This is something that doesn't make sense to me, I was trying to hire a developer for a side project and received an astronomical quote for around $25K for what seems to be a simple and basic site, the EU developer (UK specifically) quoted me around $1 to $2K and was equally as senior engineer (I checked both of their work and github projects)
This on top of now most software engineers are using AI Copilot and ChatGPT in their work which means that most quotes and salaries look very overpriced.
Am I missing something here?
You probably live in a cramped 60 sq.m. rented apartment, whilst your American counterpart lives in a mansion house in the suburbs of a major city.
You ride the public transport to work and your counterpart drives his luxury SUV.
renting in your 40s and making quite literally 1/3rd of salary an american sounds really cool now that i think about it
If someone in the US can afford a huge house in a popular and safe suburb, it is very likely they could also afford a smaller, luxurious condo in Manhattan, Los Angeles, or San Francisco.
Oh, it's way worse. Within 10 minutes' walking distance from my home, I have a professional theatre, a concert hall, a cinema, a library, multiple very good schools, museums, several shopping centers, hundreds of bars and restaurants, a farmers market, and a ton of other places. I'm naughty and barely consume anything to visit those places, not even a drop of petrol. I'm so deprived of luxury that I walk to work like a Depression-era pauper.
And I disagree that the quality of life is the same for someone who lives in a nice house vs small apartment, has to use public transport vs personal luxury vehicle and so on.
Pros and cons.
So are big European cities like Amsterdam, London, Paris etc. The only difference is that it's not guns but knifes, machetes, brass knuckles and what not.
Those are just problems of big cities, not some problem unique to the US.
The bubble finally burst and thousands were laid off, and the market is correcting itself slowly. Hopefully salaries will come back down to earth.
US techies are hated for a reason, because we're drastically overpaid compared to the skill and education that it takes (vs other white collar jobs) and we drive up costs of living for everyone else while contributing much less to society than your average doctor or engineer.
Covid made matters worse (I nearly doubled my salary switching companies during that time, although it was never my intent). The intensity of demand fueled even more unrealistic salaries, followed by even more intense layoffs.
In this environment, especially with our lack of social safety nets, you can't easily make a small and stable tech company that wants sustainable business instead of hypergrowth. Every startup aims to be the next Alphabet / OpenAI, instead of meeting some practical need in a niche.
The US has always been a gilded society with the capitalists driving society and economy, and we just happen to be higher up that pyramid for the time being, as their latest minions. Not because we are that special or that great, but just because they need us (for now) to recoup their investments. We're just pampered pawns in a sinister game, destroying cities and communities in our wake.
I'm glad Europe doesn't have the same mentality. Don't copy us.
The gap between Tech worker salaries in the US and abroad dwarfs the gap in any other industry by a lot, and in many cases may also be reverse (where the US employees are paid less).
And the bigger tech companies with insane wages gobble up way more devs than they need, leaving it hard for non tech US businesses to hire developers. We didn't care because it upped our salaries, but now the flip side is we've trained normal businesses to see us as unaffordable. You can't just have a dev or two paid a living wage to maintain a website anymore, you need a whole team or else just outsource the whole thing to Vercel etc. We've consolidated much of the labor side to SaaS instead of regular devs in regular companies.
Anyway, I'm not arguing against the reality of supply and demand, but the sustainability of a demand side built off short term hypergrowth vs stable businesses spread across sectors. It's just another dot com bubble and I think it's not great for US society to have these extreme wage gaps, and not great for US business to basically invest everything we have into tech/advertising bubbles and not much else.
Heck, there is a significant gap between salaries in the US and UK which pretty much eliminates nearly every cultural factor as well.
Why are employers paying over 2x to a SW developer in SF than they are one in London? There is no language or even educational advantage (I'd argue UK comp sci education has historically been far ahead of US education even)
https://www.levels.fyi/t/software-engineer/locations/london-... https://www.levels.fyi/t/software-engineer/locations/san-fra...
Why are those non SAAS companies not simply hiring up all the London based developers? Why are the SAAS companies paying their SF developers the salaries they are when they could double their workforce for the same amount by hiring them in London instead?
The obvious (and possibly wrong) explanation is that companies genuinely value employee colocation and were willing to pay a premium for that, and the obvious choice to colocate was the US since the largest absolute number of top tier SW devs are in the US.
Another possibility is that the demand/clients are largely located in the US so there's a benefit to hiring people living in the US who would better understand the market. I don't think much of this explanation though, both because it's not true that the US is that much bigger a market (and for most companies RoW is bigger than the US) and also because of the prevalence of US culture most people (especially in the SW dev industry) are probably well aware of US cultural peculiarities.
Its funny how in forums like here on HN people comment about layoffs, PIP's before vesting of stocks, unfair labor practices, etc. and then tout those hypergrowth companies as well and join on the money train looking at leet code exercises to get in and comparing total comp numbers and stock grants.
> you can't easily make a small and stable tech company that wants sustainable business
There are many examples of companies that do this, Basecamp for example. There are also company structures (like a worker cooperative) that do not resemble the common S-Corp pyramid where all the profits rise to the few at the top. I've never heard of a startup or tech company go that route. As much as startups have these cool mission statements about changing the world, its the same capitalism as other industries.
I've never complained about equity or such because I never had any, having never worked for a big tech company. Plus side, I never had to do leetcode either :) But even then, my last job was at a F1000 old-school manufacturer, and even there I was paid $100k, with free lunches, loose PTO, company paid trips, etc. -- all for making a simple frontend in React, utilizing less skill than I ever have before (because it's so specialized into that stack nowadays, vs the old days where you also had to deal with networking, sys admin, VMs, etc.) Those were cultural things they copied from tech companies. At other jobs before that, I was still paid much more than most of my peers, who had better education and who've worked their asses off for years. Before 2023, dev work could launch you into the middle class after just a few months of bootcamp and a good reference or two. What other profession is like that?
I think that's my primary gripe with modern US SWE: it's a get-rich-quick scheme requiring little actual skill or training, and sometimes, little actual work. The work isn't that hard, and something like Upwork is probably more representative of what a realistic market would pay (much less).
If I ever imagine myself to be fairly compensated because not everyone can do coding (which is true)... then I look at how teachers, adjunct professors, electricians, plumbers, truckers, etc. are paid and I realize yeah, no... I just sit on my ass all day, code a few hours a day and sit in on meetings and such and the money comes in. It's not even in the same league as other professions in terms of how hard you have to work vs how much you get paid. Especially when I look at my actual friends in tech proper, who work like 10-15 hours a week by their own admittance a week and make way more money. All around it just screams "bubble".
We're not paid this much because of our skills. We're paid this much because capital was hoping to cash in on the hypergrowth before it bursts.
Honestly you're looking in the wrong direction. Yeah, there are lots of undercompensated lines of work. But lots of white collar work involves even less actual work or competence than software engineering. Offices are full of people who are terrible at their jobs but basically just fail upwards. Local governments and public school systems have tons of administrative positions that get paid big six figure salaries to basically do no real work.
We're paid this much because the market pays this much. Its capitalism.
Yup.
"Fear and greed drive markets."
That well-known statement holds true not only in the stock markets, but also in any market where there are wild swings of supply and demand.
Human nature, short-sightedness, and ignorance, folks.
"Those who don't learn from the past are condemned to repeat it."
Citation needed. I doubt we’re at the level of “most”. And if we are, I worry (even more) for the quality of future software.
The thing is not only FAANGs pay great salaries in the US, there are tons of other companies that do it. In Europe it's the FAANGs + some trading firms and that's it.
This reduces the desire to perfect one's craft and people become chill & lazy.
Also, FAANGs in Europe suck and most of their good developers move to the US.
European state universities are pretty difficult and the requirements are much harder than US ones. No one hears sob stories - 59/60 is still a fail for 1 point, better luck next time. There are no privileges in Europe for sitting in first row.
It works well for many companies offshoring to cheaper countries which is still a thing.
So, why don't you use these services and do the work yourself then?
When I did contract work this was my strategy.
I usually help people hiring developers and when you get quotes that are that different with people on similar seniority levels it's usually because the requirements aren't specified enough.
I once wanted to take a project with BigCorp, my first offer was dead cheap since their requirements were consisting of two lines of text. So I gave them a feel of what I'd build for them within their tiny budget. 4 years later they still try to get somebody to build that thing for them, but specs are now 40 pages long and budget is still tiny. I dropped out 2 years ago (after providing n-th offer quoting 15x more than original quote), at the time I was already smelling a trap project, now I'm glad it went that way, I feel sorry I spent time preparing those offers.
For better or worse American Tech workers have decided to voluntarily give up (nay, aggressively demanded to get rid of) the geographical colocation advantage. Assuming the whole RTO movement doesn't work out (and with the resistance one can see I expect it not to, especially when office leases come up for renewals and decision makers are like, why pay for the office when we can sell not paying for it and offloading costs to workers as an advantage to them, and they're not coming in anyways), I suspect we will find out the truth of this hypothesis within a decade as American salaries converge with global salaries.
That's assuming AI doesn't make us all unemployable of course.
If you want something much more custom than that built from scratch, then I strongly doubt that you can get it done for $1-2k competently no matter where the developer is located.
To use a (somewhat poor) analogy, there’s a big difference in price between pre-built cabinets from IKEA and custom-built cabinets that exactly fit your space using your preferred materials and finishes even though both are just basic wooden boxes with doors that open.
AI has not impacted developer wages yet as far as I know. Pay expectations may have fallen a bit, but that’s got more to do with layoffs caused by interest rate increases.
You create a software product you can sell it anywhere not like you are bound by the country. This gets exploited by European startups that hire much cheaper talent and offer much cheaper services to US customers.
2. Venture Capitalism has gone wild in the US
3. the true cost of living, as in if you want proper health insurance + healthy living + security/peace of mind in the US is can be quite high, much higher then in the EU even through taxes are much lower (creating a huge gap between what seems to be the cost of living if you don't look into details and what is)
4. UK is not in the EU anymore, and the effect of leaving it are starting to hit hard
The eastern european developer outsourced the project to India too when i read the code signature, which I laughed about.
also websites in western europe can easily be 10-25k if you work with an agency.
you are wrong that real software engineers use AI tools primarily to write code.
