[slivym]

Here's a slightly related open question: Are Engineers in the US just much richer than in the UK?

For perspective, I started my career with an MEng in Electronic and Electrical Engineering as a Hardware Design Engineer at £35k (I out-earned most of my fellow graduates). It seems like these salaries are just comically disjointed from my entire experience of life. Can anyone here speak to the differences? Everything I've seen points me to Californians just living an incredibly well-off lifestyle, but everything I read also indicates the people who have those lifestyles do not feel well-off?

[nemo44x]

As a hiring manager (not at Google) I would say yes, and significantly so. EU employees make far less than equivalent USA colleagues when factoring in job title and location. It costs a lot to employ someone in the EU and the workers are well protected. I can not easily terminate an employee in the EU like I can in the USA. Taxes paid to employ someone in the EU are significantly higher than in the USA.

This cuts both ways as you can see. You'll make far less in the EU generally but you have better job protection and the additional taxes we pay to hire an EU employee hopefully go to government programs you like. However, if you're an in-demand employee who does good work you're going to make significantly more money in the USA generally speaking.

The good news is the UK is compensated better than most EU countries in my experience. But still significantly lower than USA employees in the same role.

However, you get health care out of that and can retire early with a lowered risk in terms of health issues.

[electrograv]

> However, you get health care out of that and can retire early with a lowered risk in terms of health issues.

I’m not aware of any major tech company in the US that doesn’t offer excellent health insurance and retirement plans. And the quality and availability of healthcare in the US is arguably the best in the world, if you are insured (that’s the ‘catch’ I suppose).

[jeffwilcox]

Modern American tech firms only offer insurance while you work for them, it is not a lifetime benefit. As a result, you stop working, you need to go hunting and paying for your own healthcare.

[jekdoce]

If you decide to retire early (say 50), before medicare kicks in (at 65), then you are on the hook to buy insurance yourself. That's maybe the difference between US and Europe that the above commenter refers to.

[foldr]

You still have to factor in the cost of medications, doctor's visits, etc. etc., which can run pretty high even with a good plan.

[laurencerowe]

I moved from the UK to the US six years ago. The short answer is yes, but the nuances are interesting.

The US has higher income variance, if you're on the 90th percentile of the income distribution you're going to be earning a higher multiple of the median than in the UK (about 2.6 in US vs 2.0 in UK, source as below.)

Software engineers in the US are also higher up the income distribution than in the UK. In the UK in 2017, the [1] median salary for full time 'Programmers and software development professionals' was £41,314 vs £28,759 for full time employees. In the US [2] it was $97,770 for full time 'Software Developers and Programmers' vs $37,690 for full time employees. This puts UK software developers just above the 75th percentile and US software developers just above the 90th percentile.

Then there's another step up when looking at big Silicon Valley tech companies, particularly for senior engineer roles and especially the post-senior engineer roles which don't really exist outside of the the big tech companies.

Another big difference is that the GBP has depreciated significantly against the USD over the past 10 years. It went over 2.0 in 2007 and is now down to 1.3. Working at a big tech company in Silicon Valley now feels a little like working for a bank in London before the 2008 crash.

[1] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwor...

[2] https://www.bls.gov/oes/current/oes_nat.htm

[lordnacho]

The UK is just very skewed, due to finance. I studied in the UK, and there was a 6 month placement internship programme.

Engineering firm (industrial measurement) wanted to pay me $11K to be an engineer. Marketing department at a major semiconductor said £15K. So I took it. My friend at Goldmans got £37K.

So guess what I did after uni. I even met loads of people in finance with engineering degrees who said they were now earning multiples of what their previous bosses in engineering were earning.

Anyway, if you do have tech skills, finance is after that. Particularly right now as all the trading is going full auto. Amazingly there are still places that don't have straight through processing in place, so plenty of work. At the fun end there's a lot of demand for people who can write trading algos, which I did for a long time.

This is after years of IT people in finance being second class citizens.

[spbaar]

My understanding of finance as vaguely magical makes this easy to believe. Buy why does does engineering pay so low in UK?

[lordnacho]

Mystery to me as well. The only people I know from the course who do it live far from London. Even then I'm not sure how it makes sense when you could get a remote job.

[Nursie]

UK software salaries are a joke.

I get a lot of feelers from agents looking for 5-10 years experienced, capable software guys and looking to pay in the range of your grad salary for them. The embedded world seems particularly bad for this but it's rife throughout. The US, Canada and Australia all pay far better, often multiples of what's on offer at home.

The only way I've found to come close to the pay I could get overseas is to become a contractor and try to land work in or around finance. Even then it's hard outside of London.

The problem in the UK is, AFAICT, that managers and company owners see software guys as grunts, floor staff, no different to hiring other generic office staff. They pay poorly, they have low expectations and they get people in who are broadly in line with that - demotivated, poorly skilled, unproductive. It's a viciius circle of low expectations and low rewards.

[richardknop]

Agree with everything you have said (have worked in London as both perm and later as a contractor for above stated reasons).

But to be completely fair, UK (or London, to be specific) is still the best place in whole Europe for software engineers. Nowhere in Europe you can make close to what a skilled and capable contractor in London can make.

It's not comparable to Bay Area but it's not that bad actually compared to rest of Europe. You can at least make a decent salary, although it's all cash and no stocks/RSUs... But you can invest the cash you make as a contractor into equities of companies you believe in.

Plus the flexibility of contracting is very nice. I doubt Bay Area engineers can just decide to take 2 month break and go to Bali to relax. As a contractor in London, you can easily finish your contract, take couple months off, then come back and start a new contract. That sort of flexibility is pretty nice.

[Nursie]

That is true.

It's not a bad life :)

[sverhagen]

I moved to the Pacific Northwest from the Netherlands, and I'm obviously observing the world around me with similar questions.

First, you need to factor a cost of living adjustment. Oregon seems a bit more expensive than the Netherlands. Bay Area is a lot more expensive than Oregon.

I think the big kicker is still the bigger range of salaries. People in the proverbial mail room make a lot less here than they do in the Netherlands. CEOs and board members make many times more here than they do in the Netherlands. Software folk are probably on a similar relative position on that spectrum between here and the Netherlands. Hence making more here than in the Netherlands.

Since you're still looking at the people below and above you in similar ways, you don't always perceive the difference with the mother country much. But I do get self-conscious when talking to some of the people "back home".

[cco]

>First, you need to factor a cost of living adjustment. Oregon seems a bit more expensive than the Netherlands. Bay Area is a lot more expensive than Oregon.

This doesn't gel with my experience at all and the numbers don't bear that out either[1]. Cost of living in Portland is significantly cheaper than the Amsterdam, granted that San Francisco is quite a bit more expensive than Amsterdam.

From my experience it's still no comparison, you get paid much more in the US than anywhere in Europe, so much so in fact that sometimes I balk when I hear salaries from Europe. Huge perk you guys get is vacation time, you get much more guaranteed time off than even most highly compensated people in the US. Some better benefits too, e.g. maternity/paternity leave, but you have significantly lower salaries even before taking into account taxes.

[1]https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

[sverhagen]

I didn't live in Amsterdam. Unfortunately that site doesn't let me take the average for the Netherlands. Amsterdam is the capital, perhaps fairer to compare it with New York. If you compare Eindhoven with Portland, the numbers seem more in support of what I was saying. But I should have specified that better. Nice site, I'll be using that in the future. "Anecdotally", it's attractive to compare Eindhoven and Portland, because they're both "small big cities" (relevant in their own right, without being the large token cities that define their respective countries).

[whiskyant]

To answer your question, yes, pay in SF/CA/USA definitely outweighs the increased cost of living. Software engineers here are paid more than anywhere else in the world.

It makes sense though since the wealthiest tech companies in the world are here, the most talented engineers gather here for that reason, and companies can afford to pay high compensation packages in order to get the best talent.

I don't expect other parts of the world to increase software engineer comp until they start producing much more billion dollar tech companies.

[slivym]

The reason it doesn't make sense to me is that there are clearly engineers in the UK who are as talented as the average engineer in silicon valley and are unwilling to move to the other side of the world. There are also many many many companies in the US that have offices in the UK. Given that UK engineers appear to earn no where near their US equivalent I would have thought there would be a strong incentive to hire more in the UK and therefore drive up wages rather than continually pump money back in silicon valley.

[illumin8]

Clearly, a talented engineer in the UK might be just as smart and experienced as a principal engineer at a big tech company in the US.

But, this doesn't have to make sense for it to be true. It's simple supply and demand economics. There is a greater demand for top-tier talent in the SF Bay Area because most of the technical leadership is there and they want their best engineers working closely with them. It's not hard to understand.

I read once that the single most significant indicator of where a large company will locate its headquarters is the CEO's home address. It doesn't take a rocket scientist to know that if the CEO lives in the bay area, so will his top leadership, and so will their top employees.

[malvosenior]

Yes, I think they're more well off in general. The UK in particular pays developers very poorly.

That being said housing costs in California are no joke, although you can find some analogies in London. Not sure how devs can afford to live there tbh.

It makes sense that they would get paid this much, and quite frankly I think even the FAANG devs are drastically underpaid. The companies are printing cash and almost entirely powered by developers. The salaries sound high but execs are grabbing the vast amount of the real money.

[sjg007]

I mean, the engineers can leave and start their own companies. This is the whole thing about SV...

[dna113]

Those 3 companies pay significantly higher than your average software engineer as far as I can tell. I make close to 80k in Southern California and I don't stress about money but I'm also not retiring early.

[Tade0]

I've been struggling with a similar question lately (only Poland instead of the UK and... the UK instead of the US) and here's what I've come up with:

It's not about being paid poorly/well - it's about serving a specific market segment.

To give an example: I work for a company based in Poland so I get to do "Tier 3" stuff, namely churn out apps with a Java back-end and an Angular/React/Vue/whatever front-end. I make considerably less than your junior salary. 90% of job opportunities here look like this.

What about the other 10%? Sure, they're more interesting, but they're usually paid less. And I'm not even talking about startups - just regular companies who happened to gain the trust of an overseas client.

[iztyhi]

> churn out apps with a Java back-end and an Angular/React/Vue/whatever front-end

That's basically what all of us product engineers at FB do, it's just that there's so much competition for engineers here that they have to pay us well.

[Tade0]

I have to ask: how is all that not outsourced for half the price already?

[richardknop]

I think some companies tried to outsource stuff like this (Oracle, IBM) but they are slowly finding that there are real costs associated with outsourcing tech and it might be actually cheaper for the company to hire expensive developers in San Francisco but have them sitting in the same building as top management so the communication can happen in real time and engineers can fully understand business requirements rather than try to manage remote outsourced teams on the other side of the globe who have no idea what's happening at the HQ.

[shanghaiaway]

The work of a developer at Google is more valuable than at other companies, especially in Europe. Because they create more value with the same skillset and doing similar work, Google can pay more.

[barrkel]

Of course, the company doesn't need to pay you for what value you're able to create - they pay you what the labour market clears at, and pocket the difference.

[acchow]

> Here's a slightly related open question: Are Engineers in the US just much richer than in the UK?

On average/median, a big richer (a bit more than the higher GDP per capita would imply)

The dramatic difference will be comparing the 90th percentiles (top 10% of engineers).

The target companies pay new grads $120-150k total compensation (across salary, annual bonus, and equity). If you change jobs after 2 years, you're looking at $250k total compensation.

[kmonsen]

I worked for Google in London and SF, the was a significant salary difference but also some personal growth. Still it could be at least 2-3x

[slivym]

Right, I get the salary is 2-3x, but does that translate to a much bigger house? Better schools for your kids? Holidays to St Moritz?

Or is it more like, 2-3x most of which goes into rent, health insurance and local taxes?

[kmonsen]

At least in Google they pay almost all of the health insurance. Taxes are slightly lower. So yes you can save a lot. It is very suburban so you will have a larger house then London, but it is not a city. Prices for apartments/houses are high, but you can find something that doesn't eat the whole salary and if you buy a house you hopefully can sell it for more later.

I was a bit shocked at first how dated silicon valley looks at least compared to the price. And the commute is soul killing. Public transport is worse then British trains, with the added problem that the stations are in useless places.

But the weather is great and the job opportunities for software engineers are fantastic. Dating also sucks I have heard.

[acchow]

All the top tech companies will cover the health insurance bill. This does not come out of your compensation. You do not get taxed on this benefit.

Taxes in California are high, though not higher than in the UK.

Bigger house? Better schools for kids? Not really. Maybe if you're in the top 5% of engineers.

Holidays? You can do pretty much anything you want anywhere you want for holiday. Almost everywhere in the world is cheap compared to living costs in the Bay Area.

[asdfasgasdgasdg]

It depends on the level you're talking about. At the lower levels, then the difference might be spent on rent. (Although it's not like London is a cheap place to live.) At the higher levels, this is obviously going to be totally swamped by the absolute differences. If you take home $300k/y and a holiday in St Moritz is a priority, it is certainly affordable. (Although honestly it's not that great of a ski resort, even if it is posh. Come check out Colorado and Utah.)

[stephencanon]

A lot goes to rent/mortgage and taxes (US salaries are quoted pre-tax, in the income bands under discussion the marginal tax rate is around 50%), but especially for two-income households there's plenty left over for nice vacations. I prefer Zermatt, personally.

As sibling notes, all of these firms pay nearly all insurance costs for the employee. Employee contribution will be a few tens of dollars per month typically.

[barrkel]

A 6-figure salary, + bonus, + options / RSUs is quite achievable for an above-average software engineer in London.

It's much easier to do as a contractor / consultant. If you are looking to be hired as a senior engineer, it's hard to get an offer much over 85k, but that number is even easier to get to.

London is not northern CA. Depending on whether you value outdoors or culture, it might be better or worse. I far prefer London, and proximity to the continent. CA is fantastic if you like outdoor stuff though.

[mrep]

Probably. I started out at 120k total compensation 2.5 years ago out of college and now make 210k after a recent job switch. My net worth according to mint is already at 100k (Note: that includes 401k and I didn't have any college loans which helps) and I pay 100% of my nice apartment, all food, and even buy stuff for my GF who is in grad school (we have lived together since we graduated but I pay for almost everything because she is in grad school).

[Thaxll]

Most likely, I've read the other day a new grad that signed a $200k bonus / stock over 3 years in the bay area. It's just insane.

[mike22223333]

Why is it insane? You should be happy that a member of the middle class is doing well. We should expect this in our society, unfortunately programmers from lower class get happy much earlier.