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Comment by civilian | Hacker News Reader

Uhhhhhhhh income inequality does not have that kind of effect. Income inequality may effect the taxes paid by people, but it doesn't change salaries the way that you're suggesting.

America just has more highly paid jobs, because we've got some of the biggest companies and highest GDP per capita in the world. And this has the effect of creating a greater spread of income. It's a bigger, richer, pond.

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>[USA] has the highest GDP per capita in the world

Not quite, it has the 18th highest. Below Hong Kong, Switzerland, and Ireland all who pay less for engineering.

https://www.cia.gov/library/publications/the-world-factbook/...

A more appropriate comparison might be GDP per OECD region, where the United States absolutely dominates.

https://en.m.wikipedia.org/wiki/List_of_OECD_regions_by_GDP_...

That list was impressive until I read about what OECD is. It's a 35 country organization.

The US does have the highest GDP for any major country, though. The ones above it there are all quite small.

Switzerland, Singapore, Norway, Hong Kong and UAE don't match my definition of "quite small". Each of them has several million inhabitants.

The U.S has ~ 320 million people. So 2 magnitudes difference compared to some others. Additionally the U.S is quite large with many regions and sub-regions. Some regions have quite high GDP while others lower. So given that it's quite impressive versus much smaller and less populous countries.

In any case it's a stretch to make an apples to apples comparison when you have 2 magnitudes of population difference.

That way you could say the US is a small country because it only has ~1/4 of the population of China.

Just because a country has a smaller population it doesn't make it unsuitable to live or to compare economic data.

You're just being pedantic here.

There's a big difference between countries that above the US (top 18) on that list where there is a 10x to 100x difference. 1x (US) to 4x (China) does not a magnitude make.

Even given that I would concede that the U.S is a lot less populous country than China. Additionally, there's a lot of places where comparisons of stats are invalid because of that difference.

IIRC none of them even breaks 10 million people, the US has 320 million. Small areas can specialize in ways that are impractical for large areas. E.g. the SF Bay area has a very high GDP per capita, but you couldn't have the whole USA specialize in tech the way that metro does with ~7 million.

I wouldn't dismiss Switzerland. As we're discussing US vs Europe here, working in Switzerland is certainly an option.

This is not true... Google Switzerland pays more than in US (actually more, than anywhere else), especially if you take taxation and the pension system into account.

In what sense does it not work that way? And what do taxes have to do with it? I'm not talking about progressive tax rates, but about wider dispersion in incomes (which is what income inequality measures). If you have wider dispersion of incomes, generally you have more people making quite high salaries as well as more people making quite low salaries. I.e.: The 95th percentile American worker makes considerably more than the 95th percentile German worker, while the 5th percentile American worker makes considerably less than the 5th percentile German worker. And yes, the U.S. median is also higher, which is an additional effect, but not enough alone to explain the (larger) difference in tech salaries (they aren't identical income distribution curves just shifted by a +$X constant in the U.S.'s favor).

It's the causation that you suggest that's wrong. Income inequality is not an _input_ into this equation. It's the measure of a system!

And what income inequality is really measuring is just the mix of jobs. If you have everyone working the same job for the same amount, you'd have 0 income inequality. It's when you have a different mix of jobs that are valued differently that you get income inequality. America has a different mix of jobs, which changes our income inequality in comparison to Europe.

I think that the best way to explain the differences in software compensation is in supply/demand factors. The limited immigration, weak STEM education, businesses understanding the value of software, and inefficiencies with outsourcing makes it so that software developers can command a higher salary in the US because there's both reduced supply and increased demand.

So yeah. That's my problem. I think that there are clear supply/demand factors that explain the difference in compensation, and income inequality is the measure of a system, it is not an input variable.

GDP per capita is one of the worst metric you could cite

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