It's the main reason I chose to move to Europe instead of the US, despite potentially making more money in the US. I very much appreciate the labor protections in most EU countries.
Companies could even offer that as an option. We pay you $97k with no labour protections, or $68k but we promise to give you all the labour rights that Germany has, including nice long holidays, unions, no unpaid overtime, can't be fired without cause, etc. Your choice.
(And those figures are the median programmer salary in the USA and Germany respectively)
So deel.com is a usual choice.
of course, who's to say that next quarter priorities of management or shareholders shift & those "promises" evaporate?
And yeah, they could terminate the contract, but they would still be bound by its terms that say how they can do that, with how much notice, for what reasons, and how much they will owe you.
Yes. And I appreciate those labor protections enough that I gladly pay for them.
I could still buy a car, a house, raise a family, have some savings, etc.
The stability and security provided by the labor protections are very much appreciated, a lot more than some extra cash would be.
The US also has contractors.
That's why many EU countries have pretty strict limitations on short term contracts, like how many you can do in a row. It results in a huge reliance on contractors.
Can you explain your thoughts here a bit further? The short term contract can be renewed or replaced with a full time contract. This should provide extra incentive to perform well compared to a full time employee (who doesn't have to worry about either), as long the as the company is a good employer.
As someone in games, this is exactly the road to getting exploited. "If I work harder and really wow them with this feature, I could get full time work!" meanwhile, there were plans to not renew anyone at the end of the project and to lay off full time workers. But you get a convinient carrot to lure starry-eyed devs with
Your "as long as the company is a good employer" is doing Atlas levels of lifing here.
I don't think that's happening in games or tech, but it's been widely observed that Gen Z is less invested in corporate than ever before (or from the boomer's POV: "nobody wants to work anymore").
It actually makes companies more hesitant to fire.
And on the other hand, the French government dramatically loosened the rules around layoffs in 2016 (you can let people go as soon as you have a decline in sales over a few month, a negative cash flow over the same period, if their are new competitors on your market, or even just if there's technological change in your sector that justifies getting rid of people). It was 8 years ago and it has had little to no impact on France's unemployment, which is still very high.
I heard that wges are less than 50% but you end up saving more
Yup. Cost of living is insanely low compared to the US, even when just comparing hotbeds like Silicon Valley vs London/Berlin/Munich, with the largest factor being housing. Additionally, healthcare costs are far lower as well - there is no such thing as co-pays, surprise bills and whatnot here (although I do admit some things like dental and vision care aren't covered by insurance, but generally still affordable).
Going back recently, it’s a _lot_ more expensive; home has gotten more expensive too, but not at the same rate.
(Some of this is due to the currency thing, of course; the dollar was about as weak as it ever got post-financial crisis in 2018.)
The other bit is that you’re comparing living in Dublin to visiting SF. Rental prices in SF make Dublin seem cheap. You’re still probably financially better off living in SF as an engineer, but I’d rather the quality of life of Ireland/Europe
> Rental prices in SF make Dublin seem cheap
Oh, yeah, they definitely do _now_, but pre-Covid it wasn’t as clear-cut.
> You’re still probably financially better off living in SF as an engineer
I think even that probably isn’t totally clear at this stage. If you’re in Big Tech(TM), you’re probably getting on the order of 60-70% pay in Dublin that you’d get in the same role in the same company in Silicon Valley (there’s some variation, but that’s about the usual ratio). If you have to pay SF rent or mortgage (plus property tax) with that, then you may not come ahead. If you can afford to buy outright or with a small mortgage, you’re probably doing better in SF, but even most big tech workers can’t afford that.
(I think the pay gap probably is bigger outside big tech, tho)
People see the difference in wages, but what they miss is a) the amount of fees and extra expenses they have to pay that escape cost of living calculations, b) the "natural" lifestyle inflation that comes with living in the US (maybe summed up by the word consumerism), c) some size/low density related inefficiencies and d) things like educational costs
Now, yes Europe makes it hard on itself a lot by being dumb (see HS2 costs soaring off or the failed German energy policy - not against renewable but their fee structure is stupid)
Curios regarding how you came up with that conclusion. After paying rent, taxes and buying some groceries from EU senior engineer's ~80k you will generally have enough to maybe buy a new smartphone at the end of the year, not any meaningful amount of savings.
You are an outlier. Very few SDEs in EU can afford to raise a family in their own SFH on a single salary while living in a location with any notable IT jobs market.
No I am definitely not.
In every company I worked for, in three different countries, my coworkers were in similar situations.
There may be some truth to this, but it's not as stark as some think.
The average cost of a "moderate" house in.. say, Palo Alto is around $3M USD. Those are typically older houses, smaller lots, less desirable neighbourhoods.
Everything is more expensive in such an area. Property tax on that $3M USD house is likely going to be about $20k USD per year, one may as well say an additional $2000/month. That property tax alone is more than most people pay for mortgages in any other place in the US.
I once compared my Ottawa, ON, Canada salary to at typical, comparable one in SV. After looking at the cost of housing, and living, I determined that even though I was making 1/3 the salary? I was taking home more.
Now of course, there is one key difference here. If you don't rent, and do buy, some of that missing "take home" goes into property which does have value. But if you're a renter? If your primary cost (housing) isn't coming back to you in some way?
That SV salary is actually a lot less than you think.
I'd take $100kUSD in Ottawa, over $200kUSD, maybe even $300kUSD in SV, if I wasn't able to buy. EG, forced to rent. And I'd have more money in my pocket in Ottawa, at end of day.
Oh, and that massive property tax certainly isn't recoverable. You're paying some of that whether you rent (because the landlord does), or if you buy.
As that dies off and the USD rebalances to a post American empire equilibrium, housing priced in USD will be far more similar everywhere, exactly the same way it did post British and French empires. (back when 1gbp would buy you 10usd)
It's all about population density compared with economic might.
If the USD was to crash tomorrow, people in SV would still draw their salaries, housing would still be the same price relative to them. You're not going to erase costs due to population density and economic drive, because a dollar drops a bit.
Not to mention, the UK has a GDP basically half the US per capita. That has nothing to do with a petro dollar or not. I really see the "petro dollar" thing is a talking point, without the validity to back it up.
https://www.economist.com/big-mac-index
generally speaking USD is going to lose about 50% of its value as the petrodollar and yen carry trade unwind over the next couple of decades.
So to understand what is actually being earnt and spent in the US in a global context, just divide USD prices by 2, then you can see e.g. the US and UK gdp per capita are basically the same.
Its obviously far more complex than this, but that basic rule of thumb still holds even when you add in all the complexity.
How one can take a 67% pay cut and have housing still high means you have more in your pocket you’re going to have to explain.
And it's not just the house itself, goods and services associated with real estate have blown up with it. Home renovations and maintenance work on your home (if you can even find a contractor) are just stupid. So even if you bought in years ago (like I did), the carrying costs are very high.
Housing has exploded in Canada over the last decade. Even in smaller cities like Ottawa, the prices are more expensive than cities like Chicago.
Then layer on top low salaries, and housing affordability is worse in Canada than many US cities.
There are loads of houses well under $1M Canadian, the average price would likely be 700k.
In USD that's about 500K. a far cry from the 2 to 3M USD in Palo Alto. 1M CDN (720kUSD) houses in Ottawa, are what you'd pay $5M for in Palo Alto.
Inflation is not unique to Ontario, you'll see the same sort if thing in SV too
A $3M home in Palo Alto is comparable to a Ottawa home in the core of the city. And not a townhome, a detached single family home.
Palo Alto is like Kanata, price wise. Ottawa core is like San Fran.
Even ignoring the labour rights issues (because I didn't really consider them at the time), rent and other costs were high enough that I was seriously considering a private pilot's license and a small aircraft for commuting, because that would allow a nice easy fast commute from somewhere that wasn't priced absurdly. That wouldn't actually have worked either, but I decided against the USA well before pursuing that to more than a superficial calculation — if I had, then it wouldn't have taken until Scott Manley's videos showing me the flight considerations[0] in the area, to learn why this wasn't going to happen.
[0] "I know, I'll commute by light aircraft to somewhere in the middle of a city that has a huge international airport and is 'one of the busiest airspace in the world'", yeah, no https://johmathe.github.io/flying_bay_tour.html
You can also choose to live in California for a few years as a renter if you are young, save money and go live elsewhere with the savings. Ask me how I know you can do that...
The higher wages in the US are not related to labour protections. They are related to vastly higher wages in tech because of big corps pushing up those wages to have the best of the best working for them.
Proof is simple: Since a lot of low paying jobs in the US have no labour protections.
Or look at what Tesla does in Texas, with the "unprotected" third party companies that don't have labour protections. They are vastly worse off than those that work for Tesla ( since the country required minimum protections and Tesla didn't apply that to contractors)
That doesn't follow. The low paying jobs exist because the value to the employer of hiring someone exceeds the low pay. For those jobs, if the employer is required to provide paid vacation etc. then it can push the cost of hiring someone over the cost of offshoring the job or automating it, so the alternative then isn't high pay vs. low pay, it's have a job vs. no job.
Also, many of the costs are in proportion to the pay, e.g. the cost of a vacation day is the cost of paying someone else to cover, so the difference will often be a percentage rather than a fixed amount. Then it's no surprise that skilled professionals get paid more than unskilled labor, but that doesn't mean the unskilled laborers can't still be making more than they would be in the alternative where the company had higher costs to hire them.
> Or look at what Tesla does in Texas, with the "unprotected" third party companies that don't have labour protections. They are vastly worse off than those that work for Tesla ( since the country required minimum protections and Tesla didn't apply that to contractors)
They have fewer employee benefits, but in return contractors generally get higher hourly wages. One way or another they have to convince the worker to work for them instead of somebody else.
Your argument makes no sense.
It was a bubble, but a bubble that has been inflated for a very long time.
For software engineers, it absolutely matters. For the same reason it’s going to be a pretty weird discussion about Actor/Actress pay if you just ignore Hollywood.
https://en.wikipedia.org/wiki/List_of_countries_by_average_w...
> For software engineers, it absolutely matters.
The bubble means you currently get more in San Francisco, sure, but take the bubble away and you'd still expect the US average to be higher than the EU average as it is in other industries where there isn't a bubble.
Here's the reality:
https://fortune.com/2022/11/15/tesla-texas-gigafactory-const...
> ‘I’m going to die in this factory’: Tesla Texas gigafactory construction workers are suing over wage theft and dangerous conditions
But sure...
> They have fewer employee benefits, but in return contractors generally get higher hourly wages. One way or another they have to convince the worker to work for them instead of somebody else.
"generally"
> Other whistleblowers will complain that they were either not paid at all for their work, or were not given proper overtime compensation. Some who sacrificed their time to work over Thanksgiving say that they were never paid the promised double wage, according to the case referral.
Next time. Please come with sources. Because I couldn't find any credible sources for your claims...
There you go.
Remember folks: a company's interests are directly opposite to yours. If it makes enough money to not hold their promise, they will.
I don't want promises from an actor that is structurally infinitely more powerful than I ever will be. This is why not only must this be on contract and enforceable at any time, but individualistic mindset is always against our interests, because it's easy to promise to one who will be able to defend themselves and plunder another one who can't.
It's not my choice, it's our choice.
FWIW, this is not as simple as labour protections being effectively equivalent to $29k. By being a legal requirement and not a choice, that $29k doesn't register to the market as using disposable income, so competitive pressure doesn't inflate prices of everything to compensate. It's strictly better than having a choice between $97k and $68k + labor protections.
In competitive markets prices approach the cost of production rather than absorbing all of the disposable income of the customer. If you have uncompetitive markets, that is a separate problem with its own solutions.
And then you have the other problem. The job pays $29k less because it costs the company that much to avoid those costs, i.e. they're willing to pay that much more to someone in the US to do the same job. That doesn't mean you're getting $29k in value. Some of the money is going to compliance and administration rather than you.
And in general money is worth more than stuff, because if you want the stuff you can buy it with money, but if you don't want that specific stuff then turning it back into money or other stuff at best incurs transaction costs and at worst isn't even achievable.
The notion that you're not taxed on the stuff is also an illusion; the rules apply to everyone in the jurisdiction and the government needs however much money from people to provide the services it provides so if you're not paying it there you're either paying it somewhere else or getting fewer government services.
All markets are a bit uncompetitive — if they were not, if they were perfectly elastic and frictionless cows in a vacuum, then not only would anyone making a profit be undercut by someone willing to make less profit, a cycle which would repeat until profits became zero, but so too would wages be undercut by anyone else willing to provide the labour for less, with the same cycle driving income to subsistence + internet in our present case (or pennies per kloc when LLMs get better).
Oh sure, but there's a vast difference between "people make $1000 more and landlords take $0.05 on the dollar" and "people make $1000 more and landlords take $0.95 on the dollar".
Profit margins are also not inherently determined by wages in some other sector. If a bag clip costs $1 and $0.25 of that is profit and $0.75 is cost of labor, the profit margin clearly isn't zero. If nurses then get a pay raise that came out of reduced overhead rather than higher prices, the unrelated $1 item can profitably be produced for the same price it always was.
In can, indeed, go the other way. Some item is $1.00, $0.75 of that is labor, you eliminate some regulatory overhead which reduces the company's labor costs (e.g. need fewer HR/lawyers) and now the labor costs fall to $0.60. But this also reduces barriers to entry to the market, so competition increases, the profit component drops to $0.20 and now the item costs $0.80 instead of $1.00.
You mention some regulatory overhead being eliminated, but more often than not, a surplus of disposable income enables passing further regulatory requirements that improve (or at least purport to) safety or quality of products and services, and that were hitherto too costly to implement. Then, most sectors aren't nearly competitive enough to keep the margins to zero, and some degree of price fixing is a natural thing that happens without any actual collusion, so things get more expensive (per unit) (or don't get cheaper). Then, like with new regulations, you also get new products and services that had no market yesterday, become popular today, and a de-facto requirement of living tomorrow. Etc.
> Oh sure, but there's a vast difference between "people make $1000 more and landlords take $0.05 on the dollar" and "people make $1000 more and landlords take $0.95 on the dollar".
If I parse this correctly, then the latter is definitely the case. Real estate is the prime force that eats all surplus disposable income. Houses and apartments get smaller, get built from worse and worse materials, using inferior techniques, and designed for ever shorter life span, all while getting more and more expensive. Any sudden bump in disposable income across the population is, first and foremost, likely to be eaten by rent.
My argument is that this is not a feature of markets but rather government action.
The rise of two-income households is a great example. Historically only the husband worked for money and the wife would do domestic work like washing clothes etc. Now the washing machine washes the clothes, which takes 15 minutes of human labor instead of four hours, and the labor is then spent working a job that does something else. Meanwhile the family has more money, which allows them to buy those same additional products and service now being provided.
And yet this hasn't happened. The surplus went somewhere else. You already know where:
> You mention some regulatory overhead being eliminated, but more often than not, a surplus of disposable income enables passing further regulatory requirements that improve (or at least purport to) safety or quality of products and services
It "enables" that to happen, but we as a populace are not actually required to do that. And when we do, the overhead eats the surplus. So maybe we shouldn't?
> If I parse this correctly, then the latter is definitely the case. Real estate is the prime force that eats all surplus disposable income.
Oh, absolutely. This is why uncompetitive markets are a problem.
Real estate is an unusual case, because the really isn't anyone with a monopoly on real estate. The supply constraint comes directly from the government through zoning rules. We effectively have a cartel whose board of directors is the zoning board.
In a free market, if wages go up, people who had been living with their parents will want to get their own place, so they would use the extra money they're making to do that, and the extra money would pay construction companies to build more housing. But if that's prohibited by law then the extra money only goes to bid up the price of existing housing, people don't get housing who didn't have it before because new housing is not created, and the money just goes to landlords.
That is an independent problem that we badly need to solve, because it isn't just a problem when people make more money. If you get more benefits, the same thing happens. If companies all start providing free daycare, people save the money they'd been using to pay for daycare, they want to use the money to get their own place, rents go up. If prices go down, the same thing happens. Computers get cheaper, you can get a suitable one for $400 instead of $2000, landlords take most of the difference. This needs to be fixed or it eats any surplus that would otherwise go to the middle class. It's a huge problem, but it's a solvable problem. Build more housing.
And either way it doesn't affect whether you should prefer cash or "benefits" as compensation, because when a market with an artificial supply constraint is eating the bulk of any surplus, it would just as well eat the surplus created by benefits too. At which point we're back to "money is better than arbitrary stuff" because turning money into stuff you want has lower deadweight friction losses than turning stuff you want less into stuff you want more.
It happens basically everywhere, even when the rules are different. If I understand correctly, the primary limit in the UK is there's not enough builders, which is not to say the government isn't in the way as that's despite it also having constant planning issues with regard to the "green belt"; likewise in modern Germany, my understanding is not enough builders (and again yes the government could be better because bureaucracy is very slow, but they're not the limiting factor); likewise DDR (not even trying to be a free market) where the government was organising the construction work and trying to do it cheap and fast but there still wasn't enough.
After a while, the governement wanted in, joined the verbonden to landsbonden (Country level insurers grouped by world view) and put themselves in the money stream.
The end result is Belgium having a weird construction half way between private health insurance and country-level health insurance.
Co-op is the word you’re looking for. These co-ops went far beyond just healthcare after all. They owned bakeries, pharmacies, entertainment facilities for the workers, …