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Comment by devilmoon | Hacker News Reader

Question from someone not living in the US:

How come you guys have such high salaries compared to ROW? Is the cost of life that much higher than other countries, or is your income simply taxed less / companies have generally more money to spend on employees?

I am currently working in one of the highest paying (if not the highest) consultancy firms in my country, and my salary is probably lower than your minimum wage. It's actually something that pisses me off more than it should when I think about it.

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Other western governments take care of healthcare costs, unemployment benefits, maternity/paternity leave, holidays, education costs and retirement. For example, in France or Germany, tuition fees for your kids are minimal while it's a fortune in the US. Or the governments in Europe mandate companies to pay 4 or 5 weeks of holidays. If an employee in the US wants to take 5 weeks, he/she has to pay 3 weeks out of their own pocket.

I’ve been in the US for 10+ years, 4 or 5 jobs and have never had less than 3 weeks. Last two jobs have been 4 weeks right from the start.

If you are working in SV for one of the MAFANGs or tech unicorns, you will have: healthcare covered by employer, generous severance package, 99 weeks unemployment benefits from California govt, parental leaves, 401k benefits. You will not have great public education in most of SV, but the salary differential will more than make up for the cost of private schools.

If you are upper middle class or higher in the US (which a SV software engineer most certainly is), life here is better than most other places in the world.

>If you are upper middle class or higher in the US...life here is better than most other places in the world

Please change to: your purchasing power is better than most places in the world.

Do not confuse purchasing power with better life. 13% of Americans are on anti-depressants. I know many "successful" people in my very affluent suburb of a major US city, who have an addiction problem ( prescription drugs, mostly).

Add growing social isolation, caused by constant uprooting (moving from place to place to advance one's career).

As they say, "all that glitters is not gold"

If you want to quote stats about anti-depressants, please do so for other competing places as well. I do not have those stats, but stats about suicide rate[1] show that other supposedly better places with free healthcare, social bonds and no guns (Sweden, Finland, Belgium, Japan) have higher suicide rates than the US.

Wading into social indicators is a tricky business without the full context of a place, so I will speak only about SV - great climate, progressive policies like enthusiastic adoption of Obamacare, unemployment benefits, good employers provide health/401k/parental leave benefits, non-racist environment (though certainly classist) etc.

Finally, my point was about "a software engineer in SV working at MAFANG or unicorns", who should not have to constantly uproot. A new job should be across the street for such a person.

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

1. Suicides rates are influenced by other factors, such as weather (Finland, etc), societal norms (Japan), etc.

2. The US would move further up the suicide table if you classify deaths from overdosing as suicides.

3. If the US population had not had such an easy access to "happy pills" (mood enhancers), the suicide rate would have been higher.

>A new job should be across the street for such a person

There are a lot of people coming and leaving S.V. on any single day. This has been discussed many times on HN.

If you are happy in S.V., good for you, but don't project the mini-bubble you live onto the whole country.

> There are a lot of people coming and leaving S.V. on any single day.

And yet, bay area population went from 7.15M in 2010 to 7.75M in 2017 [1].

> ... don't project the mini-bubble you live ...

The thread is literally asking for personal anecdotes (Ask HN). Why should one not post about their positive experiences with SV in that case?

[1] https://en.wikipedia.org/wiki/San_Francisco_Bay_Area#Demogra...

Competition, and value. At the height of Microsoft's days, the average employee generated something like $2m in value.

Take a dozen companies like that, where the income of the company divided by the number of employees is still in the millions, and have them fight for the best talent.

Lately, tech is especially special for this because a good employee is so much more valuable than a bad one. Some developers honestly produce negative value, while a solid team of good people can pay their own salaries many times over.

There's still the question of FAANG branches in other parts of the world not paying nearly as much as they do in the US, which is bullshit to me - if an employee generates value while working in the US, it does so outside of it as well. Companies this big shouldn't lower their compensation to match the country they operate in, I feel like it's an insult to employees who simply were born/decided to live in a different country

But 'value contributed' is only a part of the equation that goes into how salaries are calculated.

It's a very small component actually. "Value contributed over nominal employee" might be a better way to think about it. Compensation is set almost exclusively on "What must we pay you to keep you from leaving and doing the same thing for the company that is the same distance from where you chose to live. If there ISN'T another company, its vastly less. If the thing you do is something that everyone can do, it's vastly less.

Yes, but they do it because they can. Local talent in those places accepts lower salaries, so they're still getting good people.

There are significant barriers to moving (for the employee) and hiring remotely (for employers) which means the salaries don't equalize across regions very well. Employers are mostly competing with other local employers, so there's not much pressure to increase compensation and salaries change slowly.

The end reason is always market dynamics. Certain people can have certain rationalizations but the market doesn't lie. Note that it's not a perfect market because of things like immigration control and artificial friction via the broken IMO interview process.

There are many people in China/India who are smarter and harder working and more driven than many people at FANG headquarters. However they're competing with each other in a highly competitive area while in the US there is less competition because of moats dug to create better quality of life. Like how elevators beep when there are too many people to prevent crowding.

So the end reason is very very similar to why any sort of inequality exists at all, just in a more extreme and jarring form because the field in question is supposed to be THE meritocratic field. (Which it is in a way... But most of that disappears in large companies. And in the truly free economic playing ground it's not about smarts but about money and smarts)

Maybe not for the 300-500k/year region, but for the 80-200k/year region: At least for software/engineering roles in big (non banking) companies a salary in the 90 - 120k region is quite possible, for product/sales people with all bonuses probably more. I got around 82k (plus variable bonus and retirement stuff) after 2.5years. 3rd job after my graduation. 6th or 7th (relevant) job all in all.

Considering how much lower the cost for living (compared to eg. SF is) and how much other stuff is covered (insurance, retirement, general infrastructure stuff), the divide is not that big. But it's still there (and pisses me off, too). The company I worked for payed considerably higher salaries for otherwise equal roles located in SF (and constantly complained about the quality they got for their money in SF). That was also often a reason quoted for lower yearly bonuses for the whole company, which again pissed everyone off..

Oh, you don't need to convince me. I used to be an Amazon Toronto employee!

Cost of living in the US gets ridiculous. Healthcare is expensive and gets more expensive the more you make. As much as I make I'm probably one bad accident away from being wiped out financially

When you add a family, child care is super expensive; think $350/week for two kids

Not to say we aren't hyper-consuming gluttons, but I think that's only about one third of the picture

> Healthcare is expensive and gets more expensive the more you make

Huh? Are you self employed? I don't understand this.

The company I work for has what seems to be progressive deductibles. The less you make the lower your deductible will be. For some people here the only choice is a high deductible plan

The hospitals regularly write off bills for lower income individuals, while better paid patients are stuck with the insurance-inflated bill if they aren't covered.

Don’t forget the govt takes over 40 percent when your making upper class to higher level salaries especially if your single.

That 300k is really only 180k annually. So the govt takes the salary of a lower level upper class person for taxes.

When u make the jump from 50k to a higher tax bracket, taxes will shock u!

In Europe you often only get ~50-55% net and that's often from <$100k salary even at hot tech companies. But in many jurisdictions you then won't have any healthcare or education cost plus lower living cost overall. Pension is also taken care of in many countries. That probably still leaves you worse off than in the US but leads to a bit more even distribution of salaries across the population.

> you then won't have any healthcare or education costs

70 to 80% of healthcare plans are covered by US employers though. So maybe we should compare total comp plus benefits? Health plans aren't total costs, though, because cost sharing and care is expensive... But that means adding cost of living adjustments. But if you are using a chunk of your salary to plan for retirement in a lower COL area, maybe those aren't even fair.

An apples to apples comparison is incredibly difficult.

https://www.peoplekeep.com/blog/what-percent-of-health-insur...

Wat? My highest overall tax percentage was 32% when I made 300k as a single person.

This seems to be a common misconception, but taxes in the EU are way higher than in the US

That 40% includes federal, state, social security and other taxes taken out.

You seem to be confusing marginal tax rate with effective tax rate.

People making 300k in California will pay between 33% and 39% effective tax rate (depending on marital status), including State, Federal, and FICA.

And that’s without simple tax sheltering techniques like pre-tax deduction for health care, contributing to a 401k, and deducting mortgage interest.

https://smartasset.com/taxes/california-tax-calculator

Actually, that’s a terrible link. Before Trump’s tax increase targeting CA/NY, the SALT itemized deduction lowers the effective tax rate by a further 3% or so, and that calculator fails to include it.

In the UK we are taxed at 40% for incomes above, I think, £45k.

Then above £150k, I believe it's taxed at 45%

Plus National Insurance which adds another 2%. But the average salary in the UK is around £30-35k so it's a problem mostly tech and financial workers have.

$350 for two kids? I pay $350 a week for one kid to go to daycare. And that's in New Hampshire not in a city like Boston of SF.

And that's not counting food, clothing, and other necessary child expenses.

Childcare can be way more expensive in some parts of the US - $500+ a week for 2 kids in the Portland, OR area.

There is a geographic disparity in how tech workers are valued. Might consider working remote for a US company that'll bring your wage up above what your local tech economy will provide for.

As a sibling comment points out, health insurance and child care consume quite a bit of a wage in the US (our employer portion is $20k/year alone for a family of four; childcare is easily $1k/per child/per month for 2 days a week of care). My wife is giving birth tomorrow to our second child, and we're prepared for a bill anywhere between $5k-10k all-in, even with a quality insurance plan at my company.

I've thought about working remote but I've heard that unless the company is geared towards making the playing field even for remote/onsite workers you'll be having an hard time getting noticed/pulled into projects.

Might be something I'll look into if nothing I can find in the EU satisfies me.

Don't give up! There are opportunities out there. Contact companies you're interested in who don't have open positions listed and communicate your interest. Despite what the echo chamber will tell you, it's still all about networking and who you know that gets you the job, rarely merit.

> [You]Might consider working remote for a US company that'll bring your wage up...

How do you even get to do that ? Most of the time companies that advertise 'remote' mean 'we need a remote worker who resides in the US'

To your question: "How do you even get to do that?" You ask. My current enterprise job was not offered as remote. It was advertised as an in-office job. When the job was offered to me, I asked if I could work remote. Due to how hard hiring is for my role, I was told it'd be no problem (and I had other offers; lesson for another thread, "always negotiate from a position of power").

The below resources come to mind as places to start (no affiliation).

https://github.com/lukasz-madon/awesome-remote-job

https://weworkremotely.com/

https://whereverjobs.com

Also, an ongoing salary survey document for your use in ensuring you're not getting undervalued: https://docs.google.com/spreadsheets/d/1a1Df6dg2Pby1UoNlZU2l...

great resources. I'll check them out.

Please let me know if you have a positive outcome. Happy to have helped.

I’ve worked at many US companies where we had remote workers in other countries. In fact I’d say it was more common than not. Typically they were employees of the local country or region office though from a legal perspective so I doubt they were able to pull a “domestic” salary.

The large software groups i.e. FAANG have very high margins and are very profitable. This means they can afford to pay their staff very well.

I live in the UK and the cost of living in London is roughly the same as NYC but salaries are lower for the same job.

Certain companies and countries (Luxembourg, Switzerland, UAE) have structural advantages which means staff get paid more. It is not always merit based. So you will have some very talented people who are are in the 'wrong' region or industry and get paid materially less than they could be.

What really pisses me off about FAANG branches in EU is that they will pay you way less than what they're paying for the same role in the US, which feels like an insult. London I believe is the best market in the EU for cost of living/salary tech-wise - luxembourg, switzerland, UAE have a cost of living which is off the charts, i.e. yes in switzerland you can get 5k€/mo for an entry level job but having breakfast outside will probably cost you in the 10€-20€ range, which is madness compared to the rest of EU

It's definitely not fair to you that you get paid less because you were born in a different country but that's just how it works. The rest of the world simply doesn't have the demand for tech talent that the US does.

Imagining a world where all the candidates from everywhere could move to SF, etc for their ideal job, do you think wages would rise or fall? Hint: They'd fall. A free market economy is left no other choice than to treat the job "environment" as a "job market", complete with the dynamics of supply and demand.

It's frustrating right.

Stating the obvious: the world isn't fair. If you're in software, the US is the place to be. Haven't said that it's not always easy.

I almost got an investment job in the UAE with a SWF. They had a change of strategy which I didn't fit into. This was after 7 stages and me flying out there for two and a half days of back to back interviews. Comp included accommodation and a tax-free salary in the $200k range....

Netflix and Amazon's margins aren't that great. How are they able to afford these salaries?

They are measuring total compensation. In European countries, you have five weeks of paid vacation and money that is put into your retirement fund in addition to your salary. Plus sick days. That is worth 10-24 % more than your base monthly salary.

The spread of US developer salaries appear to be insanely high though. Median is "only" 70k according to this site: https://www.payscale.com/research/US/Job=Software_Developer/...

Where are you pulling the five weeks figure from? It's more like 20ish days, after that if your employer is ok with it you can "borrow" vacation and pay it back by not generating more vacation days while you work or pay when you quit your job.

Retirement funds, I don't know about the rest of EU, but in my country are basically a scam - here you are forced to pay 10% of your gross salary per month into the fund and you can start getting pension after 35yrs of work (provided you are older than 70yo), that means I'm paying money I will NEVER get back, since median age is going up and employement down, no one will be around to pay my pension like I'm paying my parents' with my salary.

Sick days are on the company only for the first 3 days, after that the healthcare system pays you (80% of your rate, iirc)

I guess it varies by country: https://en.wikipedia.org/wiki/List_of_minimum_annual_leave_b...

Where are you from? In my country a company would pay 100% of the salary for 12 months and then 80% for another 12 months in case of sickness.

IT, you get 100% for the first three days covered by the company, 50% from the 4th day till the 20th and 66,66% from the 21st to the 180th day covered by healthcare - incidentally 180 days is the maximum number you can be on sick leave in a year

Even taking that into account, the non-US salaries are still 50% lower.

> It's actually something that pisses me off more than it should when I think about it.

1. all that glitters is not gold.

2. what life style does your salary afford you?

I live in the greater Seattle Area. Engineering base salaries are ~130-160k range. Total comp, add $60-100k on top of that (bonus, +equity). SOme make more, some make less. All of us at that level live a pretty good lifestyle, but no one is really balling out.

Cost of living has skyrocketed to match the inflated salaries. Businesses and government are working overtime to extract that money out of workers pockets.

2. I can basically only pay for rent/bills, food and maybe a train ticket back home once a month to see family/friends, I'd say that's a pretty shitty life style - I am paying too much rent atm but even if I was able to shave a couple hundred euros off that it certainly wouldn't make me rich.

You work at one of the highest paying firms in your locale and you are slightly above making ends meet?

Do you at least love what you do (for a living?)

Not really - consulting isn't my line of work it seems. I am lucky in a way because I got into an handpicked team that actually writes code and explores new tech, so I'm not wasting my time entirely here, but still, I am considering going back to uni to specialise and hopefully move out of the country for an higher salary as a more specialised worker rather than jack of all trades SE

I sincerely wish you luck in that.

On paper I make 90k at a startup.. I'm a partner and we're having cashflow issues so -- I haven't been paid in a month and a half... and I don't think we'll be rolling out the benefits we were planning to, and I think we'll be moving away from 'employees to contractors'..so we don't have to worry about benefits till cashflow is fixed, as for costs:

Healthcare for myself alone is going to be about $350 a month, rent for an average condo for a family of 3 is : 1440 here in utah. Healthcare for the rest of the family will be an extra $600...

That's $2500 in costs just for healthcare and rent. Food is expensive and probably costs us about $1k a month as well, Internet is $75 but it's google fiber :) ...

That said IF you work in software -- and you speak damn good english and really sell yourself, there's no reason you can't earn at least 30-40/hour as a dev, I worked on an all remote team and we had a couple employees from mexico/south america and they were paid the same as everyone else.

I'd highly recommend looking for employment outside your country on a remote team. Working from home is also pretty nice, I save a ton on commute time.

I also need to invest for my own retirement, my wife is a homemaker and takes care of the kids, and I need to make sure somehow we can afford to pay up to 200k per kid for college maybe more by the time 2036 comes along... We'd also like to buy a house someday, and I like tech toys...

If you decline the job with your current company in your region, what is your best alternative? What is the employer's best alternative? That determines the limits to what you will accept and that they will offer. (Economists call this BATNA - best alternative to a negotiated agreement)

Cost of living sets a basic expectation, but janitors in silicon valley don't earn the high wages software engineers do there.

The expected value a company can derive from the contributions of an average employee also differ - Google has the market and infrastructure to profiy more per engineer hour than a typical small business.

Mostly cost of living. The locations where these jobs are tend to be very expensive to live (which is why the location part of this question will be interesting).

what would rent+bills cost in SF, for example?

$1.5-2k will get you a single room in an apartment, a studio will run you at least $2.5k. Forget it if you have a family

Rent + bills cost around $3700 for me for a 1 bedroom apartment a 15 minute walk from work but I also get paid $147k salary. I make the maximum contribution to my 401k every month, so after rent, payroll, retirement, health insurance, and taxes I take home around $3500 a month.

This doesn't include my stock bonus, free breakfast lunch an dinner which I do take advantage of, and other small perks that add up to thousands a year.

That's crazy, my MORTGAGE is £455 a month, my factors are ~£160, then the rest of the bills is about ~£200-£300ish

So my living costs each month is around £900 ($1200)

I have a large apartment, living room is about 600sq feet and I have 2 big bedrooms, 2 bathrooms, gated entrace to the complex, a handy man, a concierge, my own private parking space as I'm in a big city...

$3700 a month is ludicrous. I'd want to live in a castle for that.

man where the fuck do you live to get all of that for only 900£? I pay 750€ish per month rent+bills for a bedroom in a shared apartment

I live in Scotland (Glasgow). THe place was £170k to buy and needed about £40k ish work done to it.

The £40k came out of savings, £70k deposit and you end with a really cheap fixed mortgage on £100k that comes to £445 a month, in fact it's low enough that I overpay it some months by double to get the mortgage paid off quicker.

Glasgow is tiny compared to NYC, SF, LON, etc. In an equivalent sized city in the U.S. you could easily find a house for $200k.

it's probably not size but rather the "hotness" of the city, i.e. afaik Rome is the biggest city in Italy by far (maybe the biggest in EU as far as actual size is concerned) but cost of living is quite low compared to other EU capitals and even other cities in IT, Milan i.e.

Unless you bought a long time ago, I'm going to take a guess you're not in London. You could expect to pay £900 for a room (maybe including, maybe excluding bills) in a flatshare in a decent(ish)/popular location.

>$3700 a month is ludicrous. I'd want to live in a castle for that.

I'm the person you are responding to and I agree, but this is what I get if I don't want to commute.

I work in Civil Engineering for a municipality in the bay area. We are having an incredibly difficult time getting any qualified applicants because it is not enjoyable to live in the bay area on the salary we offer compared to the cost of living. I'm pretty sure the salary for tech workers is not to compensate for cost of living, especially when I look at what my parents could afford on a blue collar salary in the North Bay when I was growing up. It is the wages paid that are raising the cost of living, not the cost of living raising the wages.

There is a bit of a bias on HN toward FAANG salaries and experiences. Outside of coastal cities, the salaries appear like Monopoly money.

This thread is depressing me as well, and I'm doing "okay" compared to my other friends in other professional fields.

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