Or rather why Europe pays so bad.
I wonder whats the reason behind many american companies being able to pay 200-400kusd a year while its hard to get past 100k usd in the richer countries of Europe (Germany, Scandinavia, UK, etc.). A junior in USA gets more than a senior in Europe. And after 10 years the american may get 2-4x the salary of the european counterpart. In contrast life in USA is often even cheaper.
- Are european companies greedy?
- Are european companies less competitive?
- Are the high taxes and equality in Europe pushing companies to not try harder to reward talent while USA rewards the high performers as they can see the benefits it brings?
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.