I think it has to do with the higher rate of investor funding in the US that allows companies to spend above their actual assets by a huge margin, because of the significantly lower capital gains taxes there. The risk is much higher that US companies go bankrupt or investors stop funding the company during times of high interest rates (such as now), which is why US tech companies are disproportionately affected by the post-Coronavirus layoffs. Even Reddit itself (according to Spez) has not been profitable through all 18 years of its operation, but someone was clearly pouring money into it to keep it running. European companies on the other hand have a lot more administrative overhead when it comes to loans and investment than US companies, so they can’t use money they don’t have to offer attractive compensation on the level of US companies.
That could explain some but still “old” hardware companies not even software ones can pay well above market here. I would imagine these to be more similar to european stable companies.
I think ultimately the US choses to pay more for certain jobs at the expense of some others getting less. In Norway for example I read somewhere software developers only make 20% more than the average worker. I think that would be unimaginable in the US. Theres simply not the same reward for hard work in Europe as theres in USA and I think its dangerous because it tells people to do the bare minimum and make Europe less competitive. Why study for 5 years and work hard (mentally) all your life when you can just work in a factory or flip burgers etc for next to the same?
Reading some comments I think laws are weaker in the US and companies need to pay more as hiring a worker there is closer to hiring a contractor here in terms on how easy is to fire. But still these companies choose to pay more when they come to Europe to attract talent.
Hardware companies have much deeper pockets because the initial investment for hardware design and manufacturing is much higher than software. This also helps them keep their profits because new companies can’t enter the industry and compete as easily.
I also realized that I didn’t mention the elephant in the room, selection bias. US companies in Europe are those who have already “made it” in their domestic market and are looking to expand globally, of course they’ll bring money that Arnes Webbyrå AB doesn’t have. I follow CS industry discussions that naturally end up talking about the US a lot, and there are stories about how retrenched developers with experience had to accept terrible wages like $30k a year with all of the lack of safety nets that living in the US comes with. Those positions exist, but they don’t hire foreigners, so we never hear about them.
But I agree with you that a high minimum wage also reduces how much a company can pay its top employees, because their expenses on lower-paid employees like customer support and janitors will have to be balanced out somehow.
You are not logged in. However you can subscribe from another Fediverse account, for example Lemmy or Mastodon. To do this, paste the following into the search field of your instance: !programming@programming.dev
Welcome to the main community in programming.dev! Feel free to post anything relating to programming here!
Cross posting is strongly encouraged in the instance. If you feel your post or another person’s post makes sense in another community cross post into it.
Hope you enjoy the instance!
Rules
Rules
Follow the programming.dev instance rules
Keep content related to programming in some way
If you’re posting long videos try to add in some form of tldr for those who don’t want to watch videos
I think it has to do with the higher rate of investor funding in the US that allows companies to spend above their actual assets by a huge margin, because of the significantly lower capital gains taxes there. The risk is much higher that US companies go bankrupt or investors stop funding the company during times of high interest rates (such as now), which is why US tech companies are disproportionately affected by the post-Coronavirus layoffs. Even Reddit itself (according to Spez) has not been profitable through all 18 years of its operation, but someone was clearly pouring money into it to keep it running. European companies on the other hand have a lot more administrative overhead when it comes to loans and investment than US companies, so they can’t use money they don’t have to offer attractive compensation on the level of US companies.
That could explain some but still “old” hardware companies not even software ones can pay well above market here. I would imagine these to be more similar to european stable companies.
I think ultimately the US choses to pay more for certain jobs at the expense of some others getting less. In Norway for example I read somewhere software developers only make 20% more than the average worker. I think that would be unimaginable in the US. Theres simply not the same reward for hard work in Europe as theres in USA and I think its dangerous because it tells people to do the bare minimum and make Europe less competitive. Why study for 5 years and work hard (mentally) all your life when you can just work in a factory or flip burgers etc for next to the same?
Reading some comments I think laws are weaker in the US and companies need to pay more as hiring a worker there is closer to hiring a contractor here in terms on how easy is to fire. But still these companies choose to pay more when they come to Europe to attract talent.
Hardware companies have much deeper pockets because the initial investment for hardware design and manufacturing is much higher than software. This also helps them keep their profits because new companies can’t enter the industry and compete as easily.
I also realized that I didn’t mention the elephant in the room, selection bias. US companies in Europe are those who have already “made it” in their domestic market and are looking to expand globally, of course they’ll bring money that Arnes Webbyrå AB doesn’t have. I follow CS industry discussions that naturally end up talking about the US a lot, and there are stories about how retrenched developers with experience had to accept terrible wages like $30k a year with all of the lack of safety nets that living in the US comes with. Those positions exist, but they don’t hire foreigners, so we never hear about them.
But I agree with you that a high minimum wage also reduces how much a company can pay its top employees, because their expenses on lower-paid employees like customer support and janitors will have to be balanced out somehow.