* Comfortable retirement - 401k contributions. Yes America has social security but it's not a ton of money compared to other national pensions and if you're young you worry about it not being around at all by the time you need it.

* Unemployment - You should probably have ~6 months living expenses saved up, if not a year, in case you get laid off. U.S. unemployment benefits are fairly marginal (~700 per month cap when I used them in 2002, which you owe tax on), especially compared to Germany/France.

* Life insurance - If you have kids and/or a non working spouse you need to make sure they will be OK if you die, since we have such a weak social safety net.

* Education for your kids - 529 and educational IRA plans allow people to save for our increasingly expensive higher education even before the child is born (I-Bonds can be used this way). Cuts to public colleges have been harsh this year so don't think those will save you.

Yes many Americans blow their salaries on dumb consumerist crap, and tend to overinvest in things like real estate. But even the prudent ones will be trying to jack up their salaries because there are SO many things you are supposed to save for to be considered a responsible American adult.

* Healthcare - Health insurance is often a luxury in America. The elderly have Medicare, but there is (currently) no safety for most citizens.

* Public transportation - Many US cities don't have adequate bus service. Just anyone who lives outside NYC or a college town will need a car.

In Germany and many European countries, you pay for healthcare and it costs a lot -- you simply don't have the option of not having healthcare and the cost is proportional to your income rather than your health condition. Also note that the employee caries the full cost of health insurance as opposed to the employer usually covering it in skilled professions in the US.

The social security model is also somewhat similar: you pay (high) social security taxes and get money back based your contributions.

Unemployment, also like in the US, is pretty sane if you're a full-time employee and are fired. You don't get it for several months if you quit on your own and if you haven't payed unemployment taxes, you get put on unemployment that's just at the edge of livable (housing costs + about $500/month).

And note, those taxes come after the lower salary. A pretty common take-home salary for a European software developer would be $3000-4000/month.

And really, how many 20-somethings that complain about the cost of living are doing it because they're stashing away too much in their retirement fund?

Public transit is a valid one, but then, the two highest paid areas for software developers in the US, New York and San Francisco, also have quite good public transit. (Not to mention that a one-month pass costs $100-200/month depending on the area.)

The truth is that I've heard people say that while they eat out every day, have a new car every couple years, live in swanky places and spend money on a constant stream of new gadgets. Americans also have a weird fetish that you don't find other places about buying homes in their 20s. While there are some valid reasons that make the total cost of living in Europe comparatively lower, I'm really not convinced that's the core of the difference. It's just that people quickly grow into their incomes and start seeing things as essential that aren't.

That said, I'm not sure about Germany being approximately as rough as the U.S..

* Retirement - Our benefit is well under half of yours. The _minimum_ German pension, the floor, after reform will be 67 percent of national average wage (cites below). In the U.S., the average social security benefit is $1,153, annualized to $13,863 or about 34 percent of the average national income of $40,711.

So our _average_ govt. retirement benefit (34%) is about half of your _minimum_ retirement benefit (67%). In fact, the maximum U.S. benefit of $2,346 is just 69 percent of national income, i.e. the current German minimum (!) (it will go down to 67 percent under the current reform).

[German data: http://www.economist.com/node/618334 ] [U.S. social security benefit data: http://www.aarp.org/work/social-security/info-07-2010/maximu... ][U.S. wage data: http://www.ssa.gov/oact/cola/AWI.html ]

* Unemployment - (-edited thrice-) The average is 47 percent of wages in U.S. vs 60 or 67 percent in Germany depending on if you have kids. Germany is still more generous. [German data http://www.oecd.org/dataoecd/9/54/29730499.PDF http://www.justlanded.com/english/Germany/Germany-Guide/Jobs... ] [U.S. data http://www.cbpp.org/cms/index.cfm?fa=view&id=3394 ]

If you are right about "housings costs + 500 per month" this is, indeed, be about in line with U.S. benefits which average $300 per week (~1300 per month); our housing payments average $684. Not sure how to reconcile that with the 60 percent figure from OECD and elsewhere.

For unemployment the housing costs that are reimbursed are "reasonable" costs, not "whatever your costs are", i.e. they're capped per region. The 60% you're seeing there is for those who have paid for "Arbeitslosengeld I", which is only available to those who have been full-time employed and are terminated (though if you quit on your own, you're eligible after 3 months). Freelancers, recent grads, business owners, etc. are not eligible for "ALG I". There's also a time limit on how long you can receive it.

For anyone else it depends on how long you've been employed before applying for unemployment support. Been employed for longer than 24mo? You get 12mo support. Been employed for only 12mo? Then you get only 6mo of support.

In Germany and many European countries, you pay for healthcare and it costs a lot

But, from the studies I've seen, Europeans on average spend about half in terms of healthcare.

New York and San Francisco, also have quite good public transit

No, they simply have public transit -- it's not great by any means. You often have to supplement with taxi in both places. (The rates are high there because costs of living are very high in both places.)

Unemployment compensation in most European countries is vastly better. Free university systems? That's nice. My point is that we know it's not all rainbows and unicorns in Europe but you can't argue that you don't get a whole lot for those taxes.

Citation needed. 99.9% of the time I was lived in NY, I used public transit instead of taxis. London and France? Underground stops running close to one and so anytime I tried staying out late I needed to walk, take a night bus, or hail a cab (which is near impossible on a Friday night).

Bart closes at midnight and has four stops in the heart of SF. NY has an OK metro but if you want to go cross-town, better just walk. I've spent time in NYC and lived in SF, Zurich, Berlin, Prague and London. Europe destroys on this topic. A huge percentage of people in Europe, like myself, don't own cars simply because we don't have to.

Saying it's no contest is a huge exaggeration. I won't argue that BART/MUNI is better than other transit systems, but I still get around without a car.

That said, the fact that transit closes in London and Paris while New York doesn't is a major advantage. It's actually precisely the reason why I have been able to not take a taxi or have to walk home in the early morning. And in NYC, a lot of people don't own cars because they don't have to either.

And a lot of people in NYC don't have cars simply because they can't afford to park them, not because available mass transit makes them unnecessary.

I would not say the Bay Area has great public transit. It just has some public transit, which is more than you can say for a lot of California.

And you use the same old Oyster card as during the day. I assume it's just as cheap - 80p or a pound per ride? Cheap enough that I don't even keep track.

I agree with the GP - the overnight services outside of limited routes in NYC aren't flash, and most of the rest of the US metro areas are appalling.

This is fueled by the social taboo of living at home with your parents/family and the availability of mortgages.

Renting gives you greater mobility too, which can be used to maximize income.

What did you do with the money you would have saved?

if you spent the same in rent, you would have lived in a 2-3 bedroom for 20 years, moving every time you changed jobs

20yrs is a LOT of time to be living in the same place you can afford downpayment when you are 20yr old. and a LOT of time to work/study on the same area

On the other hand, the S&P 500 returned 8.25% annually between 1993-2006. Say you put 10% down ($8500) and spend $800/year total on taxes, repairs, etc. (probably low). If you'd invested in an index fund, you'd have made $42,000.

And also likely have moved several times at an average cost of around $2000 per move, seen rent increases above what his current mortgage is and so on. The odds are poor that all other things would have remained equal. I owned a house at one time. I benefited by about $2000/year over the time I owned it. When I refinanced, I got my escrow back and had no mortgage payment for a month. Then my payments after that were lower. No landlord in the world is going to drop by your apartment and leave you with a nice hefty check, say "Don't bother to pay me rent this month and, oh, next month your rent is going down. Cheerio!"

I used to live in Britain. After having gone to doctor a few times there, I'd rather have the customer-pays model of America. I was just pointing-out that it's (obviously) expensive over here.

So our anecdotes cancel out :-)

There are a few problems, but there is no perfect health system as there is always more demand than supply.

We Irish have for a long time tended to avoid carpet in bathrooms, but maybe we just don't piss as straight.

(Admittedly, the NHS is not the best health care system in the world, but then we spend less on it than other countries do as a proportion of GDP.)

Comparing apples and oranges, or rather, the ecosystems that produce apple trees vs the right ecosystem for growing oranges?

These discussions just go around and around. I vote that we ban them in favor of people who want to know what it's like in Europe vs the US buying those of us who have spent significant (more than 2 years) on the other side a drink, while they listen to our anecdotes.

The fact that from an administrative POV, some part is split between the employee and employer is just that: an administrative convention, but don't be fooled by it.

I guess it depends on your definition of software developer, but my sister's Austrian boyfriend (a software engineer) makes less than U$ 4.000, and so do some of my Magic:the Gathering acquaintances.

Granted, they're in their 20s and will probably command higher wages later on (I hope :) ), but I do know of a guy in his 40s making less than that in Vienna as well (working for IBM)

It's just that Europeans have lower income, so they do not buy things that wealthier Americans do. Europeans on average are driving smaller and older cars, they drive less. Other things you mentioned - Europeans are buying less gadgets.

Who's making the right choice is hard to say. Does larger house worth more than long vacation? The answer depends on who you ask.

Even within a given country, the cost of living is very spread out (London and Paris are extremely expensive compared to the average of their respective country for example).

The freedom of being able to go wherever you want in a heartbeat in a car is highly overrated. Call a taxi for those times when it's actually urgent.

But once-an-hour does not a transit system make. There's a false dichotomy here - the choices aren't car vs. shitty transit. We can very well have good transit (i.e., arterial mass transit with frequency of every 10 minutes or better).

The problem with infrequent transit, particularly arterial routes, is that it completely wipes out the possibility of transfers. When your frequency is once an hour (with a high variance for on-time performance), people cannot rely on the transit method for making connections. Moreso, decreasing frequency increases total trip time for most people by a factor larger than the actual frequency drop (which is to say, a decrease in frequency of an arterial route results in a very large increase for most whole-trip times). A highly frequent (i.e. every 10 minutes or better) trunk line is the bed rock of any mass transit solution, and is absolutely non-optional.

We have this idea that Americans don't use public transit, because they're infatuated with their cars. To a degree, we are. However, we also hate the work commute. The reason more don't use public transit is that it is not feasible for the average person to spend so much time sitting on a bus or train and making two or three transfers every day twice a day . . . on top of work. Especially if they have a family.

The idea of tighter communities where people work near their home is fantastic. Too bad we've already built our cities and roads and housing tracts, though. It's a thought for another bustling economy that is just starting to build out their infrastructure in the 21st century instead of the 19th and 20th century to do, though. We've already built our mess.

Actually, there is, it's called medicaid.

What? You make too much to be eligible for medicaid? That tells us that you don't need the safety net that it provides.

And, even without medicaid, it's possible to get free health care for fundamentals in the US. No, "free" doesn't cover everything, but no healthcare system does.

I get a little tired of hearing this. Study after study after study indicates that diet and lifestyle play a major role in all major deadly diseases. I was an American military wife for a couple of decades. Even after my divorce, I was entitled to free medical care at tax-payer expense. I did nothing to try to preserve that entitlement* because I was too busy making the dietary and lifestyle changes I needed to make in order to get well when I was told by some specialist that I would never get well. Eat right, exercise, don't smoke, don't drink to excess and all that other boring advice no one wants to hear and you greatly reduce the odds that you will need expensive medical care.

* And I'm saving the American public quite a lot of money because my medical condition is one of the more expensive chronic incurable conditions out there. It annoys me that it's all coming out of my pocket to get well but other folks would happily pay through the nose to help me stay sick and keep me a lifelong legal drug addict. /Rant

And my point is that, beyond the elderly, most citizens don't qualify for any of America's public insurance plans (I certainly don't):

http://en.wikipedia.org/wiki/Health_insurance_in_the_United_...

Insurance does nothing to really insure your health. It is intended to help protect your wallet. A better way to protect your health is to take care of yourself so you are healthy. The discussion in the US about "the healthcare crisis" always focuses on the financial piece of it. There are differences between Europe and the US that impact health having nothing to do with who pays the medical bills: Europe is generally more pedestrian-friendly, there is a different food culture and so on. All of those things impact health. I get tired of seeing "health insurance" held up as a) the only meaningful difference in health costs between the US and Europe and b) the only important part of "how to control medical costs" in the US debate on health care.

That's why I bring it up: Because to me the two things are related.

And if you get cancer, despite your healthy lifestyle, which happens to millions?

If you are concerned about getting cancer, you can get a very affordable cancer policy for a lot less money than major medical coverage costs. As with the above situation, the expenses involved if you get cancer are likely to far exceed what insurance covers. And cancer is influenced by lifestyle. Most Americans aren't terribly healthy. For example, obesity is rampant in the US. So I would be interested in a citation for your assertion that "millions" of people with "healthy lifestyles" get cancer.

Thanks.

You are confusing "insure" and "ensure."

For exemple here in France, on the salary my employer pays, it's divided pretty much like this: 40% employer's taxes, 20% employee's taxes, 40% final amount of money you put in the bank when all is said and done.

BUT my negociated salary, the one I signed on, never included employer's taxes, so for a 100€ salary I never discussed 100€ or even thought of it at any point, my contract has always been about 60€ (and then I pay about 20€ in taxes).

For me what that really changes is that:

- if employer's taxes increses, I have no idea about it, and my pay check doesn't change at all (neither if it decreases)

- our perceived salary seems to be a lot lower than some other countries.

So what I'm asking is, when you guys speak about that kind of salary being way too low, is it a "complete" salary or is it after employer's taxes ? I live with less that those 60k$/42k€ and I can afford a nice middle class life in the middle of Paris plus vacations every year ...

PS: actually if you look at french job offers, you will see "brut" and/or "net" salaries, brut is pre employee's taxes, net is post.

Separately, the company must pay a few other taxes on that $60k (nowhere near 40%, though)

At the top of your paycheck you would see your 'advertised' earnings for that period and then at the bottom you have your take home net pay. Depending on your location, you loose around 20% of your 'advertised' pay to taxes and other mandatory things. If you contribute to a 401K you loose even more.

In Europe some of those things are paid through taxes and some are not. To make a reasonable comparison you need to know what's included each system and how the fees are arranged.

Not that I'm disagreeing with you, it is the way to go. You just need the constant stream of work, which is easier said then done.

Actually being a contractor in a country with good social safety net is even better... as you're employment isn't responsible for healthcare benefits* , your options are much better.

* France has a public/private deal where you (or your employer) can pay extra for better service, but the baseline social safety net is quite ample.

When I talk to people for the first time they're always asking me if I'll be moving back to the US. My response is maybe someday, but for now I'd be crazy to give all that up!

That plus nice cars, eating out, and buying iPads.