[hocuspocus]

* Basic supply and demand. As long as you manage to hire developers, why pay more?

* The job market is a lot more scattered than in the US, there are fewer hubs concentrating software jobs. This dilutes competition.

* The job market is typically less fluid. This translates into more job security, but also a certain complacency.

* Europe hasn't seen the birth of many very-high margins software companies, generating millions per developer (off the top of my head I can think of SAP maybe, but that's B2B).

* Consequently, there's also less recognition for software developers, and their perceived value is lower than that of mechanical engineers for instance.

* Also, outdated management style is still fairly prevalent as you noted.

* VCs have no reason to push for salaries higher than necessary. European startups pitch cheap engineering as an advantage compared to being based in the Bay area.

I don't think egalitarianism has anything to do with our salaries. We might see the value in higher taxes, stronger labor rights, and a narrower income inequality. But I've never met a software developer who thinks they should inherently be less paid than say, a lawyer.

[doktrin]

I agree with all of your points, but want to add an observation :

> Basic supply and demand. As long as you manage to hire developers, why pay more?

I know of several companies (Norway) that are almost desperate for more talent - to the extent that they are turning down lucrative projects. Nonetheless, I am also not aware of any of them making significant changes to their compensation. I can only theorize as to why this is, but my sense is that it has to do both with a fairly static billing structure that doesn't scale with experience, and concern for parity within the organization.

[hocuspocus]

> concern for parity within the organization.

That sounds a bit silly. If you're doing so well you need to turn down contracts, why not look further out for new talent, attract people with generous relocation/signing bonus, and then give everyone a raise once your marginal revenue is increasing?

[doktrin]

I agree, but here's a counterpoint / devil's advocate argument -

It's broadly true that wages tend to be "sticky downwards", and that it's much easier to not give something than to give it and then take it away.

As you correctly noted, there's much higher job security in European markets relative to the US. This also means that companies might be reluctant to over-extend themselves in good times, for fear of having no effective way of regulating salaries downwards in a prolonged slump.