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Comment by paddim8 | Hacker News Reader

The inflation they're experiencing is not a sign of a collapsing economy. It's similar to other European countries right now. Also, 80k USD a year is a ton by European standards, so I'm not sure why you're using that as a point of comparison. Especially considering the employer pays significantly more (which goes to healthcare, pension, etc.) in practice. Iceland has some of the highest salaries in Western Europe.

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> Also, 80k USD a year is a ton by European standards

The rest of Europe doesn't have to import nearly as much food and at high tariffs.

If it isn't fish, lamb, potatoes, some garden veg or oats, it's coming over on a boat. The price of a single lime at Bónus will make your eyes water.

Food is not a huge expense though. I spend 150€ a month in Sweden. Even if it was twice as expensive in Iceland, it wouldn't be too bad. They have a very high disposable income. And things like heating and electricity are basically free.

Icelander here as well, I've worked in Norway, the UK and Germany. An 80k salary here buys you the lifestyle of a 50k salary in Berlin, the only reason I moved back is kids and grandparents.

Was that rent driven? Because Berlon is, still, considered cheap. Not everywhere and a lotnofnlocal are getting priced out since at least the early 2010s, but still cheap compared to places like Munich or Frankfurt.

No, I can't say it's rent driven per se as there are other factors but housing issues have gotten progressively worse last 20 years or so, same problem as everywhere else except that in our case it's amplified by having to structure an economy around the peculiarities of having world's second smallest independent currency in our wallets. That said, there definitely exist worse housing markets in the world, this is no Munich. Regarding the currency, that Iceland is expensive, is partly due to rules such as our pension funds not being allowed to invest but 20% of their fund outside the country, a rule designed to reduce the downward pressure on the local currency and create demand for it that would otherwise exist to a smaller degree as the long-term returns of local investments have been worse than the performance of the "foreign" portfolio. Mix such rules which create "artificial" demand, actual demand for the currency from tourism, indexed mortgages (a concept so unbelievable I've added a link at the bottom) driving up prices and you end up with a situation where economic problems are one of the few things that we don't have to import.

https://www.islandsbanki.is/en/news/what-is-an-indexed-mortg...

Spending 1.6 euros (18,50 SEK) per meal (assuming 3 meals per day) including eating out etc is very low. That is far from the average in Sweden. And it is even more far from being what you spend if you wanna eat out a lot (which many high income tech people want). I'm not judging (I spend very low amounts on food myself) but you can't really say you are representative for the average tech worker in Sweden when it comes to food spending.

I’m moving to Sweden from the Bay Area and this seems very low - I spend that for myself and my wife probably over two days (including coffees etc)… Is this the genuine average? It’ll make me swallow lower salaries a lot easier!

Nope, that is extremely low. I would double that for buying food just from a super market. And even then it is likely not too special.

150€ sounds like the advertised poor person diet. Rice, beans, cheap vegetables like potatoes, little of cheap meat(chicken legs maybe).

> 150€ sounds like the advertised poor person diet. Rice, beans, cheap vegetables like potatoes, little of cheap meat(chicken legs maybe).

That's my diet too lol. Am I eating like a poor person? TIL

Hopefully you’re not eating like that and poor. If you did, you’re going to live a long time and need to save a ton for a long retirement!

"Only the rich can truly afford to eat like they're poor" - Scoundreller

The average expenditure on food and staples of a Norwegian household is according to national statistics €235/month/person (not including dining out); based on the general cost difference between Norway and Sweden, this should translate into €210/month/person.

Some people on HN when they talk average mean average for HN crowd... and it is very different from overall average

That's very likely. If you eat for €2k in Sweden you're not eating out at any time during the month. You can add at least another €2k to that if you want to go out to eat every workday lunch, which many high-income people do.

Speaking from personal experience, its mostly younger workers who eat yesterday's leftovers in the cafeteria.

Looking at my banking app for the last 6 months I spend between 6K to 10K Swedish crowns in supermarket food, work lunches and dinning. I live I Malmo. Stockholm dining will be more expensive. Moved here in 2011 from the US, love it. 6 weeks of paid vacation and work life balance: priceless. Welcome!

And 30 minutes to CPH. Not a bad life.

5 euros per day, come on man. That's not enough even in LATAM.

> it's coming over on a boat.

Is a maritime shipping supposed to drive up prices or something? I thought it was the cheapest way to go, to the point of being cheaper than trucking.

The only exception I can see if for stuff that doesn’t store well, but controlled atmospheres have done a ton to make it possible to eat “local” apples in the middle of winter.

I’m in Canada and it seems to be a wash whether our citrus comes from Spain, North Africa or Florida.

Canada has 100x Iceland's population, and population centres are heavily concentrated near the border with the US. The delivery logistics are there.

Now change that to Hawaii or remote First Nation communities and those costs go up dramatically.

Idk if it's considered a lot or not, but this source estimates transportation to Hawaii to increase the price of goods by a max of about 7.5%, while in all likelihood it's much less due to modern shipping.

https://www.civilbeat.org/2015/04/living-hawaii-how-much-doe...

Labour costs are the reason for the biggest chunk of Icelandic prices plus taxes.

Since this is HN I will add that I am ok with both of those. Wages for unskilled labour should be high enough to live on, and taxes pay for our social infrastructure.

We've been there last year. Truth be told, groccery shoppong was nowhere close to what it used to be ten years ago. Actually, groccery prices used to, in total, on par with France at the time and only slightly above Germany.

I do remember the time 3 (!) onions were as expensive as 1.5 kg in Germany. Overall, and I have no idea about rent or salaries, groccery prices were reasonable for 2022.

Isn't Iceland significantly more expensive to live in than the majority of Europe? Not specifically housing cost but everything else.

yes, small population plus remote location for shipping and no natural resources (besides fish) means we're much lower priority for imports and scale of imports.

> Also, 80k USD a year is a ton by European standards

I can't speak for Iceland, but for Western European tech workers 80k USD isn't massive. Like it's not bad, maybe an early-mid level developer?

Juniors get 40-50k in Germany. Mid level 50-64k.

Why are tech salaries so low over there? I’m the US you will break $100-120k USD as a recent graduate even in parts of the South and the Midwest with lower cost of living.

Compare the cost of that degree in the US vs Germany.

US tech salaries are also distorted due to VCs having more cash than they know what to do with, bidding up salaries to compete with FAANG.

Lack of companies who earn a lot or have a lot of cash / good business model. Currently open FAANG engineering positions are close to 0 (Still more than 600 positions in the US) and there are single digit "FAANG-like" companies here (hundreds in the US).

I don't think that Germany will ever catch up tbh. There is no incentive. Once you earn a little more, the progressive tax rate is too high and eats everthing away. Less people pursue engineering in the first place, because net wages are so compressed. Also just look at real estate.

Munich:

- Median house price: USD 1’534’933 for ~1500 sqft

- Median salary: USD 59k pre-tax.

The pension system will break in the next decades. Actually it already is.. it is already heavily financed by other taxes.

This country has other perks like more vacation days, but making bank is definitely not one of them tho.

Many academics emigrate to Switzerland, USA, Netherland or Canada - me included.

How can house prices like that vs median salary like that possibly exist?

By-and-;arge Germans don't own their own homes. The median age in Germany is about 45, but less than half (~49%) own their own homes. That compares to about 65% in both the UK and US, both younger than Germany.

Around half of what your employer pays goes to the state, health insurance, retirement insurance, social insurance, ... In the US I assume you need to save much more money in case you lose your job or can not work anymore due to health.

Also education is paid for by the state. In the USA I heard people pay off study debts for many years and are thus also forced to look for high paying jobs

1. Europe isn't a single tech market, it's dozens. You might get paid California wages in Switzerland, Midwest salaries in London, and less elsewhere.

2. It's also dozens of markets when selling products. As much as the EU tries, functionally there are still barriers to trade across the EU, let alone places like the UK. Stuff like language, culture, religious practices all impede easy scalability, not to mention differing laws.

3. The US is a continental-scale superstate mercifully isolated from most of the world's wars. Europe is not. It's that much harder to grow the amount of capital North America sees when the continent is split of more than often at war with itself.

No, it' not that low for mid level engineers. Here's some anecdotal data:

An SDE II offer from Amazon (Berlin) was 90k base + 15K sign-on bonus + some RSUs. An SDE I (new-grad ish) at Amazon makes 72K euros + RSUs (at Aachen).

Zalando offered 75k for an Applied Science role (Berlin) for someone with a masters degree and 3 years of web-dev experience before the masters.

Delivery Hero (Berlin) recently hired a friend of mine. His base pay was 84k euros. He had ~ 5 years of experience as a back-end dev.

Some one I know who defended their PhD in 2022 was offered 90k (base pay, no variable component) at Porsche.

I know about a recent offer from a translation comp any based in Cologne that was close to 80k euros (base) for an SDE.

New grads still get offers in the 45-55k range, especially in smaller cities. A friend of mine just received a 57k offer from Deutsche Boerse (Frankfurt) for a non-SDE technical role. Honestly, it's not bad. 57k is approximately 2500 euros a month after taxes. Assuming that you pay 1000 euros for rent, you are still left with 1500 euros. Groceries shouldn't be more than 500-600 euros a month.

1000 euros for rent seems absurdly low. I don't think this is true in Berlin anymore. If you have a family, rents are around 2k.

Let's see: you don't live there, but you're arguing with someone who did? Have you ever even been there?

How is this relevant? Why does one need to live in Iceland (I have) to remind us that 80k USD a year is quite good in Europe, and that inflation isn't much worse than anywhere else?

It is obviously relevant and I don't need to waste time explaining it. But you said you did live there, so never mind.

It doesn't matter that they have not lived there, but they are not appropriately considering cost of living. Just because Iceland is in Europe and is a Nordic country does not mean it has the same economic situation as Sweden.

Indeed, and the government's "cost of living index" doesn't tell you what it really costs.

I live in another Nordic country that also has the same inflation rate as Iceland.

But probably not the same cost of living as here.

>80k USD a year is a ton by European standards

I can't speak to all of Europe but tech wages are significantly higher here in Denmark.

That depends on if it's before or after tax. If after: 46k DKK out monthly is top of the line given our own crushing taxes. If before, yeah not good.

Really? Not in Sweden though. What do you think accounts for this difference?

Tax burden on Danish salaries is borne by employees post-tax rather than businesses. This tends to inflate net take home pay.

Post-tax taxes?

Just remove that word - I failed to properly edit the sentence.

The social insurance (arbetsgivaravgift in Sweden IIRC) is paid by the employee.

Apart from that, many compare the salaries in Copenhagen and Malmö, which is obviously unfair with Copenhagen being the national capital, while Malmö was a run-down hole the last time I was there. I assume tech wages in Stockholm are more comparable.

Denmark doesn't have employer taxes, unlike the rest of Europe, making salaries look much larger.

>80k USD a year is a ton by European standards

It's good money but not a ton.

Also, it's Iceland, COL is very high!

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