[p4wnc6]

In what way are lower wages good for the employees you're trying to attract? While some aspects of cost of living are low, others are not low at all. I guess if you're looking for nothing more than a temporary lifestyle involving enough money to go to concerts and eat at restaurants, the wage is fine for a younger person in Berlin. But it's a fantasy to believe you can effectively grow a company that way. You really do need to hire experienced people, often with families and expectations for a higher quality of living conditions, etc., who aren't particularly interested in the youth culture offerings of Berlin.

For these people, earning ~ 50k euros / year in Berlin is a way, way, way, way, way worse deal than earning ~ 200k dollars in San Francisco, despite SF's insane costs. You just simply cannot do anything with 50k euros/year in Berlin unless you have no outside obligations and are happy spending the money of minor lifestyle perks.

I'm surprised that any of this is even controversial. The same is true for start-ups almost anywhere else in continental Europe too. To a very limited extent there are some companies in Amsterdam that actually pay a "real" wage (i.e. you can support a family, enjoy life, and save for retirement), and some across Switzerland, but not many.

Thinking in terms of "yay, cost of living is low so I don't need much of a salary" is the classic immature analysis of a recent grad who looks at it more like a program for teaching English is southeast Asia than like they are actually working a job, building a career, etc.

[yardie]

I made 50k in a more expensive city, Paris. From that my partner and I were able to buy a flat, put our son into a catholic school, travel (squeezyjets €20 flights), dine out, and save a little. This would not be possible anywhere in the US including SF. Child rearing costs are punitively high in the US. Medical was less than 10% of my salary.

If my calculation is right the typical 2BR apartment in SF is $5000/month. Or $60000/year. That is almost 1/3 of $200k SF salary. Add childcare at another $12000/year. And medical.

It doesn't seem as far as lifestyle they are that far off. CoL plays a huge role. This is the typical American attitude at looking across the pond and not knowing how the other side lives but just assuming it's that bad.

You really do need to hire experienced people, often with families and expectations for a higher quality of living conditions, etc., who aren't particularly interested in the youth culture offerings of Berlin.

And yet these startups, everywhere, are able to do exactly that. They use equity as a carrot to lure experienced people from a sure thing all the time.

[AndreyErmakov]

>> I made 50k in a more expensive city, Paris. From that my partner and I were able to buy a flat, put our son into a catholic school

Having a partner doubles your income. More, if French taxation works in any way similarly to the German system, then an official relationship puts you in a different taxation category. Having children moves you into yet another category where your net income noticeably improves. You're probably making an equivalent of 100K for a single person without realizing it.

>> And yet these startups, everywhere, are able to do exactly that. They use equity as a carrot to lure experienced people from a sure thing all the time.

Not really. Everywhere where I've been I've only seen kids writing code. Anybody who is senior has always been an independent contractor, and it's usually them who actually advance the work by leaps and bounds. But those, today you have them working for you, tomorrow they're elsewhere. And with the young and inexperienced, you won't accomplish much.

Also, experienced people with families usually ignore any talks about equity and start the initial offer analysis with a calculator in their hands. I'm yet to encounter a true senior specialist with family obligations that takes equity over hard currency.

[Xylakant]

> Having a partner doubles your income.

That's only true if the partner earns about the same as you do. Being married (or in an official relationship) lowers your tax burden if you're earning unevenly (you're basically taxed based on the average of your wages in a system with a progressive tax rate), but that's all. It doesn't magic any money into existing. If you're both earning the same, you savings are exactly 0.

What having a partner really helps with is sharing costs. You only need a single flat (but probably a larger one), a single household, maybe share a car, ...

[p4wnc6]

I've contemplated your comment for a while now and I think there is no way for me to reply to it except to say that I truly do not believe you.

I'll add one caveat -- if you are saying that you and your partner both earned around 50k euros/year (combined household income of around 100k euros/year), then I would believe you, and it would not be surprising nor would it contradict anything I'm saying.

If instead you are claiming that you supported the kind of lifestyle you describe on a 50k euros/year salary, I simply do not believe it.

If you want to equivalently spend about 1/3 of a 50k salary on rent in Paris, that will be 1388 euros/month, or $1534 / month. It's ludicrous for you to claim that you can easily find a 2-bedroom apartment with clean accommodations and a reasonable commute distance from central Paris for $1534/month. So, very likely, you'll be spending more than 1/3 of your income on rent in metro Paris, if you earn 50k, so a greater fraction even than in SF. It's actually quite a lot more than 1/3 after you take into account taxes. (Also, re: medical, I've worked at large & small, young & old companies and only 1 out of the 4 has required me to pay any premium on medical insurance, and even then it was low. I know this is not always the case in America, but you definitely can find jobs that provide this if it matters to you.)

When I lived in Paris in 2010, I lived near the Exelmans stop (close to Parc des Princes), which was a long-ass trek into the city center (and even longer for me going to Universite Paris 7 for work). It was a 1-bedroom apartment shared between me and a flat mate (I slept on a pull-out sofa). There was no dryer, only a washer, and the water closet was separate (across the whole apartment) from the bath/shower, and had no sink. We also had to flip a metal sheet up onto the top of the washing machine in order to have any counter space when cooking.

That apartment was 1300 euros/month (650 split between two roommates) and we were only given that price because the apartment owner said he found the two of us (graduate students) to be especially responsible and was hoping for good stewards to take care of it, so he offered a discount down from the 1500 euros/month he listed originally.

Thus, from my own experience, 1/3 of a 50k salary in Paris will if you're lucky get you a very cramped 1-bedroom with sub-par appliances and accommodations that is way outside the city center and requires onerous commute times.

This was in 2010, so I can't imagine how much prices have risen.

Absolutely no way will you be able to afford a 2-bedroom place on that budget unless you're way outside of Paris. And with the remaining ~ 30k euros not spent on rent, you will be very unlikely to afford private school and the rest of what you claim -- and I'm not even factoring in the much higher tax rates.

Even looking on lodgis right now, even all the way out in the 16eme where I lived before, I'm seeing rents of 2500 - 3100 euros/month for anything with 2 bedrooms. This is somewhere around $3000. Sure, yes, that's lower than in SF or New York, but just as I have been arguing, it's not lower by a large enough amount to justify the drastic reduction in wages.

Facing these prices, I'd be much, much better off earning in the high $100k range in SF/NY than I would be earning anything below 100k euros in Paris/Berlin/Amsterdam/etc.

But pretty much the only country in all of Europe where a visa worker can actually approach a 100k euro salary is Switzerland.

The reduced cost of living is not enough to justify the even-more reduced wage you're paid. It just does not make economic sense. If you have access to developed American job markets, you are better off in real wage terms than in almost any situation possible in Europe.

It's deeply unfortunate too. I absolutely loved life in Paris. I love spending more time at meals, less focus on consumerism, greater focus on closeness with friends, greater focus on culinary pleasure. I felt (and still feel) I would fit in well, be productive, and happy living in Paris. Except that for the wage I can earn there, I would struggle to get by, and it's absolutely not worth it to suffer the stress of that struggle. I wish it were differently, really. But it's just the wage reality.

[AndreyErmakov]

A bit of feedback from someone who tried to make it in Germany with a 40K salary (in the south) and couldn't. It's just not doable. You need at least 60-70K to get started in medium towns, and around 80-90K for large expensive cities. Otherwise you either have to downgrade your standard of living to that common in third-world countries or accept it to live with a chronically empty bank account and most likely with a long-term debt as you're trying to pay back your initial accommodation expenses. Cheap is an illusion for a brochure.

[Xylakant]

You really need to check up on what 3rd world country life style is. I used to live in Munich on a 45k wage and while I wasn't living in a huge flat in a posh area, I made a comfortable living. Granted, that's been a while ago, but even now my cousin as a policeman in Munich is far far from anything even resembling 3rd world. And he's certainly not earning 60k.

[AndreyErmakov]

Something like living in a flat infested with insects, walls not properly isolated making it pretty cold in winter with the heating set on maximum so you need to sleep in a sweater and a jacket, broken electrical wiring and the lights shutting down every now and again, a mixer that could not deliver a constant temperature water stream. Loud music, smoking, a construction place less than 100 meters away. Was my reality in Stuttgart. Couldn't find anything better. Or, more to the point, I could but that would necessitate a salary of 80-90K to be able to pay back whatever expenses such a rental would incur.

I know of course that even by German standards it's a luxury. Many working people (non-IT) can only afford a room.

Sometimes I think the government really needs to step in and cap the rental prices to 1/3 of the average salary in the area. Otherwise that inflation never ends.

[ghostwriter]

Plus the total amount of taxes (Income, VAT, GEZ/ARD) a person has to pay on a wage higher than the average in Germany, and inability to legally keep multiple citizenship, make the location even less appealing than CH and UK in a long run.

[philefstat]

no one is stopping you from offering your employees higher wages