Why tech salaries in Europe are so low (compared to US)?

Hi folks, welcome to Not Only Code!
First, some announcement: I'm doing a LIVE STREAM. Tune in on 6th of September (Tuesday):
* 7pm Central Europe
* 10.30pm India
* 1pm East Coast US
* 10am West Coast US
In this video I'm talking about software developer salaries in western Europe and explain why US companies pay so much more.
🎥 Timeline:
0:00 Intro
1:15 Where to find good data
2:18 Reason 1 - US is richer
3:38 Reason 2 - Salary vs benefits
5:20 MAJOR reason - US tech companies are rich
7:04 MAJOR reason - competition for talent
9:16 Thoughts on immigration
10:43 EU devs don't look for better jobs
13:20 Thoughts on living in Europe
14:30 Summary
📝 Data sources:
* levels.fyi - tech salaries, mostly in big tech companies
* techpays.com - tech salaries in Europe
* payscale.com - some average quality data about salaries
* glassdoor.com - salary info, often outdated, but useful for small companies
* howmuch.net - info about revenue per employee
* statista.com - info about revenue per employee, salaries, other stats
* 247wallst.com - profits per employee info
* teamblind.com - anonymous tech discussions
* blog.pragmaticengineer.com/so... - article talking about high tech salaries in Europe
If you enjoy this kind of content, check out my website, 🌏 notonlycode.org, where I publish more in-depth articles about software development.
As always, if you have any questions, suggestions or feedback, you can contact me:
✉️ email: [e-mail]
🐦 Twitter: @GregoryWitek

[@dawidkotarba5146]

Great to see you back!

[@brian-lau]

Yay! Good to see not only code again

[@user-zy4mo3wp5k]

Good to see you again, Greg! It would be wonderful if you covered career progression (say, from Middle to Senior) when changing the company. Thanks :)

[@NotOnlyCode]

Great suggestion, I'll try to cover it in a video this year, and I'll be happy to talk about it a bit during live stream next week!

[@georgeFulgeanu]

TL;DR Problems with moving around in Europe 1. Lower buying power although salary is marginally bigger 2. Not speaking the same language - especially a big problem when having kids 3. Rents are ridiculously higher in western countries than in eastern countries Long version: Great video explaining the problems of people moving around. In European culture family and friends are central to our culture ( community of people). This is a problem when moving abroad: when you leave your city/country. As a Romanian I can say from browsing the job market in Spain and Italy that the salaries are lower than in Romania. But the buying power is clearly smaller. One other problem when you move to a new country in Europe vs USA, you don't speak the language. You get into all sorts of problems regarding pensions, approvals to buy certain houses, anything where you have to deal with the state that you're moving into.

[@Xamufam]

You should add scaling up production in Europe is hard because of different regulations

[@bzuidgeest]

On the face of it maybe, but the picture changes when you take into account that people in Europe are not saddled with enormous student debt, have access to healthcare at no or little costs, employees pay into pension funds for their employees and so much more. The salary doesn't need to be as high as the US. With all the benefits you get through the government and companies you are left with the same amount or better left over at the end of the month. Exceptions apply offcourse. The height of your monthly income is a poor comparison metric. You need to take into account the price of living in a country and the quality of living. The first is usually lower in the EU and the second much higher. The US also has a higher tax burden and a US citizens gets far less for that money.

[@bart_seavey]

I worked briefly on assignment in Europe. My observation was that the mindset of workers were much different. They were well qualified and knowledgeable in their field, often moreso than Americans. But the mindset was to do a specific task and stay in their lane. Taking initiative to develop a new process to improve efficiency or to generate more revenue and profit for the company was frowned upon. That was someone else’s job. No risk taking, getting excited about a vision, having an entrepreneurial attitude, working on things on your own time because you live it and can expect to maybe be rewarded. It is only a job with a transactional relationship with the employer.

[@NotOnlyCode]

That's an interesting observation! I don't have much comparison with Americans, but I agree with you that in some European countries people have the "I did my job, the rest is not my problem" mindset - just complete what you were asked and that's it.

[@LEKIPE1]

Well with such low salaries I don’t see a reason on why they would do more than their work

[@dekippiesip]

I see this to(I'm from the Netherlands), but in my experience that's also very much a generational difference. I work as a data engineer for an insurance company, and I have (semi) automated certain processes that would otherwise be done manually. Basically I came in as the new guy, got boring tasks because of it, thought screw that and automated the boring tasks instead. The feedback was positive but not overwhelmingly so. My primary motivation was just making my own work less boring, because I hate doing stupid manual work. But many colleagues don't seem that bothered by it. Older programmers are often pretty risk averse and like to emphasize risks and insist on doing things the old way. Now I find myself less motivated to innovate because it often feels like dragging a dead horse if no one really wants involvement in that. Perhaps the US just has a more dynamic amd somewhat younger workforce too, because it's mostly the old guard that just wants to stay in their lane and do things the old way. Of course the RL responsibilities also play a part, if you have children and other RL chores you aren't going to go out of your way to do more than is asked unless you get some reallyyy significant raise.

[@tankevurpa]

I work in EU. In my experience, working hard, fixing problems and inventing new solutions wont reward you with anything. So after years of doing that. I kinda gave up and now I am just doing the bare minimum.

[@dekippiesip]

@tankevurpa that is why Europe is so stagnant and we don't have our own google or facebook. We are lagging behind, and precisely because we reward people who don't show any initiative too much and don't incentivize creative minds nearly enough.

[@evilzzzability]

The tech megacaps are a different beast, but startups and scaleups will still offer great salaries as they attract so much VC money that is hoping to back the next Google

[@sunilsantosha8001]

I agree with your views

[@HedleyLuna]

I think the 6th reason is the biggest tbh. People here in Europe, usually, don’t fancy higher salaries and higher responsibilities and most likely more working hours. They want to be average and have lots of free time, instead. So this paired with the benefits leverage things at the end of the day.

[@jtb5729]

It's not that they don't value, it's that they have given up on being able to achieve that after trying in younger years since being innovative doesn't reward them.

[@emmanuelkofyagyapong6382]

Spot on! I went to events on Spotify and Facebook, and I asked some questions. While the staff engineer at Spotify did not answer me, the mid-level engineer from FB was way more knowledgeable than the experienced falk at Spotify... like, there is a genuine lack of talent at Spotify.

[@popps33]

Yes! US has High Competition within the context of talent pool! Definitely the reason why the salaries are high in US Tech Sector

[@emmanuelkofyagyapong6382]

Wuld you go to USA or EU for software engineer?

[@daregeorge]

Well, I have an opportunity in Canada and another country which pays more, but I chose to accept an offer as a Data Engineer/Snr Data Scientist in a Western European country that pays way less and the only reason is quality of life or work-life balance... To me, it's not the accumulation of wealth but the peaceful balance that comes with it. I'm moving from Nigeria (Africa)... Good presentation, not only code

[@camn-bv3vq]

Wow that's the truth. Plp who wanna move to Europe from South América are not worry about salary, just quality of life

[@backgammonbacon]

Mostly its because people are quoting total financial package which includes share options and bonuses. Those are meaningless if you started at a small startup as their value is just a guess. In Europe we tend to just quote our salaries only. Contractors get paid a lot while salaried staff get way less.

[@mikkosilakka]

Unfortunately you are right. I spent 6 years at Uni automation engineering to get Masters degree. Focusing backend development, starting salary 2800euros/month. Senior devs make around 4500euros/month. Nurses make 3500e/month 3years education and doctors could make around 12000e/month with 6 years schooling. This is in Finland situation, we have way too many coders and engineers in general.

[@bzuidgeest]

You also have access to healthcare dit way less than Americans and other social benefits. Stuff an American has to pay for it of that bigger salary. Their income might be bigger, but they have to spend a lot on things we already get. In the EU wet also tend not to have huge crushing student debt. Americans do. The salary number isn't everything, you need to look at the complete package of living in a country. An eu salary might be lower, but you might very well be able to spend more of it freely.

[@agginswaggin]

So why don't companies hire more in Europe? Still looking for that video

[@dmitrymonchares]

Thanks for the video. I appreciate the overview. Salary has consistently been my primary concern whenever I interview with European companies, and I've wondered if this trend holds true throughout Western and Northern Europe.

[@leshracevil]

I believe it's because US companies make more money, and there are more people willing to work more hours or something

[@TheTTax]

@Moon Shine bigger unified market, less burocracy and regulations to adapt to 30 different country's legislations and languages, a culture that values working all the time, a bigger exploitation of the labour force through less legislation enforcing worker rights and benefits, less taxes, less safety/privacy/polution regulations, population 22 times the size of the average EU country, etc

[@adamoliver4094]

I never hear the term "exploitation of the labor force" in the US. Maybe it's happening, but that's just not how most people here think.

[@penguingobrrbrr353]

Here in my country Bulgaria which is located in Eastern Europe. Average Salary for Software Developer starts from 2000euro up to 4000euro and comparing to prices of gas, food ,houses etc people here basically are robbing us alive. Most people here are surviving on 400-1000euro per family !!!.

[@MHG796]

Така ще е ако не махнем регулациите за IT сферата, колкото повече хора се опитвар да правят бизнес толкова по-високие са заплатите.

[@LEKIPE1]

It’s not true just for tech. Salaries are lower in EU period

[@bzuidgeest]

On the face of it maybe, but the picture changes when you take into account that people in Europe are not saddled with enormous student debt, have access to healthcare at no costs, employees pay into pension funds for their employees and do much more. The salary doesn't need to be as high as the US. With all the benefits you get through the government and companies you are left with the same amount or better left over at the end of the month. Exceptions apply offcourse.

[@LEKIPE1]

@@bzuidgeest average American student debt is $30K so stop extrapolating your fantasies regarding student loan debt

[@bzuidgeest]

@@LEKIPE1 that is still more than none and doesn't account for all the people that cannot go in the US because they lack the funds. Second what you're giving is an average. How many people actually are on that average? There are two possible curves for that average. A bell curve or the opposite. With a bell everybody is around 30.000, but with a valley in the middle everyone is either on zero(rich) or way above 30.000 on the extremes, the average would be 30k in either case. My guess is that US citizens have a valley curve. And that only addresses one of my examples, what about the others. Seems like you're really hung up on the student debt thing. Are you a trump voter?

[@WisomofHal]

Salaries in the US are only higher at the large Tech Companies (Google, Amazon, Apple, etc.). The USA is a battlefield of large tech companies, in which they can find talent in the obvious regions in the USA (San Francisco, Seattle, NY). Most other companies pay fairly low to software engineers.

[@ovibiswas7849]

Still way way way bigger than any europien country fuck even city like london zurich

[@Joyce-he9vm]

No big tech companies, whole VC industry too small

[@errrzarrr]

The “Free” Health care is a very poor and sorry excuse for low waves, remember you have to join a waitlist for about 8 months so you get medical attention. And so a person who does not work get the same care of even better. What's the point then in making an effort? On the contrary, heavy fiscal burden and heavy taxes are part (if not the MAIN) reason of the low wages in Europe for highly-qualified scarce professionals. The more fiscal burden, the less free market and less competence, the less competence among companies (monopolies and oligopolies), the fewer the opportunities for the professionas, lower wages, and lesser benefits

[@robertmazurowski5974]

Healthcare in the US is the best in the World if you can afford it.

[@MrMahoark]

high end tech copanies in asia pay mode than in europe :)

[@NotOnlyCode]

I hear that from time to time, and recently I've heard that developers in India make more than in Europe, but I can't find any reliable sources that confirm it before some anecdotes. Where do you get this data from? When I look at top tech companies on levels.fyi, Europe in Singapore are close, but India isn't (though of course their salaries, even if lower, allow for much higher savings due to lower taxes and CoL)

[@jtb5729]

​@@NotOnlyCodeyes developers in India make more. Especially in the last 5 years the salary increase has been high.

[@tabernathy0428]

Europe is just not competitive. You go to America to chase your dreams. You go to Europe for comfort and wait for life to end. There is nothing wrong with seeking comfort, except in a capitalist global society countries must compete. The future is looking very Asian and American. I don't know where Europe fits in. Seems like the people there are still coasting on the past accomplishments of prior generations while the Asians and the Americans are still innovating, pushing forward, and striving for more. The lack of ability to compete and the impending population collapse of Europe is really scary as an outsider looking in. I think Europe is close to being maxed out on immigrants and the birthrates are not improving. There will need to be a cultural shift.

[@NotOnlyCode]

I mostly agree with you, except for the dreams/waiting to die part - that assumes that dreams revolve around making a lot of money, but there are many other things you can dream about, and Europe is a place where people can fulfill their dreams and have a life they can enjoy. I agree with you that Europe is falling behind though - currently it's still a big market with a lot of relavitely wealthy people, but Asia is looking way more promising, and eventually some countries in Asia will become the best places to live. Europe relies on the wealth built over centuries, Asian countries build their wealth now.

[@SatchelChannel]

The future is socialist my friend :), capitalism can't last

[@txdmsk]

It is stupid to think that the Americas have future. They do not. The US is going through its death throes. Less than half of all newborns are white. Crime is SUPER HIGH. There is no group cohesion. Even a civil war in the near future can not be ruled out. Drugs and various addictions have already destroyed the younger generations. Virtually all the politicians and CEOs are psychopaths. Female voters outnumber male voters by 15-25%. The zeitgeist is abhorrent, and self destructive.

[@dimitarmargaritov]

As Europeans we can be both comfortable and ambitious, I really dont get it why we dont do both.

[@joecater894]

thats because in western europe/ UK they dont want to train... they just want all the skills and they want to pay next to nothing for them...

[@NotOnlyCode]

That suggests companies in other parts of the world are eager to train engineers, but I'm not sure if that's the case

[@pulanala1421]

Benefits hardly benefit anyone

[@TheJacrespo]

In the EU, they look for software engineers but employ them like blue-collar technicians in a specific narrow stack (mainly Java and .NET craps). So, they don't work as engineers to solve real complex problems and come up with innovative ideas, but rather as mere cogs in the machine who code monkey what they are told.

[@evilzzzability]

Most European countries have aggressively progressive income taxation as they are not really structured to enable people to be paid highly through normal salary. People are expected to be paid via equity and running as a business if you want aim to for high "salary"

[@rmworkemail6507]

Saying Europe pays poorly but covers you from cradle to grave isn't convincingly enough

[@txdmsk]

Another very big reason is that Europe is just much more socialistic. Remember the pareto-principle? Generally in most teams most of the productivity comes from a small portion of the team members. Roughly the top 20% performers are producing around 80% of productivity. People are very entitled, and they think that if their salary is 1X then everyone else's salary should be very close to theirs, regardless of productivity (which they can almost never measure correctly). So the best employees in Europe usually have very close to a 1X wage where X is the low perfomer's salary.