> I think the biggest difference might be that Americans report their salary before taxes, and I think Europeans tend to do it after taxes. $150,000/year with a small family is probably $110,000-$120,000 after taxes in most states. €90k after taxes is comparable.
Europeans also report before taxes, and that 90k€ is definitely before taxes. I don't know about this person's taxation, but it's probably around 50k€ after taxes. That's still a very good salary in Europe though.
> If the average American knew what the benefits and lifestyle are like for a middle-class German family
In a pure numbers comparison, you tend to get higher salary in the US. I guess an American making $100k in the US would not easily consider a $70k job in Europe, because it immediately seems like a downgrade.
Not everyone bothers to go into details, like cost of healthcare, pension, daycare, school fees when applicable, tax rates and whether there is property tax or not, cost of commute, typical cost of a home, groceries etc.
Europe is about bringing everyone to the average. It is not a land of extremes like the US. Your $150k example salary is super super high for Europe so it's going to get pushed way down to be closer to the average.
If you take your example but change the salary to any number in the lower / middle class range, you are going to be far better off.
That is just the nature of the EU vs the US. If you're rich, the US is great. If you're not rich, you're probably better off in Europe.
> If you take a 3500 $ Swedish salary with all the taxes applied, your life level might be equivalent as a 7000 $ salary in US.
That really depends on your lifestyle. I spend a lot of time in both North Western Europe and the states. I find that the cost of housing, car ownership and driving, power, clothing, basic luxuries are far lower in the US. The higher cost is in things like education, health insurance etc. Over a lifetime it might balance out to the same, but as long as you're healthy and working, a $7k income in most of the US will buy you a life style a European with a $3.5k income could barely imagine.
> The point is there's always this scaremongering about tax rates when it comes to Europe, and most of the time the tax rates that comes up are marginal rates that are not at all representative.
As an American, I find the tax rates much less scary than the raw differences in salary. If I could keep my US salary, healthcare, tax rates, etc and move to Europe for a few years, I would do so in a heartbeat.
Citation needed. My personal experience paying taxes in both EU/NL and US/TX is that I pay slightly more in the US, in pretty much the same situation (family of four, two incomes)
>2) you can’t really compare income across countries.
As a close by European whose been to France many times and have friends there, I can assure you 1000 euros a month doesn't by you much in France. Not sure if it corresponds exactly to $18-20K year, but it's not far.
That said, of course, being someone making 1K in France is better than 2K in the US -- regarding education, health, and several other aspects....
It is in the U.S. too, we just struggle to acknowledge it because then we would also have to start asking hard questions about how Europeans have that average salary but also universal health care, public transportation, and a social safety net.
> My salary is low for American standards but I can rely on public hospitals, public schools, and public transportation systems. I do not need to save for retirement either. Or for my kids tuition.
I think about this quite a bit, while the median middle class salary is higher in the US, the burden to fund everything out of pocket here is enormous. If salaries are 10-20% higher in the US, much of that goes out the window to fund things like health care, retirement, higher education, daycare/pre-K education, high rents, etc. Things that most Europeans take for granted. All of a sudden that 10-20% gap seems much smaller.
Also keep in mind that not everyone working in tech in the US is making SV level salaries.
> That can definitely be true, because in Europe the size of the salary matters much less than in the US[1].
I don't believe in that. Yes, the housing prices might scale with the income. However if I want to buy a car, it's about the same price here and there. Just that my income is lower, and I have to save a lot longer for that. The same is true for all electronics devices, going to vacation, etc.
>In Northern Europe where I live a primary school teacher makes above $50k a year.
Where do you live? Because that's less than a teacher makes in the US, lol.
>No, people fall for the propaganda of American exceptionalism, and they haven't done the actual math to see if they actually would have more or less money moving to another country.
So a greater % of Europeans vs Americans are just ignorant? I don't honestly believe that.
>But you cannot just compare salary numbers like that, you have to do a full budget with real numbers and compare how much you're left with each month after you've paid all expenses.
So, realistically, what is someone that is paid $30-40k left with each month?
>Health insurance is $0 here. An average a parent here will have maybe 15 days of my-child-is-sick and 5 days of I'm-sick per year, in addition to 25 days of vacation, plus Christmas and Easter and other public holidays combining to 10 days on average, so 55 days total of paid leave per year for a parent with small children. And when the child was born, the mother received 9 months of paid maternity leave while the father got 3 months of paid leave.
And again, Europeans are very willing to give these up if it means a higher salary/ability to work in the US.
>Did you know that the average total monthly payment for a house in the Bay Area is $5300?
No, because I don't live in the Bay Area and I find anyone that does to be insane... but the salaries mostly scale to reflect that. The _average_ salary for the bay area for SDE is $230k. That's more than enough to cover that cost. A lot of people just rent or get an apartment to build wealth and then move somewhere else though.
Again, all the stuff you're saying is great and if that's your choice all the power to you. I don't see how any of that negates the simple fact that Europeans try very hard to get SDE jobs in the US.
The US is incredibly huge and diverse. You can find almost any type of living situation you want. No matter how you spin it, its hard to beat SDE opportunities in the US. Only thing I can think of is getting a job with an American company in Europe to have the "best of both worlds" but even then, not sure you'll find too many ppl willing to take it.
I was surprised at this so I looked it up. From the article [1] it looks as if income tax in the US is lower than in most of Europe. But yes, higher than Russia, Saudi Arabia or Mexico.
> Having to spend half your available income for things that are automatically taken on your salary in Europe is _the_ major reason Americans are paid considerably more
Are you thinking of anything beyond healthcare? Youre correct that salaries and GDP are difficult to compare, but US disposable income pc is dramatically higher than almost anywhere in Europe, with the couple exceptions being tiny enclaves like Luxembourg or petrostates like Norway. Subtracting healthcare spending doesn't come close to closing the gap btwn the US and eg France.
And this isn't explicable by retirement either, as Actual Individual Consumption is also dramatically higher in the US.
Hell, I'm not even sure your hypothesis makes sense at first glance. If the salary difference was simply a matter of shifting govt spending into the personal ledger, wouldn't pretax incomes be as high in Europe? After all, much of the layoffs we're talking about are high-income enough that the employees would surely be net-payers in any mildly progressive tax system.
>But I don't want my taxes raised an order of magnitude to pay for everyone else.
Possibly relevant: I’ve lived for 5+ in Northern Europe in the same economic/familiar circumstances as in the US, and I paid pretty much the same amount (as a percentage of my salary) after adding education and health care. The winters in Northern Europe are terrible, though. Pretty much everything else rocks.
...by American standards. Ask anyone in Northern Europe if they are happy with their salary and they will almost say yes. It's America that is distorting everything with their ridiculous salaries.
You have to be more specific. EU has a huge range in cost of living. Switzerland/Norway are very expensive. Poland/Romania are cheap.
Plus, as an American, you will get double-taxed in some of the countries that don't have an agreement with the US.
Having living in both the US and the EU, USA is still cheaper, as in, you end up with a lot more money after all your expenses, even if you account the health insurance costs (which the difference with the EU taxes alone will offset).
> They are, but do not forget that in Europe, our take-home wages already have healthcare, social security and pension contributions taken care of, and our housing and general cost of living (e.g. groceries) are also vastly lower than in the US.
Well, Europe is big. Cost of living differ between different places.
You can look at measures like 'disposable income' or similar metrics.
Doesn't really matter too much what specific metric you use, US incomes are higher.
Thanks for the source you linked to. To quote them:
> Changing the price deflator used to adjust wages for inflation can boost measured wage growth. But wage growth would still lag far behind growth in economywide productivity, [...]
They are either using difference inflation metrics for productivity vs wages, or their definition of 'far' is different from mine.
Since 1950, the amount of compensation going to labour has fluctuated around 59% - 65% of total GDP in the US. A fairly narrow range; and no reason to say anything like 'lag[ging] far behind'.
Because we are looking at a ratio, it doesn't matter how or even whether we adjust for inflation here.
So all productivity improvements that make it into GDP also make it proportionally into wages. You can't really ask for more, can you?
Whether wages have stagnated is then a question of whether real GDP has stagnated. And, alas, unions aren't really known for driving productivity in the US. Just the opposite.
Of course, you can argue about median vs average. And that's a very valid discussion to have.
Europeans also report before taxes, and that 90k€ is definitely before taxes. I don't know about this person's taxation, but it's probably around 50k€ after taxes. That's still a very good salary in Europe though.
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