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From the recent "Developers Who Use Spaces Make More Money Than Those Who Use Tabs" article:

enter image description here

How can this be explained, given the similar standards of living and purchasing power between these regions?

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    @JoeStrazzere It's just an observation based on the data from the article. See the linked image. $100k vs. $50k. – user777 Jun 20 '17 at 16:29
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    ...but the data referenced is directly from the article... – Pyll Jun 20 '17 at 16:29
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    @user777 50K median sounds much too high ... is this a "what would you like" - value...? – deviantfan Jun 20 '17 at 16:32
  • Second critic point: What value? Total cost for the employer (including the emplyoer side of the health isurance, which most employees won't ever see)? Net salary? Huge difference. – deviantfan Jun 20 '17 at 16:34
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    We need the extra money because we have no government/society safety nets (or ones we have are under constant attack). When Lord of the Flies applies, cash is king! – PoloHoleSet Jun 20 '17 at 16:38
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Raw salary isn't a good comparison.

For example, I might make $100k in the USA - but that doesn't include heathcare, any retirement/pension, and almost always will be less vacation than my counterparts in Europe.

For a family, healthcare can easily be $10k+ a year -- many people abroad will not pay this. Same with retirement/pension contributions.

If you figure that someone in Europe gets 2 weeks more vacation/holidays (which is probably on the low side) it means they are working ~5% less too, so of that $100k, now that's another $5k difference.

Americans have significantly less employee rights/protection as well compared to Europe, generally speaking, which means things like unemployment, job security, etc. Those all have financial value - for example, in my state the most I can receive from unemployment is $1.8k/month if I were to make $100k. With a relatively small total limit. Contrast this with unemployment benefits in Europe...

Now, with trivial math, that $100k in the USA is already down to $75k equivalent European salary.

Next, the Euro value vs the US Dollar has dropped significantly in the past 5 years from nearly 1.4:1 to close to 1.1:1. This effectively devalues the European salaries nearly 20% when compared to US salaries only a few years ago. That's another $20k difference. Even worse if you are paid in pounds.

So now, still using fairly trivial to identify differences, a US salary of $100k is actually comparable to a $55k European salary. Note that there are considerably more factors affecting both the US (and European) salary.


Ultimately my overly simplified analysis doesn't do this justice. There are many factors, some tangible and others intangible, that vary between how compensation works in Europe and the USA (and elsewhere). Add in localized supply/demand (you will see significant variance in the USA too between say rural areas and SF/NYC) and you will quickly realize it's a nontrivial issue to fully analyze.

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    Right, Salary and total compensation are two things. Good analysis! – Richard Says Reinstate Monica Jun 20 '17 at 16:36
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    yes...but to be fair, $100k salary usually not the whole story in the US as well. Many I know have the 6-figure salary, and another 20% bonus... – Pyll Jun 20 '17 at 16:38
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    Would be interesting to see what the breakdown is for developers in the US for being salaried, FTEs vs independent contractors or contract workers, and how the typical contract worker employment differs between Europe and USA. That could be a huge difference in "averages." – PoloHoleSet Jun 20 '17 at 16:39
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    @PoloHoleSet I wrote a long post about that once. I will try to find it, I broke down the FTE vs consultant cost. edit: here is a long breakdown of that – enderland Jun 20 '17 at 16:41
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    Sorry to say but this comparison is not right. You compare what's left of the 100k$ after paying for healthcare and so on to the 55k€ (Germany) that is also a gross value. You thus omit that healthcare (~14%), unemployment insurance (3%), pension fund (~9%), among others are also deducted! Not taking taxes into account (which you skip for both, that's not an issue): for the 55k€ example social insurance contributions will amount to about 11k€, so 44k€ pre-tax would be the number to compare to. In other words "will not pay this" when referring to healtcare or retirement funds is outright wrong. – Ghanima Jun 20 '17 at 19:07
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I was looking for UK employment in the data science space recently and discovered the same thing.

This article says it's a supply/demand issue, combined with the fact that venture capital in the tech space is much more mature in the US.

http://www.businessinsider.com/british-tech-workers-paid-less-than-americans-hired-salary-data-015-7

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I don't know whether my reasoning was correct, but I predicted a better standard of living for programmers in the US than the UK in 1970, and acted on that prediction.

Among several entry level job offers, I picked the UK subsidiary of a US company. It was not the highest paying offer. As I had hoped, a few years later I was working in California on an L1 visa, later replaced by permanent resident status.

My reasoning at the time was that the US was betting heavily on the computer industry. There was a lot of competition among US computer manufacturers and related businesses. I expected that to create a high demand for programmers, and the money to pay us well.

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