|
|
|
|
|
|
by mjn
3424 days ago
|
|
|
In what sense does it not work that way? And what do taxes have to do with it? I'm not talking about progressive tax rates, but about wider dispersion in incomes (which is what income inequality measures). If you have wider dispersion of incomes, generally you have more people making quite high salaries as well as more people making quite low salaries. I.e.: The 95th percentile American worker makes considerably more than the 95th percentile German worker, while the 5th percentile American worker makes considerably less than the 5th percentile German worker. And yes, the U.S. median is also higher, which is an additional effect, but not enough alone to explain the (larger) difference in tech salaries (they aren't identical income distribution curves just shifted by a +$X constant in the U.S.'s favor). |
|
|
And what income inequality is really measuring is just the mix of jobs. If you have everyone working the same job for the same amount, you'd have 0 income inequality. It's when you have a different mix of jobs that are valued differently that you get income inequality. America has a different mix of jobs, which changes our income inequality in comparison to Europe.
I think that the best way to explain the differences in software compensation is in supply/demand factors. The limited immigration, weak STEM education, businesses understanding the value of software, and inefficiencies with outsourcing makes it so that software developers can command a higher salary in the US because there's both reduced supply and increased demand.
So yeah. That's my problem. I think that there are clear supply/demand factors that explain the difference in compensation, and income inequality is the measure of a system, it is not an input variable.