Comment by kf7njh | Hacker News Reader

Comment by kf7njh | Hacker News Reader

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As an American living in Germany for a few years now, this is something I really struggle with.

In short, it's because Europeans are content with lower wages.

I am in a "high-demand" job as an electrical engineer at a publicly traded medical company, and getting less than €65k. This is absolutely absurd in my opinion, but in discussions with friends/colleagues they feel it's overall typical.

One colleague was in shock when I said I expect to break €100k within the next few years (Sr level)... But was also completely unaware of any basic public company financials (average value of employee is ~$350k), or salaries in our USA office (~$160k).

Unfortunately, my value is not related to anything other than my cost of replacement--since my neighbor thinks €65k is acceptable, that's what I get.

Company performance, employee benefits, healthcare, taxes, etc do play a role.... But it's nowhere near the salary gap.

Help me spread the word OP. Tell all your friends. Start demanding more. Mercedes recently announced all employees would get raises matching inflation. It's a good start but honestly we need to recognize this as the bare minimum, not like they are heroic and progressive.

Ps: Hope nobody minds me dropping numbers. I have no insecurities and don't care, but believe it can be a good help for the discussion.

You make a lot of good points. I agree it is a cultural problem but the other half of the problem is _Taxation_.

Culturally most workers in EU markets (I am generalizing but lets exclude Executive, Finance, and Consulting positions) see an offer letter as the end of the recruitment process. People are not confident in negotiating an offer up because they are afraid employers will withdraw or walk-way (Which I have had happen so definitely not impossible). This also means that employers are more likely to see someone negotiating up (for a non-management position) as a 'difficult' IC.

The costs per 'permanent' employee in terms of taxation/contributions is higher than in the US. The taxation on employee income is _way_ higher in most of Europe than in the US. This double stream of government income from employer and employee is needed to finance both the huge slice of government spending (Healthcare, Social Services, Infrastructure) as well as the Pension Systems that at this point are a Ponzi scheme where working taxpayers are paying for retiree income (Privatized Retirement is fairly limited in Europe and mostly optional on top of standard contributions).

You see these two problems dissolve (Culture of content, and high taxation) when looking at the Contractor market, where employers are able to offer far higher rates very similar to the US market when ajusted to COL.

Ultimately lower taxes for the average worker are not gonna happen in Europe because gov deficits would be rampant and nobody is willing to forsake the existing social safety nets.

> Pension Systems that at this point are a Ponzi scheme where working taxpayers are paying for retiree income (Privatized Retirement is fairly limited in Europe and mostly optional on top of standard contributions)

How is this a Ponzi Scheme ? Currently working people help sustain retired people the same way retired people help the retired people when they were working and the same way young people will sustain the currently working people when they retire. That's called generational solidarity. What European countries used to do at a family level, they do it at a national level now.

One of the PROs of it is that if the cost of living change dramatically (which has been the case of the last 50 years) the pensions can adapt because they depend on current income instead of the pensioners relying on investments which sometimes are wiped out through no fault of their own.

One of the CONs of course is the delayed effect of the baby boom. But one can expect that it was a particular historical artifact that might not occur again.

You can disagree with the idea but calling it a Ponzi scheme is incorrect.

It is an unsustainable system. Birth rates across Europe are too low for a system that uses working taxpayers to support retirees.

How is this a Ponzi Scheme ? "Currently working people help sustain retired people the same way retired people help the retired people when they were working and the same way young people will sustain the currently working people when they retire."

The only reason ponzi schemes fail is when they don't have enough fresh blood to pay out the prior investors. Your mention of population shrinkage after a baby boom is fairly similar.

"You can disagree with the idea but calling it a Ponzi scheme is incorrect."

Yes, it may operate similar to a ponzi scheme but cannot technically be called one. Usually the owner of the ponzi fund siphons off money for themselves, which is pretty similar to congress siphoning off social security for other pet programs. So I do agree with the sentiment, at least here in the US where the programs are expected to be insolvent in the coming decades.

Of course it's a Ponzi scheme since it promotes freeloading.

People without children also expect to receive pension while escaping the effort and time to raise the next generation.

When you did this at family level the result was pretty evident, in your old age you were alone and vulnerable. Doing this on national level hides this effect.

You are using a moral vocabulary to describe a social program. You already lost the point.

I encourage you to read about the Capitol Hill Babysitting Co-op [0] which I find enlightening. It's not about pensions but about liquidity yet it is an interesting insight into why assigning moral values to what is basically an "mechanical" system made to improve the life of people is not just wrong but useless.

[0] https://slate.com/business/1998/08/baby-sitting-the-economy....

I have read it. I know what liquidity trap is. That's not the problem. It's incentives. Incentives matter and people in western countries are not incentivized to have children and money isn't all that matters.

People care about reputation, social standing, glory and their conscience. All of these can act as incentives. When we say that incentives matter non economists only hears that people respond to price signals but what economist really mean that, holding everything else constant and giving a price signal people will do it more or less of it.

Economists often focus on monetary incentives because they are observable and usually easier to change in a model. For example if we say that doctor salaries go up more people will want to be doctors. This is misunderstood that doctors are motivated by money rather than the non-monetary motives to be doctors but this really means that holding the non-monetary satisfaction of medicine constant, increasing the monetary satisfaction will make medicine more attractive relative to other professions. The clear example for this are doctors in USA and Cuba. The difference in monetary compensations is huge relative to other professions but non-monetary motives are still high enough for people in Cuba to want to endure ardous learning to be a doctor.

I fully realize it's a lost battle. The genie is out of the bottle. I'm just annoyed that it's happening. I live close to a city that 2000 years old and all that time population either managed to grew or stagnate but never this.

There's no reason people in high energy consumption countries should be encouraged to have children. Immigration is a cleaner ponzi scheme that helps reduce suffering among people who already exist instead of making people for apparently greedy motivations.

Why not just allow people the option of privatizing their retirement contributions and stopping this eternal cycle that only would have worked with a bottom heavy population pyramid.

Getting closer to stable population seems fine with me, for significant decline I question whether the push towards saving and investments are a real solution. Sharply declining workforce would render a lot of the earlier amassed capital worthless and devalue the remainder as all capital would be in surplus for the needs of available labor. Our current paradox with automation would really have to come to an end.

You pay in over your career. Your kids are paying for themselves. The only group who are freeloading were your grandparents or great grand parents

It's a Ponzi scheme when it's not sustainable.

Social Security in the US, for example is not financially viable in its current form. Either the retirement age will need to be raised or its obligations will need to be abandoned, probably a bit of both.

Some but not all European pension schemes are facing similar problems.

>> Either the retirement age will need to be raised or its obligations will need to be abandoned

Or the OASDI tax rate could be raised, or the wage cap on the tax could be raised or eliminated, or growth in GDP might turn out to be higher than expected, or life expectancy might turn out to be lower than expected, or the official inflation rate for Social Security might turn out to be lower than the actual rate, or any number of other possibilities.

And if none of those occur, yes, one option would be to slightly raise the retirement age for people who aren't near retirement, or benefits might need to be slightly cut.

That's not unsustainable and it's not a Ponzi scheme. Ponzi promised a 50 per cent return in 45 days. Ponzi started a company to promote his scheme in January of 1920, he pled guilty on November 1, 1920. He could not have saved his scheme by reducing the rate of return to 48.5% or adding a few weeks to the maturity of the term. It was truly unsustainable in the old sense of the word, not the new meaning of, "that which has been going on for many decades, will continue to go on for many decades much as it has in the past, but which I do not particularly like".

> It's a Ponzi scheme when it's not sustainable.

That's such a general and undeveloped affirmation that you probably don't even believe it yourself.

Here is the real definition from Wikipedia:

> is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.

Pension systems are not a fraud. If you believe so, we do not live in the same reality.

Taxpayers and pensioners are not investors. They are people who want to live a descent life.

Not everything should be viewed as a financial market. Reducing everything in life into a spreadsheet makes you believe in fairy tales. People end up believing they are going to become millionaires by investing their hard earn dollars into actual Ponzi schemes like bitcoins and the like.

Rich countries are producing many times more than what they need. There is plenty for everyone to go around, they just need to organize themselves a little better.

I wasn't claiming that they're literally ponzi schemes. Clearly they're sanctioned by law, obviously I wasn't arguing otherwise.

I was simply using "ponzi scheme" in the more casual, euphemistic sense of "skeevy unsustainable scheme that will screw people over".

And like I said, I don't believe all pension schemes to be dishonest/poorly executed. Some are just fine. But many are sloppy and poorly managed. A few are even so poorly managed to an extent that I'd say it borders on fraud, if not legally, at least morally. (I don't think that's common, necessarily; I think most mismanaged pension plans are entered into with the best of intentions.)

> Taxpayers and pensioners are not investors. They are people who want to live a descent life.

I'm not blaming them. They're victims of this poor management.

https://www.pewtrusts.org/en/research-and-analysis/issue-bri...

This article paints a rosy outlook. And indeed, it's good news overall. But 35 state pensions meeting their goals means that 15 aren't. That's worth criticism.

Do you know there is a tax cap on social security?

Hey french here. You are speaking of raw income, right?

I don't think we are content with lower wages. It's just that you cannot really compare EU-US just like that. You need to compare cost of living, entirely. Paid leave. Public holiday. College fees. Working time.

But also what I call 'peace of mind'. In Europe, you have retirement from the state. You will never have crazy, 6 figures hospital bills. My employer fires me ? I don't care, I will stay get paid through unemployment insurance. Getting sick ? Still paid.

However, even if you can't compare US-EU numbers, in Europe engineers are underpaid, and it's good that you try to raise your voice through your colleagues. I think we are also a bit shy about sharing numbers in the office, which only benefits to the employer

Exactly, gross salary.

It's true you can't really compare directly like that, but just as an example let's normalize the data on the point of vacation/holidays. EU: 52 wk / yr * 5 day / wk = 260 days / yr 35 holiday / yr = 225 working / yr 260 / 225 * 65 = 75.1k per year normalized

vs USA: 10 holiday / yr = 250 days / yr 260 / 250 * 160 = 166.4k per year normalized

Here we can see how even when considering something like holiday: the difference is still not even remotely close.

You're absolutely right about the 'peace of mind' aspect. This is something that I really love and will definitely miss... But let's not fool ourselves. For example it's common knowledge in Germany that the state retirement will only cover about 50% the cost of living. Not sure about the situation in France, but this means I still need to do a huge amount of self-saving and investing just to live at the bare minimum.

In the end I completely hear your argument and can understand it.... It's just everything in life is pretty gray and situational.

Note: if anything I have said is wrong, definitely let me know! Nobody is perfect!

Seems US estimate may be low. I work in a large US tech company and I get 14 holidays (and we are typically dismissed 3 hrs early on afternoons before holidays, which adds up to another 5 days) and another 3-4 weeks of vacation I choose when to use during the year. I'm typically off about 35-40 business days a year when all taken together.

> I don't think we are content with lower wages. It's just that you cannot really compare EU-US just like that. You need to compare cost of living, entirely. Paid leave. Public holiday. College fees. Working time.

None of this justifies the lower pay compared to US tech where it's very common to have a good medical coverage and much higher standards of living. It's not like France or Germany are cheap for the average french or german. All things considered, french and germans end up taking home less than their american counterparts. Maybe this worked well in the last 50 years in Europe, but it most certainly won't in the next 30 when you see fewer younger people entering the workforce and the pension and medical system won't be sustained in Europe.

Sharing numbers in the office DOES NOT benefit the employer. Share your salaries, bonuses and equity based compensation! That way your employer can no longer take advantage of you or your peers!

I don’t think you read OP correctly. They’re saying that because devs are too shy to talk about salaries in the office, it only helps employers.

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