payroll, you get $8k, pay $2k income tax. That leaves you $6k after all payroll and income taxes from a starting $9k making the income+payroll taxes 33%.
Just because your employer is the one writing the checks doesn't mean that the tax burden is really falling on them. The employer side of FICA, for example, is essentially a tax on employee's income.
For average earners, the tax levels you outline are possible in Belgium, Austria, Germany, France, Hungary or Italy, based on OECD numbers. All of which outdistance the Nordics when it comes to taxation.
Again when looking at averages, of the Nordics, Sweden is highest with ~42.7% of total labour cost going to taxes for an average earner (of which 23.7% is employer payroll taxes). Norway has 36.6%, with 11.5% employer payroll taxes. Denmark 36.4% with 0.8% employer payroll taxes. Finland 43.9% with 18.7% payroll taxes.
Your VAT calculation is vastly exaggerated in any case, as from your net salary you also have to deduct housing costs, food and other essentials, many of which are tax exempt in most European countries. Last time I calculcated how much of my gross salary (excluding payroll taxes) went on VAT, while I lived in Norway, it was closer to 4% (of gross wages, so lower as percentag of total labour costs to make it comparable with the numbers above) despite earning way above average and having a higher disposable income after housing costs etc. than average. For lower earners it will typically be lower, as a lower earner tends to have less disposable income to spend on products that are rated at the full VAT rate.
Yes, I'm above average income for Sweden. Roughly my employer pays 1/4 payroll and 3/4 to me as gross salary. I pay 1/3 tax on gross salary and keep. 2/3. That means the net share of the employers' expense is roughly (2/3)x(3/4) which is 1/2 or 50%.
For a median income, the calculation would roughly instead be: the employer pays 1/4 payroll and the employee 1/4 income tax on that, meaning the employees take-home earnings are (3/4)x(3/4) ~ 0.56 so about 44% taxes (Which is surprisingly close to the figure you had there of 42.7%)
The VAT in my calculation was obviously the most exaggerated one because as you point out - a lot of my expenses have lower vat, or even negative tax (I pay a boat load of interests every month, which effectively have a -30% tax since they are completely deductible, even from earned income not just cap gains).
Oh: A source of great injustice in Sweden is that renters (predominantly low income earners) don't deduct interest rate expenses of those who own property (their landlords) while those who own their property deduct a crapload of interest, especially since we have a weird housing system with lots of huge long-term loans (100y mortgages are norm). Basically anyone who owns a flat or house deducts $5-25k a year of interest rates from their income tax. Essentially it's a huge transfer of money from renters to owners. A very regressive tax if you ask me.
I've cross checked the OECD numbers many times, and they are very precise. Any discrepancy tend to be year to year changes in deductions etc.
> Oh: A source of great injustice in Sweden is that renters (predominantly low income earners) don't deduct interest rate expenses of those who own property (their landlords) while those who own their property deduct a crapload of interest
This is interesting. Norway has that for a long time as well, and I believe the US allows it, but very few other countries in the world does and didn't realise Sweden also allowed it. Norway allows deductions of all debt interest, which makes it one of the most extreme examples of this, and is one of the big confounding factors when people look at tax rates without taking into account that e.g. even credit card interest paid gives a deduction towards taxable income...
In Norway at least I believe it's largely been seen as an incentive to reward home ownership, and making the average worker a home owner has been as one of the big goals of the labour movement, to the extent that any growth in proportion of population renting has come to be seen as a sign of collective failure.
It's pretty obviously a failure.
https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_so...
Our defense and war spending is very much a black hole. I'm sorry if I fight being taxed to death in regards to this. Not all of us have a tiny military like your country does.
Worse, federal taxes are just one piece of the pie for Americans. We're usually taxed heavily on the local level with property taxes, state taxes, etc. With those taxes we can certainly see providing value. What the federal government takes goes into a budgetary black box that pays for some pretty odious things. Currently my taxes pay for NASA to stop studying climate change and for the White House family to constantly vacation and live in places other than DC. Things like medicare and social security are taxed separately anyway. So I can see those as individual items and largely don't have an issue with them.
I think a lot of anti-tax attitudes here in the US aren't ignorance, but a protest against a corrupt system wasting money and using it for a net negative for us and the world (Iraq conflict, endless drone strikes, sabre-rattling with China, etc).
There's a moral position for the left to criticize taxation. Imagine if your country spent the kinds of money we did on defense. Would you be so happy with it?
I think US defense (which is really very little defense and mostly power projection) is completely bizarre. A reasonable level would be perhaps 3% GDP which would still be huge. The Swedish military is tiny, and by GDP it's a joke (around 1%). We should be spending at least 2% and I think we will pretty soon, the way things are going now.
> I'm sorry if I fight being taxed to death in regards to this.
But are you fighting taxes or arguing that money is being spent on the wrong things? I.e. are you saying "I oppose high taxes because they just get spent on X!" whereas in most countries you'd see people say "Let's spend less of the tax money on X".
> Currently my taxes pay for NASA to stop studying climate change and for the White House family to constantly vacation and live in places other than DC.
I think a lot (most western?) countries have funding for space exploration, climate research etc. I certainly pay for ESA research just like you'd pay for NASA, and we obviously have climate research etc. I think the cost of the US presidency seems like a blank check if the president himself is able to choose where to go/stay/live.
I also pay for the living and security expenses of a prime minister. They obviously are nothing like the US expenses of the same kind - but that's because I'd vote to change that if it was too high. Now that I'm thinking about it, my (official, ceremonial) head of state is the King. So I pay for a King to live in a castle!. I don't mind doing that though. The costs are "reasonable". Any excess is immediately causing headlines and calling for a republic...
> Worse, federal taxes are just one piece of the pie for Americans.
That's not unique to the US. Obviously in every single country of the world you have administrative divisions on various levels (cantons, counties, regions, states, ...) and often several of these administrative divisions have taxation. In Sweden i'm income taxed on 3 levels (local, regionl, national). But it's deducted in one place from my paycheck so I don't notice much. The state level taxes are also used to pay our expensive EU membership which effectively makes that a fourth level, a kind of federal spending - so my tax money is for example subsidizing farmers in eastern europe.
> I think a lot of anti-tax attitudes here in the US aren't ignorance, but a protest against a corrupt system wasting money
I realize that. But it seems like an indirect and inefficient way of protesting wars and corruption! Don't starve government, change it. Vote. If voting doesn't change anything then change that (i.e. change first-past-the-post elections, gerrymandering and all those other defects - until voting actually changes things). Especially since in the US, budget cuts tend to kill things like meals on wheels before it kills foreign wars.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_tax_reven...
Long answer (includes speculation). One primary function of the nation state is to provide its people security. I think most European societies include healthcare and unemployment in their concept of security. This means that spending on these things is seen (by a majority) as a primary function of the state in European cultures. Whereas in US culture these things are seen by a majority as outside the primary scope of the nation state's role in providing security to its population. (NB the UK falls somewhere in between and these things are in flux all the time.)
Belgium is the extreme - at 55.3% it's the highest in the OECD. Three European countries (UK, Ireland, Switzerland) come in below the US on this metric.
The numbers are basically all over the place, and depends more on overall culture and priorities than things like healthcare etc. by themselves.
In terms of what is directly visible to the employee, US is at 25.6% of gross wages (note the difference - these numbers can not be directly compared to the ones above, as the ones above are percentages of total labour cost including the employer contributions) compared to 23.4% for the UK, 36.1% for Denmark (Denmark is one of very few countries that don't "hide" hardly any of labour costs as part of employer social security contributions), or 28.4% for Norway, 24.7% for Sweden or 42% for Belgium. So still all over the place.
It also depends greatly on how much you earn, and how progressive your specific country's tax system is.
The only thing that's clear is that the US does not stand out as being nearly as much of a low tax country as people sometimes like to think. E.g. the OECD average (which to be fair is pulled down by several non-European countries) of employee contributions is 25.5%, so slightly below the US.
[1] http://www.keepeek.com/Digital-Asset-Management/oecd/taxatio...
[2] http://www.keepeek.com/Digital-Asset-Management/oecd/taxatio...
Nb income based taxes are only the start anyway property tax aka Council tax is quite a burden on lower income households in the UK.
The median salary in the UK in 2015 was roughly 27,500 GBP.
Let's do the numbers as percent of wages first. This won't match perfectly with the OECD numbers as I haven't matched up the personal allowance rates etc. by tax year.
But currently, 27,500 means your taxable income is 16,500 (after subtracting the personal allowance). On this you'd pay 20% income tax, or 3,300 and 8.5% employee national insurance for roughly 2,332. Your total tax would be 28.5% of your taxable income, but only 20.5% of income once you factor your personal allowance back in.
If w're looking at employer contributions, I don't know exactly what they stand at this moment, but it used to be 12.5% of gross salary. If we adjust the numbers above, that means 3437.5 in employer contributions for a total tax wedge of ~29.3%. Note that I have not taken into account the lower earnings threshold etc. for employer national insurance contributions, which I believe you should, so I think the total would actually be lower, but even so even when applying it to the full amount you actually still end up below the OECD figure.
Both of the above excludes council tax. Council tax is of course tricky because it depends on the property you live in and your council, and whether or not you live in the property alone.
Now in my property that adds 1600/year for a family. Though you wouldn't live here if you were a single earner family on an 27.5k salary, that'd drive the total tax wedge up to 34.5%. As a single, you'd get half off, and end up with a total tax wedge of 31.9%. Looking at the gross wage percentages, it'd bring taxes to 26.3% (couple) or 23.4% (single) respectively.
http://www.pbs.org/newshour/rundown/health-costs-how-the-us-...
I've literally never seen a cadillac over here, except for a few US left-hand-drive imports.
And yes, an Escalade looks almost comical on UK roads, it's just too big by every measure.
Cadillac is produced by General Motors.
On my most recent trip to Zurich I saw cadillacs and chevy camaros, etc., out driving around.
They are crap cars but I think there's some counter-cultural cache that they possess in a place like that.
It was the fact they showed the awful plasticy dashboard. It looked so cheap and nasty.
I was quoted a salary of $ 30k for a deep learning position. Now that is third world.
In the EU you don't pay as much for the same services as in the US, especially healthcare.
I'm not sure about Japan but it could be the same thing there.
https://www.theatlantic.com/business/archive/2015/01/suburbs...
I'll accept "having more than one child" but not "having a bigger TV".
On the limited upside, the wages are not all there is to working for a Japanese megacorp. In addition to the thick wad of non-taxable allowances, there are also non-monetary benefits. As patio11 notes [1], “Most people want to become wealthy so they can consume social status. Japanese employers believe this is inefficient, and simply award social status directly.”
[1] http://www.kalzumeus.com/2014/11/07/doing-business-in-japan/
1) In the U.S. you can work for years at a company before getting more than 1 or 2 weeks paid vacation.
2) Most Americans don't travel much outside their own state or region, let alone country. Most don't even own passports.
3) Even when not on the job, either at night, on the weekends, or on vacation, Americans tend to stay attached to their job via email or phone.
It's true that American salaries can be a lot higher than European ones, especially for developers. But Americans also typically do a lot of side jobs or have households with 2 or more full-time jobs per family, 2 or more cars per family. So one has to ask if it is all worth it?
If American's were enabled to take the time to see the world a bit more they would be less reliant on media stereotypes to understand it and might question their lot a bit more often but perhaps that's not in the interests of the people who run America.
Americans could use a little less prejudice in their lives.
I can't help but think that passport ownership is one of the fundamental cultural divides in the US. It's difficult to understand the value of travelling abroad if you've never experienced it and don't know many people who have.
Geography is no excuse - Australians are prolific international travellers, despite the size of their continent and their oceanic isolation. Spending a year abroad is the norm for young Aussies, but it's still regarded as a rare privilege for young Americans.
True but America is a wide enough place that you can have most of that without leaving the continental USA.
Growing up in Podunk, USA makes people from Big City, USA feel like foreigners (and vice versa). I'm not saying don't go outside the USA (quite the contrary!) but there's quite a bit you can do and see here without a passport.
> I can't help but think that passport ownership is one of the fundamental cultural divides in the US. It's difficult to understand the value of travelling abroad if you've never experienced it and don't know many people who have.
Very true and I don't know anyone that's traveled extensively that doesn't comment on it being a positive experience in hindsight (aside from business travelers complaining about going back to the same places they don't particular like month after month).
You absolutely, 100% can't. America has no end of wonderful places to visit, but there are so many parts of the experience of foreign travel that aren't remotely replicated in domestic travel.
Being on the wrong side of a language barrier is profoundly dislocating. A domestic visitor to Big City USA won't find themselves asking for directions in pantomime, they won't have to point at something on a menu and hope for the best, they won't walk into a supermarket and realise that they can't tell shampoo from conditioner. There's a deep sense of vulnerability when you can't communicate effectively, a sense of marginalisation and remoteness.
American tourists have a reputation for assuming that everyone accepts greenbacks. It's a profound experience to realise that the money in your wallet is absolutely worthless to the people around you, that the pieces of paper you sweated to earn might as well be monopoly money to anyone outside of a Bureau de Change. The simple experience of having a pocketful of unfamiliar coins has a lasting effect on your understanding of the nature of money.
Except that most don't make those trips around their own country.
Other than the currency part, we've got that in the US...
Except for New Orleans.
Many, many Americans travel extensively or are children of immigrant parents who travel to their home country often.
If you live in the MidWest where most Americans live, then your report would really surprise me.
No we don't.
I have 5 weeks of holiday a year, total. I take 2 weeks around christmas. Maybe a week somewhere in Spring, that leaves 2 weeks summer holidays. Plus, you want to keep a few spare days in case you need an incidental day off for whatever reason.
Most people only get 5 weeks of holiday a year total (4 weeks is the legal minimum) and they usually spread out those days over the year. If you can travel the world for 6 weeks every summer then you have an above-average number of free days and probably an above-average income to be able to afford that much travel.
We do get vacation money (8% of your gross salary, usually paid in may) but that's not nearly enough for 6 weeks of travel unless you saved up a lot.
You say people "only" get 5 weeks of holiday, but that only supports my main point about the huge difference between that and what Americans are used to.
I don't know anyone who works more than 40 hours a week, in tech or elsewhere. Those of us in the corporate world have 15-25 days of paid time off (not including holidays, to be clear), based on time with a company. As an employee, I would love to see this increase. As an employer, I would see it as a recruiting opportunity that many job candidates would value.
Most people I know own a home, and others rent houses or apartments at relatively low cost. And probably significantly larger and nicer than European expectations. And they all have plenty to show for their hard work, though much of it may not be enriching our lives substantially.
On the healthcare side, maternity leave is usually only 30 days (not very much, I know, but much better than none). While our healthcare is not "free", I feel like the higher compensation, lower taxes, and lower cost of living in the area enables my family to afford paying higher premiums for better insurance.
Having said that, I still feel anxiety about the future. Losing my job doesn't just mean I lose my income, I also lose my health insurance coverage. I'm not sure how quickly I could switch to an ACA plan with an income-based discount, and I wouldn't be able to afford it otherwise if I had no job.
Unfortunately, I don't think switching to a single payer system alone will address the deep issues in the US healthcare system. People are quick to blame the insurers, but much of the blame also needs to be placed on the providers who charge astronomical fees. The source of the problem, in my opinion, is lack of transparency in pricing resulting from the presence of a middleman (the insurer) and the inability to shop around for many medical services that could be commoditized.
So while I agree that in many ways Europeans have it better (but not without cost in terms of lower wages, higher cost of living, or high unemployment), I don't think painting such a dismal view of the US is warranted. Based on my experiences traveling in Central and South America, a comparison to the third-world, even if limited to work/life balance, is highly inaccurate.
Disclaimer: others' experiences will absolutely vary.
of course it is. calling the US as a whole, a third world country is absurd to anyone who has actually been to one.
that's not even taking into account that the US is what literally defines what a first-world country is, warts and all.
I live in the US and know more than one person working a 6/6 cycle (6 month of work, 6 month of rest and travel) which they would never be able to do with old, rigid work arrangement.
I think for skilled workers with skills in demand flexible work options can offer huge benefits. For cashiers and conveyor workers it's the other way.
I also have several friends who work 3 day a week (24 hrs) by choice so they have more free time.
And remember, a lot of people came to the cities in the first place because the work there was favorable compared to farm work. The outcome of your factory work was generally more predictable as well.
All this to say that, in light of historical perspective:
1) The notion of calling the United States of today "third world" strikes me as extremely hyperbolic. The average human in 2017 (at least in the OECD) probably works way less than the average worker at any point in human history, and probably lives better.
2) The notion of "working to excess" is probably overstated.
[0]: https://en.wikipedia.org/wiki/Pressed_Steel_Car_strike_of_19...
This, I believe, is a misconception. There's only so much farm work and population increases means work had to be found elsewhere. On top of automation lowering the number of farm hands one needed, and worse, a lot of that work being temporary seasonal work that paid very little. The Grapes of Wrath and The Jungle show the brutality of this period from both urban and rural perspectives.
A lot of urban dwellers in that period would have been fine with farm work. If anything, it was safer and healthier than factory work.
I don't have a source handy, but I remember reading that for farmers who didn't own their land, it was really difficult when bad weather ruined the crop and you couldn't make rent as a result, not to mention the fact that you didn't have food that season either. That's what I was referring to.