Living costs in Europe are incredibly uneven, like they are in the states. Denmark is much more expensive than next door Netherlands, for example, which is actually quite reasonable (and perhaps Americans might even find it cheap outside of Amsterdam).

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.

Yes, a few things. For one, Germany isn't the richest in Europe. But that's besides the point.

Typically price to income measures not prices per person, but per household. After all, the average house isn't lived in by one person. particularly homes that are bought (average buyer is a family, or an investor renting to multiple people), leading to an income that's the sum of typically at least two adults.

Second, these figures are virtually always pre-tax.

Third, these figures often reference to price to income of buyers, depending on the study. The average income in the Netherlands for example is about 37k leading, 5.4x would for example get you to 200k. But the average income includes unemployed, students, retirees, disabled etc. The average salary of working individuals (i.e. the home-buying population) is substantially higher, particularly if you filter out the population which is eligible for cheap subsidised social housing (about 1/3rd of all housing stock in the Netherlands). At that point you get to >50k salaries, with families of two earners often bringing in 100k and able to afford 540k homes at price to income levels of 5.4x.

Fourth, interest rates in certain EU countries is substantially lower than in the US. I just bought a house at sub 1.5% rates (Netherlands), about half of what you see in the US. Denmark had negative rates, I believe. This pushes up the max mortgage / home price to higher figures than the US, at the same monthly fees (and thus same affordability). In that sense it's not any cheaper per se, once you figure in that the US has more expensive financing costs than some EU countries, including Germany.

Fifth, the average buyer isn't a 25 year old fresh from college with a new job, but instead actually 45 years old. In fact, the average buyer isn't a first-time buyer, but has bought and sold a home before and has some equity, some savings, a retirement fund, perhaps a small inheritance from his parents, buying with a partner in the same situation. In other words, people are typically bringing in quite a bit of equity and are able to afford more than they can borrow.

Umm what?

Have you seen the salaries and house prices in the EU.

Their average salary is about $150k for software engineers, in the EU it's about 50k. None of the taxes or any other differences make up for that.

Americans have got it easy.

Where in the US? It's a massive country with a huge regional variation in cost of living.

There is still value in the comparison. Products like mobile phones are going to have similar prices around the globe. Also, it affects the capability to travel.

With my European salary, I can travel anywhere in the world. Norway is more expensive than Turkey, but I can travel to both.

We had a team member for a secondment that came from a country with lower salaries. Our company had a policy where you pay first and then you get refunded. He needed to get all expenses pre-paid because of his full salary not being enough to pay for the expenses.

If you can buy a house in your country for 2,000 dollars. I can also buy a house in your country at that price. Probably I can buy a few of them once I have my basic needs covered in my own country.

So, there are more interesting data points than purchasing power in dollars. But it is relevant when we talk about wealth distribution.

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.

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.

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.

After emigrating to central Europe I have to disagree. The salary in the UK is relative to the location so London for example is stupidly expensive to live in, so instead you commute an hour or so and still pay fairly high rent.

High salaries are in the major cities, but they carry extremely high cost of living, without necessarily high standard.

The salaries are actually closer than you might think once you look around of course, and the cost of living is almost always significantly less. So from my own experience overall I'm significantly in the green.

> Actually US is looking like South America: You try to earn as much as you can, not because you want, but to be able to live a safer life.

South America isn't all as bad as you hear on the news. You seem to have these sweeping ideas. Things usually aren't that black and white though.

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.

Your calculus is far far from reality so your further reasoning is therefore flawed from the very start. 4-4.5k EUR is probably more realistic.

Moreover, property prices around EU are generally speaking anywhere from 3k EUR to 15k EUR per sqm. For a 100sqm home that's 300k EUR for the cheapest one, 700-800k EUR as a median and more expensive ones over a 1M EUR. Even with the 90-th percentile salary such as 4k EUR per month (after tax), how exactly do you envision buying a home with that sort of prices?

Software engineers are being grossly underpaid in Europe and all this recurring bullshit around housing prices, living costs etc. is just a bullshit that capitalist companies will spread to convince people such as yourself to start considering your colleagues as a "threat" and not just human beings who want to be paid what they are deserved.

My purchasing power, even with the 90-th percentile salary in EU, is _nowhere_ near the purchasing power I'd have with the same skills I have if I had lived in the US and that's where all the discussion can stop. If we take some of the other European countries as an example that gap is going to be even much larger. Purchasing power coefficients are a real thing you know.

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.

Have a look at the labour share of gdp. Eg at https://fred.stlouisfed.org/series/LABSHPUSA156NRUG or https://taxfoundation.org/labor-share-net-income-within-hist...

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.

You think so? I'd go ahead and try to compare anyway, for instance https://www.expatistan.com/cost-of-living/index/north-americ... vs. https://www.expatistan.com/cost-of-living/index/europe - diverse as this data is, in terms of cost of living major cities on both continents seem to be roughly on par with eachother.

> The trend in bigger [European] cities now is to have a bike and ride public transport - many people dont even want a car.

Maybe it's reversing now, but it's been - at least partially - a widely purported stereotype: http://www.theatlantic.com/international/archive/2012/08/its...

Besides, traffic congestion in big European cities happens to be bad beyond an average American's imagination, so not wanting a car may be forced by these dire circumstances much more than a result of "not caring that much about buying things"...

> With 150k you would be considered very very rich. Presidents and heads of state make that much in most of the european countries.

In most Western European countries

I was more responding to that idea: everything is more expensive, and everyone is making a lot less (not just the top quintile). Seems like a bad trade, but that's just my $0.02

While this does have a partial truth to it, the examples are delusional. How can anyone compare 50k GBP to 130K USD?

I have lived across the USA, EU, and Asia; but such comparisons are heavily personal situation dependant. The calculations would differ for single vs family as well.

My understanding is that the cost of living is very reasonable, with what the average person gets paid. Almost everyone else in Europe spends a bigger portion of their income on accommodation, food, clothes, commuting etc. while the cost of electronics, cars, vacations and so on remains the same.

Is food really cheaper? That's not what I heard but I don't know.

But that's a weird take. Quality of life is not entirely dominated by your purchase power if you have enough to sustain life. What about having time for culture, friends, family, quality of the environment, safety, access to healthcare etc. The only exception may be housing.

Some cities here (in europe) have an absolutely incredible quality of life and I would never factor in the price of groceries because it doesn't matter. Everyone in the middle class can afford groceries. Housing maybe, in some cities it's a real issue, but I personally don't care as much because I don't really need an abundant apartment so I always find something. I want beautiful cafes just around the corner, vibrant, active culture from fine art to independent, small artists and beautiful parks and buildings.

I would never trade it for a big car and a big house in some suburb.

A friend of mine is working 32h a week and I am starting to think that he has figured out how to really improve his quality of live. On a programmers wage you're still middle class, you just earn so much. And he's travelling so much, meeting friends, getting into hobbies or just enjoying a really nice coffee in a cafe, taking in the beautiful autumn lights, while everyone else is working that you're always a but envious.

I've made the opposite experience. Sure everything is 30% more expensive in Germany than in Poland but you also make twice as much money. The differences in cost of living are pretty insignificant but the salary is so much higher that it more than makes up the difference.