"Supply and demand mostly. The EU means companies have access to vast pools of talent across the whole bloc and beyond."

I don't think that's it.

I was looking for work in Europe 20 years ago, and they had very few tech people there back then compared to the US, and were desperate to import talent from other countries. However, their salaries were still very low compared to the US.

I would seem they weren't desperate enough, would it not?

From Wikipedia [0]: A demand schedule [...] represents the amount of a certain good that buyers are willing and able to purchase at various prices.

That demand is large at low salaries but low at higher salaries just means that demand isn't very high (or as high as it is in US).

[0] - https://en.wikipedia.org/wiki/Supply_and_demand

Maybe so, but 20 years ago it wasn't a case of having "vast talent pools" in the EU, as they just didn't exist.

Also, there are limits to what companies can afford to pay while still having a viable business model. They can be maximally desperate for talent, but still limited to paying only up to a certain amount.

> Also, there are limits to what companies can afford to pay while still having a viable business model. They can be maximally desperate for talent, but still limited to paying only up to a certain amount.

That's part of the demand curve, as commonly understood in economics, even if we might colloquially say that "there is a large demand".

If there was high demand then we would see salaries rise quickly year over year.