I agree that engineering salaries are much higher in the US than in Europe and other non-US countries, however it's worth considering that there are additional expenses to hiring in other countries. My french salary is ~30-40% lower than I was making in the US. However, my cost to my employer is nearly as high. Employer taxes are much higher, my company is required to reimburse my transit and all-but-obligated to cover lunch as well. Certainly, many US software companies do some/all of that, but not all.
And beyond those pure costs, there are more liabilities to the employer. For instance, if they want to fire me, they're legally on the hook for four months of severance. And, I get ~7 weeks of combined vacation time and "comp time" (based on the fact that I work more than 35 hours a week). In the US, I got 2-3 weeks.
I don't have exact numbers, and I don't disagree that there are potentially savings to be had, but I don't think it's nearly as clear cut that you could get anything close to twice as many developers.
It's not 100% accurate (the exact amounts depend on many variables) but gives a good idea. For example, a cost to the employer of USD 100k (87460€/year) gives a before-taxes salary of USD 70.5k, and a salary after all taxes of USD 47k.
What!? That's over 30% of your income gone, and for a relatively average income. That's not even counting VAT and other taxes.... No wonder there's so much "free" stuff in Europe.
And yes, taxes and cotisations are very high. On the other hand they cover most higher costs and risks in life (education, health, basic retirement…).
Still, €61k isn't an average salary. An engineer reaches that after about 10-15 years (from personal experience and some statistics I have access to). It's double the national median.
How does rent and food costs compare to America, do you know?
However the safety net is much more beneficial for less-paid people, at a relatively low cost for them.
I only visited the US so others might be able to provide a more detailed comparison. It seems to me that rent is generally significantly higher in US cities (might be different in lower CoL areas), and groceries and other smaller budgets were slightly higher in France (restaurants, tech purchases, cars…).
US healthcare and education consume a vast portion of your pay. We paid cash for our daughter's college (biomedical engineering) at a total of over $300K. That buys her freedom of choice when it comes time to take a job, get an advanced degree, etc. Her colleagues will have more than $500K USD debt hanging over their heads when you factor interest payments.
The company pays for a portion of health insurance, but much of the cost is picked up by the employee, either though co-payments or deductibles.
We live modestly, drive low-end cars and don't dine out often. We see our European friends taking great vacations and their children bounce in and out of college programs. We see free healthcare, mountain cottages, and other perks unavailable to us.
The median salary here is about £21k nationwide.
I bought my home for £170k, now worth about £230k. it's a decent sized apartment in a nice area in the city where I work. For an indication of size, my living room is about 23ft by 28ft, 2 bedrooms, 2 bathrooms.
Some photos to show what I got for my money:
https://imgur.com/gallery/6oNLRtl
My outgoings each month average out to around £1200k. Mortgage is under £450 a month.
Healthcare is all free, university is free, prescriptions are free.
Some perspective on the costs that look "scary" for the people outside of the USA. I'll share some personal data based on my 20 years since moving here. I have started with $60K and now I am making close to $250K. All this time I was living in a median cost area (one of the top 20 US cities, east coast).
My average effective tax rate over the last 20 years is 19.6% (this includes federal, state, social security and medicare taxes)
My average medical expenses for a family of four are at 3.6% of my gross salary (includes health/rx/dental/vision insurance premiums and out of pocket expenses)
I've paid cash for my oldest child's education at top 10 public university - ~1.5% of my earning over the last 20 years. I am expecting to pay similar cash amount for my other child.
We live in a 4000 sqft McMansion near the best public schools in the state. My mortgage is ~$820 at 2.5% APR
It does look like your effective tax rate is 31-35%, which is more than my all-inclusive rate of ~24.7%
When I renew at end of year it shoul be around 1.1%
That's nominal - 3.5% - 4.0% is the effective interest rate. I don't know much about mortgages, so not sure if I'm missing something. Congrats on your place - it looks great!
You could imagine that inflation pays ~1% of your mortgage for you because each dollar that you owe is becoming less and less valuable.
I just mentioned it for the sake of providing more information to whomever was reading my comment.
https://www.investopedia.com/articles/investing/082113/under...
Average salary (take-home): $11874
Average salary (total cost for employer): $19875
Median salary (take-home): $10225
Median salary (total cost for employer): $16526
Starting junior dev salary (take-home): $14800
Starting junior dev salary (total cost for employer): $25800
Senior dev salary (they can go higher, but that's relatively rare for local employers) (take-home): $27700
Senior dev salary (total cost for employer): $52000
VAT is 25%. Safety net is a joke. Health care is universal, but not that good. Education is mediocre at best.
I'm not so sure. It looks like the average liability for a family (12 monthly premiums plus deductable) comes in at just under $23k[1]. That's the max the average family would pay. Obviously for just a single person total liability is a lot lower.
So for a person like me who makes good money being an engineer, I am still better off in America where I can make a lot of money but also pay a little more in COL / healthcare stuff.
[1] https://www.ehealthinsurance.com/resources/individual-and-fa...
If you have a few kids, I would bet you are not that bad in UK with one fewer digit.
But I'm talking from the employer side, not the employee and why they would employ US devs who cost twice as much
So as long as a US job pays 18k more, it's pretty similar.
People talk about vacation, but my job pays so much I'll take months off between contracts. (Engineering)
Also it's hard to compare lifestyles in the US vs Europe. Homes in the US are gigantic, often newish, and have Air Conditioning. Cars in the United States are more feature rich and have higher safety standards (when I was an airbag engineer in 2015)
But you have to think not only about you but also the others. I don't know whether you have children or grandchildren , but if you do I'm sure knowing that they will never have a bad situation is pretty nice. You can't expect all your children and grandchildren to have a well paid job and you can't finance all of them forever.
But do you want your child to immigrate because you live in a country of selfish people? I'm sure you would find the situation difficult.
By the way, the communities you are mentioning in France are French since a few generations and not foreigners.
Where? How? I... this total is about what I’m seeing for shit-tier covers-nothing insurance. Like, there are plans out there that are HCA non-conforming and not that far under $18k/year just for the premiums. Who do I talk to to get total max healthcare spending of $18,000 without an employer-provided plan, in the US? Who’s offering $12,000 annual max-out-of-pocket family plans for $500/m?
$3,600/yr individual, $0 deductible, 8k OOPL
$9,600/yr self + spouse + kid, $0 deductible, 16K OOPL
$12,000/yr self + spouse + 2 kids, $0 deductible, 16K OOPL
Although I don't really think it makes sense to compare costs based on OOPLs. For most people, the deductibles, coinsurance, and copays are much more relevant to actual costs.
Presenteeism.
The office "has to" be in Silicon Valley. The employees "have to" be in that office, in an open plan, so the manager can physically see them working. Therefore they have to be paid huge wages to compete against the other employers doing the same.
It boils down to real estate prices combined with some companies really really really wanting those people to be on site.
I had my highest rate ever during a brief, beautiful moment in Switzerland where a studio apartment costs ~$2000 per month.
I choose to think that this rate is how much our work is actually worth - otherwise those companies couldn't afford having people on site.
I think the real issue is that homeowners vote so much more frequently than renters (who would love to have more housing and lower rents), even though they're technically outnumbered.
I don't envy the locals though. I spent 2,5 months in Zurich, during which I saved so much that in pre-corona times it would be enough for the minimal allowed down payment for an apartment.
The Swiss don't have a Switzerland of Switzerland where they could pull off the same trick.
Why hire a US union member when you can hire an Eastern European who both works for peanuts and doesn't have union hang-ups? (Admittedly outsourcing has its own problems, especially when there are language/cultural barriers)
So yes, lots of American companies already outsource to East Europe. There are lots of "Silicon Valley"s across EE thriving on Western outsourcing from companies who aren't quite desperate or cheap enough to go to India.
At this point in my life you would have to pay me around six figures for me to do CSS seriously on a daily basis (and it’s likely I’ll still burn out and leave). The cross browser and device testing alone is so tedious and stress inducing that I simply won’t do the job below a certain price point (or I will out of desperation but definitely will bounce ASAP). The unsaid thing about doing heavy CSS work is that it doubles as a QA job from all the testing required.
And again, I’m someone that’s good at it. You can’t pay me enough to do it, not if I have choices.
I think we've already experienced the race to the bottom and come out the other side, with $24 being fairly average for the world and the US being on the high side. This all happened years bacj when companies started outsourcing development and IT to India at rock bottom prices, but then received a lot of low-quality work (you get what you pay for). I believe India has a much different approach to software quality than many other countries.
It's taken many companies years to realise that mistake, but I wouldn't call $24 a race to the bottom for skilled labour as that will land you comfortably above average income in the UK
If not, never ever show bitterness for your fellowship that brought honor to the profession, wherever they are.
I hope never to see developers disrespected that way, anywhere in the world.
If I look at the equivalent compensation for people who work for me, the vast majority of developers in the UK and US earn > $100k. Like for like the US employees earn more but that's almost wholly swallowed up in other costs (basically healthcare and our US healthcare plan isn't particularly bad).
And the FAANGs and hedge funds, in my experience, have a reasonably similar dynamic.
The simple fact is that we generally don't hire for PL knowledge except in very specific circumstances (KDB for example). If all we wanted was a coder, there are much more cost effective options than hiring someone, regardless of location.
Which countries would you suggest for this?
Just the UK?
Sometimes I wonder why companies even pay developers so much in the US. I'm a specialised medical embedded software developer in the UK and I'm not even halfway to six figures, and will likely never hit it.
It astounds me that companies don't hire twice as many non-US developers for the same price and get more work for their money. Note, I'm not talking about outsourcing to the absolute cheapest bottom of the barrel developers who cost 1/20 of the price and the quality reflects the price. Just equally skilled developers in non-US countries.