- No healthcare costs. Scraped elbow? Free. Brain surgery? Free.
- No saving up for college for my kids.
- 30 days of vacation + ~13 public holidays.
- No student loans (kinda-sorta, most people borrow money to not have to work during college), tuition is free in all universities and colleges.
- Goverment-paid pension savings
- On top of my salary, my employer also pays for
- all insurances
- 31,42% payroll tax (which I never see and is paid on top of my negotiated salary)
- 10-15% of my salary is put in another pension savings account. Again, this is ON TOP of my salary.
- private health insurance to fast track me to a specialist.If you can't afford healthcare at all, they will bill you but you don't have to pay and they can't turn you away from a hospital emergency room. So basically government mandated free healthcare provided by private companies.
The problem is the lower and middle class, if you don't have insurance but do have something to lose, or if you have minimal insurance and a large medical issue, you can lose all your assets paying for healthcare.
What you said that's really interesting to me is that the high tax rate is paid in full by your company and not counted in your salary. Is that true all over Europe, like France for instance? I am always amazed by the really low salaries but if every bit of it is what you actually keep, it's not so bad. I didn't know it worked that way.
a) What if you're self-employed? You're stuck with mediocre, expensive healthcare for the individual market.
b) What if the company is cheap or negotiates poorly the healthcare options? Sometimes they're mediocre.
c) Costs have been going up, and companies are finding ways to reduce costs (since someone has to pay for those padded healthcare executive salaries and healthy stock prices thanks for solid profit). Thus the same plan(s) get worse year after year.
d) there's a push towards 'high deductible, self-managed / pre-tax account' type healthcare, which is smiled upon as a fantastic way to give people choice. The reality is different, now not only is the healthcare company still the middleman that keeps a chunk that gets paid out to providers, but now it's up to you to 'negotiate' what healthcare service is important to you. Oh gosh, is it expensive? I'll skip this particular service.
The U.S. has got it all wrong, of course. I'm jealous of Swedish or other healthcare systems when I read through threads like these.
Bottom line: the mediocre healthcare system in the U.S. and the emphasis on giving middlemen lots of money for no reason is a barrier to innovation and self-employment. Why strike out on your own and take a risk on building something if you'll lose your precious company healthcare? This problem is only getting worse and clearly has an impact on the political discourse.
I ran my own small business, provided great healthcare for myself and a couple of employees, and managed to have good healthcare after I shut the company down and was unemployed for a while. I had to do a little research and make a couple good decisions, then it wasn't an issue. And that was before the Affordable Care Act, which provides free healthcare in many states for people who can't afford it.
The one thing is, if you are not working for a decent company, yes, you have to think about it and prepare for it before hand, it isn't all taken care for you without you doing anything. So I say, for the vast majority of people on HN it's not that bad.
And worst comes to worst, you are being irresponsible or have fallen through the cracks, and you get into a car accident, the hospital is going to take care of you anyway.
Well, in my state the individual market is tied to the state healthcare marketplace, and all of these are PPOs. At the worst, you'll pay $1200 a month for a plan whereby you have to stick to a finite network, and get approval every time from the primary care provider. And there's still a several thousand-dollar deductible. Even if I chose to offer $2000 a month for a plan that's a more open one, there's nowhere to give that money to someone.
I consider that a barrier to innovation / entrepreneurship because many people don't want to quit cushy jobs as employees for a situation like that.
It is most certainly not how it works in the UK! However for balance I should say that the employer does pay some tax and pension costs on top of your salary (employers NI and auto-enrollment pension). Whatever the advertised cost, you will be deducted tax and National Insurance by your employer.
So you get 30k before tax, 20k ends up on your account after tax deducted per month, and company pays state 30k more on top of the other 10k.
- No saving up for college for my kids.
- No student loans tuition is free in all universities and colleges.
- Goverment-paid pension savings"
It's a little disingenuous to talk about all those 'free things' that 'others' or 'the government' are paying for, because it communicates that those costs are magically externalized.
They are not, of course.
Citizens are paying for all of those things through very aggressive taxation.
Denmark has basically the highest degree of government participation in the economy in the world. [1]
Taxation in Scandinavian countries run deep.
Swedens top tax rate is 67% (!!!) though this includes social security. Payroll tax (employer side of social security) is about 30%, deducted before transfer to employee. And then after you take your money home, you pay an additional 25% VAT on everything you buy.
Think about that: Swedish company allocates $100K to employee. ~30% deducted for SS, so employees income is really $70K. Now, you pay up to 66% of that in taxes (not at 70K, but for higher income earners - certainly a lot of Google folks would!), so say 50% taxes, 'take home' is now $35K. Now, you pay 25% taxes on everything you buy. Assume people save 10% conservatively, meaning $31.5K in spending, which is about $6 VAT taxes.
So from $100K in comp, you're paying $70K to the government.
In the US obviously it would be considerably less.
I know all this has been argued before, but it's important to consider how aggressive that taxation is, I don't think it's ever fair to talk about 'no student debt' or 'free healthcare' without taking into consideration that level of taxation.
The real issue is the cost vs. quality of things like healthcare.
Now - in Canada, we have similar levels of taxation as California or New York and we get healthcare out of that, so now that's something to talk about ...
[1] https://data.oecd.org/gga/general-government-spending.htm
[2] https://tradingeconomics.com/sweden/personal-income-tax-rate
Sweden of the Scandinavian countries is the odd one out. The serious hardworking big brother. They always had big companies (IKEA, Volvo, Ericsson) compared to Denmark and Norway. Far stronger engineering tradition. Self-sufficient with nuclear plants, weapons, automobiles and so on under the cold war. Far more open to immigration. Bigger difference between rich and poor. Better and deeper financial markets. More hierarchical.
This applies only to native Swedes. As a foreigner, even EU national, it's trivial to end up overboard of the social security net. Beware of tollerating low compensation fed by the "we'll hold your back" cliche. The same situation in Germany.
I love it here, but I operate under the assumption that I'll have to provide for myself in retirement.
> One thing that should be emphasized when comparing salaries between Sweden and other countries is how there is a secret tax baked into the Swedish salary -- arbetsgivaravgiften.
> Basically, in all other nationalities (to my knowledge), you are quoted how much the company will pay for your salary. Then tax is applied, and whatever is left is what you take home. In Sweden, you are quoted an in-between number. If you are offered $100k before tax in Sweden, that means the employer is _actually_ paying something like $143k. You will still not be getting $100k, but rather that is the "taxable income", so you end up with about $70k, but your employer paid $143k, but you agreed on $100k. Makes no sense.
I used to think like you, with this idea that Swedish salaries are substantially lower -- but if you use the true tax, salaries are actually comparable.
Basically, in all other nationalities (to my knowledge), you are quoted how much the company will pay for your salary. Then tax is applied, and whatever is left is what you take home.
In Sweden, you are quoted an in-between number. If you are offered $100k before tax in Sweden, that means the employer is _actually_ paying something like $143k. You will still not be getting $100k, but rather that is the "taxable income", so you end up with about $70k, but your employer paid $143k, but you agreed on $100k. Makes no sens.e
I suspect it's the same for many countries - though with different percentages. And yes makes comparisons very hard.
Update: looking at this comment - this is not unique - same in Croatia: https://news.ycombinator.com/item?id=17941203
Yes, it complicates things, and makes comparisons a bit more difficult. But it makes sense.
In the USA, depending on the company, you will have to add in healthcare as a "cost to company". That's basically included in the Swedish taxes.
Plus you have to normalize culture and employee protection/rights.
In the USA it's not abnormal to get 2 weeks of vacation per year, less than a week of "paid parental" leave, and be expected to be available to answer emails while you're on your paltry vacation. You can be fired at any time for any reason or no reason (in most cases and states you are an "at will employee")
In Sweden, this work:life balance would be preposterous. Employees get 6+ weeks of vacation a year, over _1 year_ of _paid_ parental leave, working healthcare, subsidized childcare, etc. You cannot be fired without cause and notice.
In the USA, other than social security (which is another topic), employees get very little back for their taxes. But we have a lot of wars to pay for.
You need to look at the big picture when you compare these numbers.
You get quoted what you get paid, and you pay tax on that.
That's rational.
It's just that they way 'employer taxes' are calculated is a little different - and in Nordic countries they are massive (thereby making it feel 'hidden').
VAT when baked into prices is also kind of hidden as well.
Part of it is cultural, in that there is still a widespread perception that software engineers are fungible cogs and that no one could possibly be worth that much more than the average technical worker in any other industry -- they value the contribution like industrial labor. I do a lot of work in Europe and many business people find it inexplicable that any software engineer could be worth a senior manager's wage.
The second part is that while wages are relatively low, the cost of employment is astonishingly high in many European countries. Consequently, the fraction of employment cost that gets delivered to the worker as wages is much smaller, all other things being equal. From an employer's perspective, the employment costs are much closer than the paycheck suggests. The company only cares about employment costs, not wages per se. This is unlikely to change anytime soon because it is a manifestation of the social labor ethos common in Europe.
That being said, I suppose I'm a little hypocritical because I live in Europe and work remotely for a US company. I was already doing fairly well (not astronomical) by local standards but got a 40% raise by just being normal by US standards.
It makes me wonder why there isn't more entrepreneurship here. Labour is cheap and if you fail you're unlikely to die in a gutter (at least you have health care). Hell, even commutes are better for the most part. It should be easier to start something in Europe than in California, not harder. Maybe I'll give it a shot after naturalization.
I could probably make 50-100% more somewhere else but I’d likely be working much more. What’s the hourly pay difference?
IT salaries here are much better than western Europe compared to other professions and it's not worth migrating.
I've interviewed for jobs in Netherlands, Belgium, Denmark and Germany and the highest offer was 75k € for job in Brussels region.
According to online calculators thats 40k take home salary with housing and services at least twice as expensive. My 50k € Croatian salary leaves me with 33k net with vastly better quality of life.
Why are western Europe's developers paid so little while living in much richer countries?
On the flip side: I know a few people who turned down opportunities to go work in the US, or who went there and came back to Europe after a few years. Having not worked outside Europe, I'm always curious about discussing the various pros and cons, and although the pros were fairly obvious (good weather all year long, astronomical salary, etc.), one of the cons listed was invariably "I have to live in the US". Exactly why this was a con changed from person to person, but it was always there, and couldn't be accounted to long distance since countries like Japan or Singapore were fine.
I'm going to hazard a guess and say that there's something intangible (which could probably be best ascribed to 'quality of life', as vague as it sounds) that makes very competent people stay in or go back to Europe, and this limits the brain drain somewhat and maintains competition for lower wages on this side of the Atlantic.
Pro: The weather is fantastic. Running a sole proprietorship is easy.
Con: Everything else. I'm absolutely not growing old in this place, and I will definitely move back to Europe before I retire.
BLS, US median for programmers:
82 240 USD/y
https://www.bls.gov/ooh/computer-and-information-technology/...
Engineering Union, Sweden, median for union programmers:
61 416 USD/y, as reported.
80 719 USD/y, including payroll tax.
I believe other European countries could report data in a similar manner. The employer cost is similar.
https://www.bls.gov/ooh/computer-and-information-technology/...
103 560 USD/y
about 25% higher than swedish pre-tax and taxes are a lot lower in most of the US
US gdp per capita ppp is 54k vs. 37k for EU, so 45% higher, its unsurprising salaries are higher
Never heard about a distincion between a developer and programmer. Seems to be a distinct BLS category.
I don't really trust these fantastic Silicon Valley wage statistics. There seems to be bad coverage over a wide range of companies, and it mostly seems to be self-reported in a non-organized way.
BLS collects a wider range of statistics than PayScale or what not the HR departments are spamming with good reviews and salaries.
https://www.huffingtonpost.com/entry/silicon-valley-salaries...
To even base an article on those numbers is borderline fraud.
For "San Francisco-Redwood City-South San Francisco, CA Metropolitan Division" BLS reports $106k mean wage for programmers.
https://www.bls.gov/oes/current/oes151131.htm
Swedish Engineering union reports mean wage:
69 543 USD/y in Stockholm
91 400 USD/y including payroll tax.
So the difference is 1.1k USD more a month for the median Bay-area programmer compared to Stockholm in employer cost. It's not really raining VC money over the SF area programmers compared to e.g. Stockholm, where there is more or less none VC money.
To be fair, Europe and the more able governments are making up some of the gap through grant money. Although this leads to a cottage industry of funneling government money into others pockets, whether it be through companies that help you apply for the grants or just bullshit startups that aren't properly vetted.