Something that comes up here a lot is the notion that wages in Europe are much lower than in the US.
Now as someone who has lived in both places, this has always seemed unintuitive to me, at least from a northwestern Europe perspective.
To me, this has seemed to be affected by a visibility selection bias. I.e. the jobs that are most able to relocate are the best paid ones.
Now this was posted in another sub today. The discussion there focused mostly on Norway, but if we look at the US compared to other western nations in general, there does not seem to be much of an advantage from the 60th percentile down.
For people with inherited citizenships and no gold-collar skillsets, it is quite possible they will be better, or at least no worse off in other western countries.
Looking only at salary is a very American thing to do. I grew up in the States, but live in Sweden and have citizenship here now. I'm also a software engineer, and took a big pay cut to move here. I don't regret it at all.
Americans are so used to having to think about taking care of themselves (because the US government provides fuck all for their citizens) that they don't really understand the value of what most European countries offer. When you remove the need to: 1) pay for medical insurance, 2) save for medical expenses, 3) save for maternity/paternity leave, 4) pay the cost of everything car related (the cost of the vehicle itself, gasoline, car insurance, car maintenance, registration, etc.), 5) make student loan payments for decades because of the exorbitant cost of university tuition, 6) save for retirement, 7) have an emergency fund for when your company fires you or lays you off without hardly any warning,
then you don't need a large salary. Nationalized healthcare, robust and paid maternity/paternity leave, pensions being mandatory by law for all jobs (even wait staff at restaurants get pensions in Sweden), great public transportation and infrastructure, strong unions and worker's rights, many systems to help unemployed people get jobs, including training in new skills, removes the needs for huge 6 figure salaries.
Because their government does very little for them, Americans are also conditioned to not think about how their taxes help others. All of the benefits I listed above are only possible because Europeans pay into the system. A lot of Americans are quite anti-tax, and that isn't surprising because of how little they get back from paying federal taxes. That isn't the case in most of Europe. The European model requires thinking about providing for everyone, not just yourself, through paying taxes. You're young and healthy now? Don't have kids? You still pay taxes because one day you won't be young and healthy, or you plan on having kids, and you can't reap the benefits of the system by only starting to pay into it when your old and unhealthy or finally have kids. Also, the people who are old and unhealthy now, or have kids now, also need help at this moment. One person's taxes can't pay for all of this, either. It requires everyone chipping in. This is hard for Americans because by default they're running calculations about how things only benefit them. The bigger picture is missing. For many Americans this isn't happening because they are selfish people, but is because they've had to think this way their entire lives.
There's a lot more I could say, but I think this is enough for now.
To me, it's like trying to compare companies looking only at total revenue while ignoring business expenses, worker safety, etc.
But even if we adjust for expenses, retirement, college, etc, we still can't compare European wages to the US wages because Europe has walkable social communities while Americans are socially isolated which causes them to waste tons of money to fill in the void. It's like asking if you would rather have a healthy society or make more money in a dangerous, unstable, unhinged society.
That's an incredibly accurate statement. However, it neglects the huge variability in the US and potential to make a lot more than Europe. The US is a high risk high reward society. Europe and most other developed nations are much less so.
One thing nobody mentions is that in many European countries property taxes are negligible. This is the most unfair tax of all in my opinion. It is totally independent of your income or employment status. As a retiree in America you may end up paying a higher percentage total tax the when you were working. Americans actually pay a good amount of various taxes but the value for the money is pretty poor.
My husband and I both make as much money as I previously made alone in the USA. And yet, even with higher taxes and lower wages, we save way more than I ever have been able to.
It's the not paying extortionate prices for healthcare and insurance mainly, but Americans also just get nickel and dimed for so much more.
I don't quite know how to explain to people that having a high salary doesn't mean anything if you cannot save any of it regardless of budgeting well.
I think this is what people miss. Healthcare, childcare and insurance in general in the us are insanely expensive. Now if you want and can live without that you might make more but yeah.
This is an excellent point: I did not pay a dollar for my university degree. I didn't need to earn 100k profit in my first working years in order to pay off college debt.You might be earning more but ultimately that income goes right on to whoever loaned you the money.
There are many such hidden costs in the US - you need the cash there. The raw numbers don't tell the story.
I agree with these points except the chart posted is essentially pre-tax PPP GDP per capita, which might give you an idea of the general welfare in that country. What you all are arguing (and I agree with) is we care about disposable income per capita after factoring in costs of transportation, healthcare, housing, etc. That is the true measure. It's also almost impossible to calculate on any meaningful basis.
Many people struggle to calculate it for themselves.
You have to take "model families" and do the whole tomale. It's even worse because in my case there'd be compound interest you can generate saving money early in your career for retirement or similar, but who did that with mid-20s?
You end up with semi-realistic numbers that help get a better picture of comparison of still not 100% accurate.
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I agree with living here in Europe has saved us money. We make about half what we were making in the states and we’re able to save more money than we could’ve back home. I’d honestly say the biggest factor is effective public transportation. Using public transportation instead of having 2 vehicles, car insurance on both, and gas saves so much money every month. Groceries are insanely cheaper here than they were back home as well. We probably spend about half on groceries as we did back home. Rent is close to half of what we were paying back home as well. Between vehicles, rent, and groceries alone is thousands of dollars less per month we have to pay here than we did back home.
I’m not trying to pick a fight but your argument about healthcare costs, specifically citing a deductible, doesn’t sit well with me. I’ve now lived in the US (for 27 years), Spain (2 months), Germany (2.5 years) and now the Netherlands for the past 1.5 years. When I lived in the US, I had a PPO through my employer at $350/month and a deductible of $2k/year which was really good at the time. I was making very good money ($172k/year gross) and netted about $8k/month. However, my cost of living was high. Everything was expensive.
When I moved to Germany, my salary was decreased to €85k/year and netted €5k/month. I never paid for any doctors visits, medication, had to deal with insurance companies, or fear an ambulance bill because my healthcare was already paid for and was universal. I lived in a major German city with a HCOL and still had lots of disposable income.
When I moved to the Netherlands, I went back to making over six figures and net €5300/month. My healthcare is socialized and I have the required private insurance too. My “deductible” is a total of €385 per year and it’s very difficult for me to hit that deductible because my basic socialized healthcare takes care of all my doctors visits and medications. I have so much disposable income (about €2k/month) by not paying for expensive, non-inclusive healthcare insurance and deductibles in the US in addition to lower COL even in a Dutch city, lower prices of groceries, and ease of transport.
So I’m just one person but my experience has been that my life is better and more affordable even with my gross income decreased by 35% from US to Netherlands because I don’t pay crazy prices for everything from healthcare to groceries.
Not sure if username checks out.
It’s based on my childhood hatred of studying for math classes 😂 I was always anxious and overthought my thought process on proofs. You can check my post and comment history. I share about my immigration/life abroad experiences often.
It’s not just healthcare that is cheaper. Childcare is much cheaper and a lot of EU countries have some kind of Elterngeld/Kindergeld system. I’ve lived in two EU countries and childcare in both ranged around €20-200 a month. In CZ my child received about €600 in rodičovský příspěvek until he was about 3.5.
They're buying less shit presumably
I actually buy more shit. It's the small things like car registration, internet bill, phone bill, utilities, vet care, groceries, event ticket "service fees" and 20% restaurant tips that add up. I barely went out, and some months I still saved nothing. The last year that I was in the states, car insurance and utility prices were a racket.
The cheapest options for everything are still way too expensive in the USA. And I've lived in both a high and low cost of living location on that salary. Every single entity and business not trying to rip you off as hard in Europe goes a long way.
My car insurance before leaving the states was about $400/m and I’ve never been in an accident or even got a speeding ticket….
Yep. I had a car that I owned outright and only liability insurance. I also paid every 6 months to get a further discount. Cheapest reputable option still came out to about $250 a month and rising.
I think they meant you buy less once out the US as there is less focus on consumerism.
I can see that angle now that you point it out. I'm sure it rings true for some people, but I personally never was a huge consumer back in the states. Thrifted everything, hand-me-down furniture and electronics, still wear clothes from middle/high school.
I always felt like an outlier amongst my immediate peers though, and here that is just regular.
Everything is a transaction, it feels like. They’re even opening up playgrounds you have to pay to use in my city.
This is pre-tax income. I don't think you can just ignore tax and other costs. Much of it will depend on your personal spend requirements
There's also the question of whether the 60th income percentile is the right subpopulation to compare wages internationally. It's a pretty big assumption that people who move abroad align mostly with the 60% income percentile, especially when many visas have wage requirements where you have to make above a certain threshold.
True, but you also get something for those taxes paid, most notably in healthcare and education, so looking only at the post tax is also incomplete. I appreciate having both stats.
Yes, but also depends on your personal situation. Someone with a child vs someone who doesn't have a child has different financial spending.
I'll give you an example. If you are childless and healthy and young, the US is probably a better financial bet than Canada for most people. But if you have a child, or have some chronic illness, the calculus changes. There's no right or wrong answer here. Just an answer that works best for your specific situation.
Sure but also the young and healthy person benefits from other people benefitting: less homeless people, crime etc.
Taxes vary pretty wildly across Europe and the US. I wouldn't say you necessarily get what you pay for, especially if you have a very high income. Those with high incomes generally do better in the US, unless they're in Monaco, Switzerland, Ireland, etc.
Hmm, but you shouldn't ignore what the bottom 50% earns. Wealth disparities erode and destabilize society.
I agree but that doesn't necessarily mean you personally make more. By definition, equality means people at the top end make less than a more unequal society.
I did not intend to use the 60th percentile as a basis for comparison, but to say that this is the point where the US no longer has an advantage in wages. Below that the advantage is the other way.
Not all benefits have to be monetary
OP didn’t imply that. But the title of the post is “About wages”, so it’s hardly surprising that the post would also be about money.
I’m currently studying in Scotland and wages might be lower here but a lot of everyday things also cost significantly less than back home. Especially groceries and public transportation, and flights within Europe vs within North America, and train tickets. Not to mention healthcare costs are also lower. Housing costs can be ridiculous but that’s everywhere.
Every time i go back to the US for a visit I am SHOCKED by how expensive food and everyday items have become. Not to mention other services like phone plans (I pay about $12 a month for unlimited calls/text/data. That would run upwards of $70 at least in the US). I also don't think I could ever go back to only having 10 days vacation (maybe) a year and no guaranteed paid maternity leave.
When I was first settling in I was shocked not only at how cheap everything is, but also how much easier it is even to just get around the city. Like the city I live in takes at most 30 mins by train to get to the entire other side of the city. And 45 mins to get to the next city. Not to mention the subway is about £1.40 for a round trip. Flights to the rest of Europe around around £100 max for most of Europe (hell, I’m planning a trip to Berlin over break in January and it was like £300 total for flight and hotel for two nights) I remember I used to spend like $200-250 a month on BARE BONES groceries for just myself at Costco and it cost me like £30 for a decent amount of food for a week at Aldi here. Not to mention what I’m studying (social work) has decent salaries for the area and in most other countries is unionized and has much better job stability and benefits, almost all social work jobs across Europe are contract based not at will where they can fire you for “poor performance” for not keeping up with an completely unmanageable caseload and refusing to give up your entire life just to get the paperwork done.
Lower incomes make a better living and have a significantly better lives in the EU than in the Us. The higher up the income ladder you go the more that inverts.
Exactly with the exception of a few tax havens
Sure, I suppose. I honestly don't know, so I'll take your word for it.
The benefits in EU countries are far better than here in the US. This would definitely be better for lower skilled people.
Agree with this, and I'm usually against emigration. Low-wage workers would benefit much much more than middle and higher earners. But I'm not sure there are many immigration opportunities for those people - if you have the chance then you should very seriously consider it.
Any American working a low wage job in the EU either has citizenship by descent or an EU citizen spouse (or a working holiday visa in Ireland or Austria)
Most importantly people don't count what's beyond the salary. A US-employed French friend had a session with French colleagues where they added up all the benefits (this was when US health insurance was still vaguely affordable, and he had no kids). On paper the US employee got twice the salary than the French did. But when you added up all the benefits, the sick leave, the holidays, the cantine, the cheques-this-and-that, the transportation etc the French got a good deal more. Now that the public services have degraded so much in the US, I think that's even more true. So don't get taken in by the surface number
Before I moved to Barcelona, I did a lot of cost comparison between it and my previous state of Mississippi. No matter how you slice it, BCN is actually LESS expensive to live in than MS. Wages might be lower, but the actual number of jobs is higher AND I can get a drink for less than $12.
I just visited Madrid and was shocked at my €3 euro glasses of GOOD wine at the tapas bar I was at.
Salaries in Sweden are not that high.
This is PPP
Ah. Sorry had just woken up.
Yeah salaries go very far here.
As always different circumstances will apply to different situations. You can’t just make a blanket statement that living standards are always better in Europe or America. Based on your age, profession and experience, things can be different.
IMO, if you want to move, move. But don’t be fooled that living standards are always better in somewhere else.
Also “Europe” is a big place but people especially in this sub always assume it’s just the same 5-6 countries. And yes, life in say Serbia or Bulgaria (for example) with a US remote salary is pretty sweet and likely better than much of the US, but for the average person…
Thats kind of what this is looking at? Income adjusted for cost of living in various income brackets.
I have a hard time understanding where France's numbers come from.
The latests numbers are here
If I look at the 60th percentile for example, OP's table tells us 63k USD, which would correspond to what the employer pays in order to reach a 2442 net monthly salary after income tax - but from the latest numbers, it is 2442 before income tax.
There is a great simulator here: URSSAF
63,627 paid by the employer means 46,908 after employer taxes, then 36,863 after employee taxes, then 33,946 after income tax (yes it's divided in three parts, so that most people do not realize the absurd amount of taxes they pay in this country)
However, if I look at the 20th percentile, 25671 paid by the employer would mean 1598 net monthly, yet the actual number is 1943.
If I look at the 95th percentile, 155762 paid by the employer means either 7187 before income taxes, or 5833 after income taxes; the actual number is 6511.
So... Yeah. From the latest numbers, it would more like this in USD :
This is PPP. You need to adjust for things like differences in costs for kindergarten, pension payments, healthcare, transport, etc. I think this might be a good illustration.
Former HR here, and a question I wonder when I see such staristics bandied about is what is the total cost of compensation. We had a very rough rule that, for each employee, we had approx. 30% of salary in TCC. Here in Sweden it’s 70%. Salaries are lower here but the state provides so many attendant benefits (subsidized childcare, free higher education, etc) I personally don’t miss my high US salary.
I'm not sure how it relates to the statistics which seem to contradict but when my husband has looked at EU jobs in his field they are around a 30% pay cut, if not more.
This is as a senior SWE.
Roles for me as a technical writer are an even bigger pay cut, more than 50%.
I'm not sure why that doesn't match your data but it seems like in tech you can make much bigger salaries in the US.
This is PPP which means that it is a basket of goods adjustment, based on the differences in cost for things like healthcare, transport, childcare, tuition, pensions, groceries, etc etc.
It is an illustration of why so many people in this sub note that they have more money left over from smaller salaries after moving.
The average pay in USA is only $14/hr, poverty, min wage is still $7.25 here. I think ppl who never lived here are only basing it on tech. Then each city, state has different pay ranges too, like Albuquerque Drs pay average is actually only $200-300k. That's why so many leave unless they just want the nice weather. Ppl need to seriously research what the average person makes, government jobs are shit pay too
Yup the only decent way to make money is as a self-employed contractor for a shady af app that may or may not pay you on time or even at all. No customer service line or live agent. Just have to put pressure on them and use harassment or extortion to get any response. either that or you have to impress some old boomer that pretends to be a hard ass no nonsense kinda guy while also being hypersensitive and a weak ass bitch.
Ofc he wont pay you jack shit and if he goes $1 above minimum wage he expects you to work for it.
I'd rather be somewhere where I don't have to threaten, harass and intimidate someone on a regular basis because the government refuses to do their job right and the wealthy old fucks just hoard private land. It's tiring constantly having to carry one on me and extras in the car in case it gets hot.
When in Rome do as the Romans :/
Also, how do they calculate PPP salary? the table is not correct, overall. As a European living in the US there is a clear difference. And as your seniority increases so does the gap in salaries. The US is clearly much better for earning and saving (so many schemes for saving, investing etc). That’s what many people do and then retire somewhere else. In many countries the social system is not sustainable and young people today have no illusions that the government would be able to provide a decent retirement.
Demographics will struggle to provide a decent retirement almost anywhere anyway. Even if you have lots of savings, you can't pay young people to provide x/y/z for you if not enough young people have been born.
This just comes off as cope. Wages in the US are better. End of discussion. Switzerland and Norway may be the exception but as a whole, Europe is not the right place for a motivated individual looking to make money -- that's the US. Europe is for the average person who wants to live a good life without being rich.
The US drives a consumption based economy and while the salaries have a much higher ceiling so do the expenses. The key is to make a ton of money as fast as possible once you graduate since by the time you have kids and settle down people have less disposable income than a western European. The top 10% is doing well in the US. Especially those that are saving money. In my anecdotal experience though you'd have a hard time throwing a rock in Sweden and NOT hitting someone who lives better than almost every American. Your personal income in the US can't solve the homelessness problem around you or fix the freeway you use to get to work that's been under construction for a decade. Get cancer or really sick in your twenties in the US and your life and future career is in serious trouble. We like to look at the US and talk about the high salaries and how you can really make it there but the truth is that most don't and many that do get squashed like a bug even at the top.
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I'm an American so you sound like an idiot responding to me in such a dismissive tone. The k shaped US economy, according to economists, is divided somewhere around 90/10. Not 70/30. About half of all US consumer spending is coming from the top 10%.
The United States has a huge homeless problem. It's up 18% and there's about 800,000 with 150,000 being kids.
Infrastructure in the US lags behind quite a bit. Last ranking put it around 16th or second quartile.
You don't have access to any of those cancer treatment centers unless you're wealthy. I had access to Stanford and saw how difficult it was for normal Americans. Don't kid yourself. The best you can hope for is an affiliated facility which is not the same thing.
The US isn't bad. It's just lagging behind in almost every category despite having the largest economy. Spending priorities do not lie where you think they do.
They are the ones with insane cope levels 😂 they just need to relax and go put Fox News back on
So i think the consensus of the original post was that the norwegian one is 100% incorrect as the median pay is around 65k-75k before tax.(even with the elusive "abreids giver avgift"/regional tax it wouldn't push it that high). It still lands norway high, but not in the sky.
It is PPP, pre tax. Although personal taxation in Norway is not that dissimilar to the US.
Using the US as a baseline the Norway one will be adjusted for no tuition fees, subsidized kindergarten, less need for a car, pensions, healthcare, etc etc all of which push it up.
For those that aren't sociopaths and narcissist, who just want to be scientists and researchers Europe is a better place
no it isn't lmao
The numbers seem to disagree.
You're using PPP numbers and the US is above almost every other european country. You're also not taking into consideration Europe's insane taxation.
Above in what sense? This is sorted based on the top percentile, the point is that it changes a lot for the others.
Taxation is highly variable. Most people who go on about European taxation fell for some politician pretending they are all flat taxes based on the highest bracket.
There is also the question of what you get in return for the taxes.
I don’t know why we have to lie that America is better in some ways salary being one. I live in the eu and much prefer it but why do we need to lie on this sub? Americans have the highest disposable income on average after healthcare, housing and education is placed into factors. This is according to the OCED
Mind you, this is pre-tax, which makes a massive difference when you compare US to France or Germany for example where about 33% of your gross pay is taken. It’s great for majority of people, but to say the salaries are practically similar is laughable (coming from a dual US-German citizen who’s lived and worked in both places)
The vast vast majority of people will make more money in America. EU salaries are lower across the board, even when factoring in healthcare etc.
The actual numbers posted above seem to disagree strongly.
One of the things that has made the idea that Americas wages are higher across the board seem counterintuitive is that at the same time people talk about wait staff depending on tips to make ends meet, people holding down two or three jobs to keep a roof over their head, people in their 70s working as security guards or whatever to live, etc.
While also taking of how cashiers and McDonalds workers in some European countries make 20-odd dollars per hour with the full suite of benefits like healthcare, 5 week vacations, free tuition, childcare etc. And this layer of the population is far more numerous than the top of the income pyramid.
It is blindingly clear that the lower quartiles of the population are better off in other western nations. The post above just adds some numbers to where it starts happening.
If you are in the lower class, yes you will likely be better off in the eu. But the topic is about wages for people that make more money. At least that’s what I interpreted it as being.
Other points:
fast food jobs in Europe are not giving part time employees five weeks of vacation. They are also like businesses anywhere that avoid being on the hook for benefits by preferring part time workers. Just because some stat says “everyone gets 5 weeks vacation time” doesn’t mean people are getting that in the real world. I know this for a fact from personal connections that work at a grocery store in a major EU country. They get a few shifts a week and nowhere near as many as they want. Don’t forget that unemployment is generally high in many EU countries. And that’s not including the fact that many will hire employees on a contract basis by default, which means you don’t get any benefits at all from the job.
for Americans with lucrative jobs, healthcare is usually covered as a part of the job, with often a reasonable payment. So the idea that healthcare is somehow absurdly expensive in the us but not in the eu again doesn’t really line up with how people actually experience it
adding to that: anyone in the Eu that has money doesn’t use the public healthcare system. They pay for private care.
In general, there is much much more money to be made in the US than in the EU, IF you are in a lucrative profession.
No, the topis is about how you can make more in Europe outside the gold collar professions, and how surprised I was to find how high up in the percentiles the effect was noticeable.
While I don't know every country, in my experience they absolutely do. The vacation times are a legal requirement, passed by governments who do not wish to see taxpayers burn out and become benefits claimants, something which loses them money. There are no special exceptions for lower percentage jobs. One exception I do know is the UK with its zero-hour contracts though.
Competition isn't really relevant. No one flies to another country for a cheaper Big Mac. Competition is with other businesses operating with the same legal requirements.
That is kind of a best case scenario though. Employed, lucrative job, reasonable payment not too high a deductible, no sudden accidents out of network bills or denials. Averaged out over a lifetime with periods of unemployment. ill health etc is a different story.
Having worked in healthcare in the Eu for 25 years, I can safely say that this is an amazing level of bullshit.
There’s a lot of US media talking points present in your comment….
Anyway, you mentioned that anyone with lucrative jobs does not use public healthcare in the EU. That’s a load of bs. My household and those of my friends are doing quite well economically and we all use the basic healthcare system. We are mandated to also buy private supplementary insurance too but even that is usually between €140-190/month depending on whether or not you want to include holistic health treatments or orthodontics.
Canada always getting beat by Australia. Damn. Haha
I believe it depends a lot on sector and experience.
I had a colleague in my previous company (in the advertising sector) who moved from the US to Germany and for our position and experience the actual salary is even better in Germany - and on top of that we have better benefits. Only once you get to mid/upper management level it flips and the wage is higher in the US.
On the other hand, my partner is in consultancy and in his company the junior/mid level consultants earn much better in the US offices than the German ones. Management is light years of difference as well.
if i’m understanding, if one were to move to spain from the us with an income over 180k…they would be in the 95%? financially, they would be able to save money?
If you maintain that kind of salary in Spain, yes. The issue is there are very small number of, almost negligible, jobs which pay that much salary.
thank you. i wanted to make sure i understood.
I cant speak for everyone but I don’t even work right now and I still make more and spend less than what I did in America
I have always maintained that America is worse for middle class and lower earners but for upper class earners it is great. There is a ceiling on the income you can make elsewhere due simply to the lack of jobs and companies in specialized high-skill work, and America has the lion’s share of them all concentrated in one country. That means that Americans have a much higher earning potential, but also greater risk. You can see the income inequality in this graph.
Another factor is that most of those middle class jobs are not high-demand careers and you will likely be unable to immigrate unless you’re in one of the high-income high-skill jobs that America excels at. It’s sad but it’s true. I was able to make it out through a study->permanent residency pipeline that no longer exists. This just simply isn’t possible for most people.
As an immigrant to and now citizen of the Amazing Sweden, I do not miss the 70K in medical costs we had to pay annully as people who needed ACA coverage but ran our our small business and made too much to qualify for any kind of subsidies.
When I add that cost to my husbands now much lower income, and calculate all the other decreases in cost of living and tax differences, we are definitely coming out ahead here in Sweden.
Thank you for posting this OP! I feel like, so often, those of us in the Western Hemisphere or Global North feel like we HAVE to earn these salaries because we have to pay for college (or go in debt) or buy a home or buy a car and then pay for healthcare and then, well, all that keeping up with the Jones "stuff" just falls away when you pull a geography...
...I used to feel so "poor" despite my salary in the US and was working 80- to 90-hour weeks in a golden collar job (love that, btw) and then relocated permanently and started working "normal" hours and was just all around healthier and "happier"....
TYFS!