Hacker News Reader

Comment by kayoone | Hacker News Reader

Quite interesting. In Germany or Europe very very few programmers would make more than 100k USD (around 70k EUR) unless he is in some position where he leads a team or oversees bigger projects. Then i see how cheap cars and computer hardware etc is in the US and i really start to wonder where this massive difference comes from. US engineers seem to earn way more and generally pay much less for many things.

Apple hardware for example is the same price in EUR as it is USD in the US, cars generally the same or even less.

View on HN

This is exactly why I moved from Germany to the US. I was tired of being on the end of the salary bell curve at international conferences. Higher salary and lower taxes mean that my disposable post-tax income is now 3.5 times what it was in Germany. And I am not even in the Bay Area yet!

From my point of view, the situation for software developers is particularly bleak though. You don't have to move to the United States to do much better. Going to Switzerland or Luxembourg is pretty good too.

My starting salary in the bay area right out of college is higher than what I would have conceivably made my entire career in Germany. I understand that small companies that do business locally operate with different economics, but what's the excuse for multinational corporations?

My decision to work in the US wasn't based in any way on expected compensation but rather on the excitingness of the job. Still, it's nice to be treated well as an employee.

We work many more hours and we have to pay more for benefits like health care. Most other medical costs are higher here too; drugs are a lot more expensive in the US than the rest of the world, because the drug companies fold the research and testing costs into our prices, and only include manufacturing and distribution costs in the rest of the world's pricing.

Cars might be cheaper here, and gas certainly is, but we use a lot more of both than Europeans because we tend to be spread out a lot more. That's another factor raising our cost of living, which drives up the salaries we demand.

That is not the case that the large drug companies sell for distribution + manufacturing cost. If that were the case, drugs would be essentially free in the rest of the world and they most certainly are not for brand names. In Canada the government sets the price. Here's a chart that's still relevant that shows prices in US/Canada/Mexico: http://cummings.house.gov/pdf/intl.pdf

Some generic drugs cost literally pennies: http://en.wikipedia.org/wiki/Generic_drug#Economics

The drug companies convince foreign governments to let them charge more because they say it costs a lot to develop the drugs. Other countries pay too. The US isn't the only one.

Obviously they're making a profit too. My point was that they determine prices for most of the world on a mass-production manufacturing basis, while for the US they also include recovering the research and testing costs. That's why we get charged more. (That, and because most of the drug costs are hidden behind the insurance system which helps them get away with this practice.)

"The drug companies convince foreign governments to let them charge more because they say it costs a lot to develop the drugs."

It's kind of funny that they say that, since they're effectively heavily subsidized by the US government -- because virtually all of the basic research in the US (and in the world) is funded by the US government. Pharmaceutical companies get to use the fruits of all that basic research for free.

Even accepting the premise that drug companies are dependent on all the basic research, it's but a tiny fraction of what goes into making an actual drug. Just because you know the basic biological reasons for a disease doesn't mean squat to making a chemical entity that you can give to a human being. The whole process of designing something that has actual efficacy while at the same time not injuring the patient is extremely expensive and difficult science and it almost never is done in an academic setting.

"it's but a tiny fraction of what goes into making an actual drug"

I think it's the other way around. To make drugs you have to know chemistry and biology (not to mention the dependence on various tools and techniques which have their origins in various materials sciences, electronics, math, statistics, etc), sciences which were and still are almost entirely based on and advanced by basic research. Without this knowledge, these tools, and these techniques the pharmacutical industry would be nowhere. Furthermore, many commercial drugs are based directly on discoveries made by researchers working in university settings and funded by the US government.

Of course, after all of that, the drug companies still do their own research and pay various fees to get the drugs on the market. So it's not like they contribute nothing to the process -- and obviously the process is still very expensive. But it doesn't erase the fact that the entire pharmaceutical industry is still effectively heavily subsidized by the US government.

Having spent over 8 years doing drug R&D I can tell you that it is most certainly not the other way around. The specific kind of chemistry you need to develop a drug (a discipline known as medicinal chemistry) is exclusively practiced inside pharmaceutical companies. The academic research in the field is paltry. Without a compound, all e basic bio in the world is useless.

By your logic though, aren't all technology companies subsidized by the federal government? Don't companies like Intel and IBM use various discoveries from academia to make their products? Aren't all software companies essentially benefitting from government funded research into computer networking, language design, etc... Where do you draw the line?

"Having spent over 8 years doing drug R&D I can tell you that it is most certainly not the other way around. The specific kind of chemistry you need to develop a drug (a discipline known as medicinal chemistry) is exclusively practiced inside pharmaceutical companies."

You still have to know basic organic and inorganic chemistry, and math and statistics. All fields to which the pharmaceutical industry contributes absolutely nothing.

"Without a compound, all e basic bio in the world is useless."

But many of the compounds pharmaceutical companies use are based directly and indirectly on breakthroughs in basic research. And that doesn't even begin to scratch the surface of the debt the pharmaceutical industry owes to the fundamental understanding of the human body (and that of animals) that came from basic research.

"By your logic though, aren't all technology companies subsidized by the federal government?"

Absolutely. There's a huge debt corporations the world over owe to the fruits of research funded almost exclusively by the government.

Erm.. I'm certainly no expert, but 'we have to pay more for benefits like health care' should be somewhat qualified.

In DE half of the (state based. There's a 'I don't want to be part of the general system' option that works slightly different) health care is payed by your employer, half is deducted from your salary. It's a percentage of your income.

Next thing that kind of trips me here is that I'm pretty sure that the tax rate is a little different...

So - comparing the salary is probably already problematic, but if you want to start a discussion about costs you should compare the income _after taxes_. Good luck with that..

Edit: For kicks and giggles: If you're a single (not married, no children etc.) your tax rate here would be around (ballpark fiture. +/-5, I was too lazy to look it up and it ~depends~) 40% of your salary. This is the tax for your income only. You pay more than that (your share of the health care, a different 'tax' like thing for retirement fonds etc).

up to 45% !

http://en.wikipedia.org/wiki/File:Income_Tax_Germany_2010.pn...

But remember that you only pay that on the last step of the income, to get to 40% of real deductions from your wages you should have a monthly pay >20000€

Marginal tax rate for me is around that (including California state tax) and likewise that doesn't include the Social-security and medicare.

Also, we have very limited safety net for retirement, so figure another 10% (or so) going to retirement savings. With my 401(k) contributions, my paycheck is almost exactly 1/2 of my gross pay.

http://dbaron.org/views/taxes-2007.html claims that in California, total marginal tax rate including SS but excluding private health insurance is around 40%, depending on the income. So with some room for retirement and health insurance, yes 50% is about the same or less as in most of Western Europe (the 40% quoted for Germany is only income tax, you'd need to add the mandatory part of the health insurance to it, the local taxes and of course the sales tax which is 19 to 21%; I don't think it ever goes above 10% in California). Oh and 'capital taxes', (not even 'capital gains taxes', which you have to pay too, I'm talking tax on things that you own and on which you've already paid tax before).

Yes California is expensive, tax-wise, but it's not as expensive as most places in Europe. Other places in the US are much cheaper.

I swear I'm not picking on you but I see this line all the time when US-EU gas price comparisons are made and I just can't buy it from a logical POV. So I thought I'd get all anal and play with the stats :-)

The average US driver does about 13,500 miles per year: http://www.fhwa.dot.gov/ohim/onh00/bar8.htm

The number I keep finding again and again for UK driver is 9,628 miles a year (which sounds very low to me but I'll roll with it). That's almost a spot on 40% extra for the US driver (for a country with 42x the surface area, to be fair). OK, cool.

Given a US gallon of gas in the UK is about $8.25 compared to the current Californian average of $3.77 and the US driver is only driving 40% more miles on average, the US driver is still spending way less money on gas and would need to drive significantly further distances to make up the difference.

Our cars are probably less efficient on average too, with all the SUVs. You've got miles/year and $/gallon, but not miles/gallon. You need all three to compare. I'd be interested in what you come up with.

For what it's worth, my commute is one mile and I drive a Mini, so I can't use the commute cost to justify my own salary...

Having a more costly car ones own choice. You can't expect to have more luxury in the US when you're trying to compare $/gallon

US is quite easy to find; http://www.bts.gov/publications/national_transportation_stat... -> let's say 33 mpg for passenger cars (depends a bit on which vehicle classes you count). EU data is harder; Eurostat doesn't seem to track it (haven't searched very far - I'll ask my friends at the DG Transport if I don't forgot if they track it). http://www.greencarcongress.com/2004/11/average_fuel_co.html seems to suggest 43 mpg, but I don't see where they get their data from (the linked report is MIA). So US cars, in aggregate, use 30% more fuel. Which, intuitively, seems to be about right.

Taking into account gas prices, that still confirms that US citizens don't spend more than Europeans on gas, in absolute numbers, even given their different preference in cars, radically different urban development patterns and fuel purchasing power vis a vis the rest of the world.

I am in Germany, and 70k EUR seems average for someone with experience and/or specialist skills. (Of course less experienced or "motivated" developers will be on a bit less than that). 70k would be low for anyone in a leadership role. Of course half of that gets taxed away, so I wouldn't really compare it to 100k USD.

Can you, without giving away too much information, tell me what kind of market you're talking about (i.e. are you thinking of embedded, financial, whatever)?

I'm from Germany as well with (depending on skill) 5-10 years experience and your numbers just don't match mine. Maybe you just confirmed once more that I fail to negotiate, but.. by a large margin.

I am drawing this from the semiconductor, telecommunications, automotive, healthcare technology, and travel domains. It doesn't really seem that relevant though as software developers are not tied to domains like say hardware engineers, or I guess non-programming domain specialists. Although now that I think about it, software developers do tend to pigeon-hole themselves a bit. I have heard of people calling themselves ".NET developers in the real estate branch", which I suppose is a psychological blocker to jumping to a better-paying job.

I guess it depends on where in Germany we're talking. The Cologne and Frankfurt areas pay better than the East, from what I hear. But 70k isn't unusual; I was paid 60k straight out of college in Frankfurt, 10 years ago.

There's so much more demand in US. They got companies like Microsoft, Google, Intel, AMD, Oracle, etc, plus the combined demand of VC-funded startups.

There's no equivalent market in other developed countries, not even UK, Germany and Japan.

Except contractors - good contractor in the UK makes £300-£600 day programming

I think the survey specifically excluded contractors.

In any case, £300-£400 is not unusual for a good, experienced software development contractor in the UK, but plenty make less. You won't normally see rates much above £400 unless you're looking in London and/or at jobs requiring very specialist skills.

I've seen several long-term UK contracts for £800 a day. Especially for someone with a niche technology, but also rarely for generalists.

That's a rate as advertised by recruiters, so try and get another 12.5% on top if you could go direct.

That would be about $340,000 a year (allowing for 25 days holiday over the year).

but do they earn that in a year on average ? i doubt it.

It's probably the market -- the demand is higher in the US.

Reply on news.ycombinator.com