Comment by dauertewigkeit | Hacker News Reader

Comment by dauertewigkeit | Hacker News Reader

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I know what they want to say, but I think their argument is quite weak, because essentially you have US industries that aren't tech. American workers still get higher salaries than elsewhere in the OECD and growth in such industries isn't out competing those same industries in other OECD countries. In fact many industries are lagging behind. So actually US workers are being paid more not less than elsewhere.

Then you have tech. In tech, US workers are again paid more than in other OECD countries. But growth in tech is just insane and it makes a huge percentage of the GDP growth. And there aren't a whole lot of tech workers as a percentage of the total workforce. So although tech workers are paid a whole lot more than in other OECD countries, they aren't capturing as much of the growth of the tech industry.

So really this is an argument that tech workers in the US should be paid even more, and I don't think that sells so well as the populist argument that the authors intended to make.

And to me saying, that an autoworker that works for Ford, is not capturing the GDP growth that is generated by Google, is nonsensical.

> American workers still get higher salaries than elsewhere in the OECD and growth in such industries isn't out competing those same industries in other OECD countries.

I used to think that also, probably because FAANG salaries had skewed my perception, but after looking at the data, this does not seem to be actually true, at least not in general.

For example, Germany has a somewhat higher annual median gross salary for full-time employees than the US (PPP-adjusted, BLS/DESTATIS salary data, OECD PPP values).

Of course, this is the median salary. America absolutely offers higher salaries at the top end (and I mean much higher, often by a factor of 2-3 for highly qualified professionals, such as software engineers and doctors). But that also means correspondingly lower salaries at the low end. And of course, labor is taxed heavily in Germany, so discretionary/disposable income may look different in the end on a case-by-case basis.

My expectation is that Germany has higher taxes than the US. What happens if you look at median net salary rather than gross?

First of all, yes, labor is taxed much higher in Germany than in the US (PPP adjustment already takes VAT on prices into account, so that doesn't matter in this case). In fact, Germany has one of the highest taxations of labor in the world.

What makes this analysis tricky is disposable vs. discretionary income. The US clearly comes out on top when it comes to disposable income (labour is taxed too much in Germany compared to capital income and wealth).

The picture gets more complicated when you look at discretionary income, which also accounts for regular bills, such as rent, college tuition, out of pocket expenses for health care, childcare, and such. All the taxes you pay in Germany do also pay for something, after all. There is unfortunately very little data for this type of comparison.

You would also need to adjust for the huge medical expenses Americans face if you are doing that as Germans don't have that. Maybe the 401K savings Americans do for retirement (if Germans have a better societal retirement payout than Americans). And the other social benefits that are accounted for by German taxes that Americans still have to account for in some way. You can't just lump those in on the Germans and not account that Americans pay it some way as well.

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