When real estate is at such a premium in big cities (even with recent slides)[1], good schools free from teachers having to pay for their own materials expensive[2], and going to the emergency room potentially costing you thousands of dollars[3], you need a lot of money to attract and retain people.
Also, profits are higher because companies pay less tax[4], so even with higher salaries it's still good business to pay more to attract higher talent.
Houses in for example Munich are more expensive than houses in SF (2.3 mil in Munich vs 1.5 mil in SF), while no one in Munich is making anywhere close to the FAANG salaries. The solution is that the coders don't live in houses, but rather in smallish appartments instead (or, if they want a house badly enough, they live far away from the city and have long commutes).
Western Europe is basically poor-ish compared to the US, and US people who imagine average W. European to be as well off as average American (but with better security, free healthcare etc.) are deluded. They overall standard of living is way lower over here, we're just used to it so we don't complain.
Western Europe is basically poor-ish compared to the US, and US people who imagine average W. European to be as well off as average American (but with better security, free healthcare etc.) are deluded. They overall standard of living is way lower over here, we're just used to it so we don't complain.