If you're a fantastic dev (or whatever), why would you work here when other companies will pay you a lot more?
It's crazy that someone is willing to pay me $100k / year, and I'm super grateful for that. Really.
However, that doesn't mean that $100k / year (or whatever the minimum I'd be excited about) is the market rate. If ten other companies would pay me $300k, then I should go work there, right?
There's no speed limit. Just because someone is willing to pay you way more than you ever dreamed doesn't mean you should shun any more than that. Do your best and go to where you're valued the most.
I get offers from companies, but if the job/product is boring, a higher salary does not justify the switch for me.
I don't disagree with you, I tend to gravitate towards a high pay :) We will soon have a salary formula refactor too, but I think the raise might be a rounding error compared to remote pays.
There's no free lunch. Instead of giving the employee the money, much of it is handed directly over to the Government (then a bunch more directly from personal income taxes).
If you choose to forgo those things while in the US, there is a monetary advantage. If you choose to buy them yourself, you will probably find your final income level to be very close to the same as in Europe.
If I'm making six figures as a dev in the US, I probably have fairly generous benefits, including healthcare, vacation, parental leave, retirement plan contributions, disability insurance, etc. And I'm probably paying less in overall taxes than most Europeans (though it really depends).
Of course, I don't have the safety net things that lower-income Europeans do, but I almost certainly don't need them.
So what would the equivalent person in the EU making half as much be getting from their government that I'm not getting from mine?
(Btw, this isn't an argument for the US approach being better overall, but just which system is better for the selfish high-income professional)
But my larger point stands: the average cost per worker for those benefits is only maybe 10% higher than the cost in the US for our reduced benefits. So why are salaries 50% lower?
in US 6 weeks of paid vacation is still rare in professionals. 3 is common. So you're using 3-6 while in europe there is guaranteed 6. This is apples and oranges.
Besides: this is in addition to the sick time. Sick time is paid and you don't use vacation time for that in europe. How is that in US? Can you get additional 4 weeks paid sick time? Can you get 8?
Then in addition you have this perks in US as long as you work as professional in top companies. While the real difference in terms of health care is after this work. Last I check, average age at FANG is below 30 yrs in USA! Wow! So imagine you're 45, you dont work at google/etc: then at low impact events or maybe even medium events if you dont have family healthcare is comparable (your savings cover it). But at high cost/high impact situations or medium ones if you have full family, you're not covered (add to this highest in the western world cost of healthcare in US). While it's state funded in europe also at the high cost level (read cancer therapies and all the things like). This is big difference for last 40 years of live.
And then you have mentioned maternity: that alone (and most of people have families in any place of world) from family perspective is a huge difference financially AND child development.
p.s. and there is cost of living. in US alone you can easily have it in SanFran at 1.77x of US average - you can imagine how it scale to the other parts of world? Sauce: https://www.wolframalpha.com/input/?i=cost+of+living+index+S...
There are simply much more well funded companies in the US, desperate to find good candidates, thus driving up salaries.
What's also interesting to consider is that developers here seems to be fine with earning close to non tech jobs employees. You can do really well in many industry sectors. As a bus driver in Germany you can earn $31,435 which already buys you an ok level of living.
You say that now while everything is up. Imagine getting run over by a car and not being able to work anymore, i bet you would be better off in a european country in that case, but of course it makes no sense to consider a worst case scenario like that.
However, many things are not great for high income people. Let's say you earn 6k EUR/month in Germany, that leaves you with 3.4k net (if you quit Church tax). A considerable amount (500 EUR) goes to state pension which everyone expects will be almost nothing when our generation reaches that age and the healthcare is pretty basic, but you could change to private insurance and save some money as long as you are young.
I believe competition between the Tech giants is just so much bigger in the US, that everyone in their vicinity has to match those crazy salaries to even have a chance. That is not really the case in Europe. Spotify, Soundcloud, Zalando etc. all lie in the 50-90k EUR range i would assume. I don't really know what can be earned at Facebook/Google/MSFT in Europe though.
> there's no subjectivity in this formula
Yes, there isn't. Because subjectivity in favour of someone, is to the detriment of another employee (because the budget is limited). It just usually happens to be the case that the employers somehow "magically forget" to communicate this to the employees. So you are basically kept in the dark in two different respects: 1st regarding how your skills compare to others 2nd regarding how your salary compares to others
Basically this is just a spineless, sneaky tactic that employers like to use. Because the less information you have, the lower the chances that you can make a well informed decision about your job change.
This is not how salaries work. Companies don't have a pool of $x for y employees. They try to hire every employee at as low a cost as possible. If you accept a salary at $10,000 below what they were willing to pay for that role, it's not like you can rest easy knowing that the other employees will get that money. That $10k is now additional profit [1].
Anyway, you can think this system is unfair and that we should have another one, but this is the one we have now. So you can work at below market rates for companies like Buffer, or you can go get a higher salary at companies that don't do this.
1. This seems like an argument in favor of more worker-owned companies, which I think are fantastic. I think we should have a lot more of them, and I'd like to better understand why we don't.
My view: most workers just want a paycheck and at the end of the work day leave work at work. That isn't compatible with running a company. Besides, even in worker-owned companies an implicit hierarchy emerges and gains its own inertia until eventually "ownership" is technically true but doesn't mean much.
Member-owned cooperatives are interesting for some of the same reasons, and seem to work well in many cases.
Just wondering why we don't have more of these structures.
It's worth trying, though.
And they do this calculation in every quarter, adjusting it if necessary.
I don't even understand how can you think it works differently???
Hiring is supply / demand like anything else, and companies are trying to minimize their labor expenses and maximize profit, not spend a certain fixes amount (and no less!) on labor.
Don't put words in my mouth, because that's sg that only YOU said.
And, no, it's not exaggeration. It's common sense.