They level out both the upside and the downside. If you can never fire people, you're going to be very very cautious about who you hire in the first place. That makes it much harder to get companies into a bidding war that'll actually raise your wages.
I've had a few European teammates, and they usually come to the U.S. because they can make 3-5x what they could in Europe. You'll see that a lot in HN comments, where people talk about USD$400K FAANG compensation and European developers will be like "Dang, WTF, I'm just sitting here with my €70K salary".
Right now, going into a bust, everybody wants downside protection. You often make more over the long-term accepting some risk to pick the upside when it's available, though.
I think it's interesting to compare Switzerland with the neighbouring countries (e.g. France and Germany). I don't know about other companies, but Google Zürich pays much more than Google Paris or Google Berlin/Munich.
I think it's likely that the difference in labour laws is a contributing factor. Switzerland has very little by way of worker protection, instead placing a significant emphasis on unemployment insurance (Arbeitslosenversicherung).
I make almost exactly €70k in Sweden and I am _very_ happy not making more since I also have very very cheap universal health care, and very very few mass shootings in the public schools my children are attending.
Aside from the difference in labor laws, I've noticed a certain sense of entitlement coming from a very vocal cohort of people that appears to stem from such strong worker protections.
To be clear, that cohort is entitled to the protections they so often reference. What I'm saying specifically is that sometimes it shows. Perhaps it's a vocal minority, and this doesn't actually reflect a wider trend, I don't know. Some of the rhetoric I've encountered from this cohort though has come off as downright hostile towards businesses.
I've worked with many UK/Europeans. They are quite similar to us in skills and productivity aside from labor laws(excessive vacations, months/years of parental leave, impossible to fire etc.)
A good reason that often doesn't qualify is that business is down, macroeconomic conditions are expected to be unfavorable for the foreseeable future, and expenses, which for many businesses are dominated by salaries, need to be cut ASAP to ensure the business' long term survival and prosperity. Like now. Businesses in Europe simply have fewer options, like it's much harder to cut early and cut deep(hopefully minimizing future cuts) when trouble is ahead when you have to have protracted negotiations with unions and government agencies who have to sign off on your layoffs.
Union negotiations are about how to organise the layoffs, not whether you can fire the workforce or not.
And if you expect help from the government, you need to show that your layoffs actually have a chance to make your company survive. For example, you cannot fire the entire R&D when you are 1 year from product release.
Strong worker protections are a major reason that big tech and many other industries have a much smaller presence in Europe and pay far less to Europeans. You're worth less if you might be absent on parental leave for a year at a time. You're higher risk to hire if you can't be fired easily etc. Protections have a cost. My friends that moved to UK/Europe get half their former salary and have much higher living expenses and taxes. I also have several friends that moved to TX because compensation in Europe is terrible.
Maybe if you're from FAANG land. I took 10k cut (90k to 80k) from my salary leaving Seattle but gained a union, 20 more days of vacation, a 8% holiday bonus, 90% cheaper insurance, and 500$ less in rent per month in Amsterdam
Your pay cut wasn't significant because you apparently went from earning a ~40th percentile US SWE salary to earning a ~90th percentile Dutch SWE salary. If you had been paid a ~40th percentile Dutche SWE salary, you would have taken a 50% pay cut.
You took way more than $10k cut when you consider taxes involved.
Of course this varies state by state, but generally for tech, you net more in US on the average even when you pay for everything that you get with taxes in EU. Starting salaries even outside fang could easily be in like $130k in areas that aren't tech hubs and don't have an inflated COL - in EU this is unheard of.
Even for tech I’m skeptical of this, and so please cite if you have data to back it up. What are you considering part of what you get in, for example, Germany with taxes, but paid for out of pocket in the US?
You can look at the cost of living comparators, but here is a rough outline.
Starting salary in US for SDE is probably like 100k. Going of single income tax filings your approximate aggregate tax rate will be ~%15. if you have state income tax, prolly like ~20% aggregate.
In Germany you would start at something like $70k and get a 42% tax rate afaik.
So right there you get more than twice the money left over after taxes.
Living costs would probably be close to each other, rent is probably cheaper in Germany cities but groceries and goods are more expensive.
And health insurance and costs are a small percentage of the salary.
The only big difference is that in US you sort of need a car, but again, with monthly cost of a finance for a car you are still not hitting
The biggest difference in cost comes when you start having kids - in US you pay closer to 25% income for all things child related, so that eats into the extra money real quick. For outside of tech, if you make middle class salary in the 70k range, you are much better off in EU, because a lot of things are heavily subsidized.
It all depends on what you value. Dutch labour laws are not written for highly educated tech bros but designed to protect everyone.
Wealth inequality for instance is something that permeates political discourse. Americans don't give a shit about it at all.
Making society nicer for everyone and not leaving anyone behind.
>Making society nicer for everyone and not leaving anyone behind.
In the short term, Europe is much better at this than the US, but the long term sustainability of the European welfare state will be under serious threat over the next 50 years due to the horrible demographics of most European countries
Please cite if you have some sources to back this up, in particular the solvency of the welfare system across multiple European countries and the projected demographics over the next decades. I’m skeptical it’s as anywhere close to as bad as you state here.
I think it is because it benefits workers differently. People with high salaries would usually get even higher salaries in the states, whereas people with low-earning jobs would get less paid with a less stable employment. The HN selection is just skewed.
A friend of mine with a VERY sick disabled kid which prevented her from working night shifts in a home for the elderly would probably have gotten sacked by now hadn't it been for the Swedish labour laws that mandate that the employer tries to find a different position within the same qualifications in the same organisation. Sure, the union had to help and remind them of that obligation, but in the end it worked out for the best for my friend.
I don't think the laws are there to protect someone like me that could get another job, but to protect people like my friend.
Just like rent control does more than just "control the price of rent" because landlords change their behavior to optimize their financial returns, so do labor laws.
Strong worker protection ends up making the cost of hiring new workers higher. Companies react to those costs by a number of means like delaying hiring, hiring contractors first, firing within the probation period when they might not have normally, etc, etc. Whenever the laws are changed, a new "optimum approach" is developed.
And like rent control, labor laws often benefit the people who already rent/have a job. For people who are looking to rent/looking for a job, they can make it harder as the barriers to entry just got higher.
If, as a landlord, you know you can never raise the rent, and you can't evict a tenant except for very limited reasons, well then you have your own internal set of screening criteria and you only take the most qualified renters. It's far better to leave the unit empty for a few months because the loss of rental income is tiny compared to the financial loss of choosing the wrong tenant.
i see your point but i don't think this is true. i believe that bad tenants are uncommon but exist at all price levels. raising rent is not going to keep them out and they will have to be screened anyways.
i don't know how rentcontrol works elsewhere, but in germany generally it means that rent can't be raised more than once a year or 15 months or something in that range, and it can't be raised more than a few percent each time, but it doesn't mean that it can't be raised at all. not being able to evict a tenant is independent of that.
the general issue here is a power differential. big company vs small family. i know in the US there are more small landlords who only have a few houses or even one. but that is rare in germany. most are bigger businesses with hundreds of apartments, and with that the risk of getting a bad tenant is obviously larger, but the financial risk is also spread over all tenants.
> the cost of almost everything in the US is higher
Certainly not compared to Europe/UK. I have friends that moved there and have spent many weeks over there myself. Property, living expenses, taxes, and many goods are generally noticeably higher over there.
To counter your anecdote with mine, I’m always shocked whenever I return to visit the US how expensive basic things like groceries and rent are. Much more so than the Netherlands.
This is complicated, and it’s insufficient just to state that everything in Europe is generally more expensive than in the US.
I have no idea how you know from what I said to that. All I said is that available data does not allow you to conclude that the entirety of the difference in pay is due to difference in labor laws. It's not an extraordinary claim, it's quite tame in fact, I would self evident.
25% if you're a developer. To be a developer in Europe (minus Switzerland & the UK) is to willingly accept hundreds of thousands of dollars less for your labor, in return for benefits that might not exist by time you retire.
I am not sure, at least for France, that it's "all workers".
For example the "code du travail" is excessively complex as it describes many kind of different private sector workers with very different rights.
As a rule of thumb if you work in a large company you are well protected. In other cases it's very different, which partly explains the violence in the society.
If you need labour laws beyond basic safety stuff then you're simply not being paid enough.
I would far rather have sufficient income and therefore wealth built to be able to choose for myself whether I want to take time off.
I actually find it juvenile that people want employment to be this way.
What do they think is going to happen when they stop working? Or is the plan - again a juvenile one, seeking a parental figure - "I'll just work for a company until I die"? Have fun with that...
I've had a few European teammates, and they usually come to the U.S. because they can make 3-5x what they could in Europe. You'll see that a lot in HN comments, where people talk about USD$400K FAANG compensation and European developers will be like "Dang, WTF, I'm just sitting here with my €70K salary".
Right now, going into a bust, everybody wants downside protection. You often make more over the long-term accepting some risk to pick the upside when it's available, though.