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Comment by adventured | Hacker News Reader

The parent's premise is that it will make the US more powerful economically and make its tech companies more dominant. Which is exactly what it will do.

The local tech labor supply will go to work for US corporations, which pay better than most everyone else. That will cement the US hegemony globally in tech (the sole major exception being domestic China, and to a far lesser extent domestic Russia). The US tech juggernaut will buy up the world's talent without having to plant expensive offices everywhere; that will occupy the talent pool and reduce competition to US tech.

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It goes both ways: local talent will learn from the biggest companies in the world without having to leave, meaning their know how can be turned to local entities as well.

For the pay, eventually it settles down as more and more companies try to see what they can get away with. US companies won’t be paying boatloads of money eternally (they were already resorting to offshoring to skimp) and local companies will have to align to get people to work for them.

> It goes both ways: local talent will learn from the biggest companies in the world without having to leave, meaning their know how can be turned to local entities as well.

It really doesn't. You end up with a whole segment of engineers that effectively become invisible to the local tech scene, because they are way above the local rates. Local companies are, basically, a waste of time for them.

Also, keep in mind that working for a foreign subsidiary opens up many additional visa to someone who wants to relocate to the US main office. So a "first remote" approach might actually accelerate brain drain in the long run.

Unfortunately I agree with this - I'm currently doing some work in tech across sub-saharan Africa and what we're seeing is that local devs from Cameroon to Kenya to Tunisia (okay not sub-saharan but we happen to have an office there) who are any good are now working on the global marketplace and not available to local companies with rare exceptions (e.g. junior who haven't figured out how to compete globally yet or happen to both have the preference to work in person and don't want to move away).

It's a valid point, but it's not the whole story. When there is too much of a gap between the local scene and the global scene, there is an isolation effect.

But it doesn't mean these engineers live in their remote bubble. There will be a halo effect of showing the way to local talent, we've seen when subcontracting html integration to a remote shop. Once the contract and legal framing was established, it was easier for us to ask their junior member to do administration tasks or other basic data entry tasks.

The other path is for these higher level engineers to move directly to high level positions in local firm. You'll see a junior engineer by EU standards move to a CTO like position in a local company or startup.

All in all, I think the local part still tremendously benefits from having highly competent remote workers.

> But it doesn't mean these engineers live in their remote bubble.

They kinda do. Mentoring, for instance, will happen with employees of the US corp. You'll effectively have the best devs in the foreign country mentoring early career Americans at HQ.

> The other path is for these higher level engineers to move directly to high level positions in local firm. You'll see a junior engineer by EU standards move to a CTO like position in a local company or startup.

Does that actually happens? I mean, I can see that a senior engineer at FAANG matches the level of some local companies CTO, but will these local businesses really give out such a role to an engineer barely in his 30's? That's of course if he hasn't transferred to HQ yet...

> It really doesn't. You end up with a whole segment of engineers that effectively become invisible to the local tech scene, because they are way above the local rates.

If remote salaries will be significantly higher than local ones many governments will be tempted to raise/introduce taxes on foreign income (and in authoritarian ones it is easy to implement). Since cross-border payments in most countries are closely monitored it would be not hard to enforce. Which in turn would make local jobs more attractive in comparison.

> many governments will be tempted to raise/introduce taxes on foreign income [...] Which in turn would make local jobs more attractive in comparison.

That's a double edged sword. Because your top performers are now seeing the local government trying to fleece them and it just makes coming to the US even more attractive.

It would also be a red flag for anyone in the country, to be fair. Instead of looking at what's wrong with the countries' tech ecosystem and fixing it to help local companies innovate and compete, they just rent-seek successful companies.

Argentina did that, their brain drain was INSANE, we had thousands immigrate to Uruguay.

The holdovers jump through all kind of hoops, many involving crypto.

The salary gap does decrease, here in Uruguay companies are paying what would have been thought of as insane just a few years ago (still 50% below US rates, but way way higher any other job), and we're getting thousands of people immigrating from all over Latin America and even Spain.

It does make providing to local companies much less desirable.

> it will make the US more powerful economically and make its tech companies more dominant. Which is exactly what it will do.

Why wouldn't other nations react accordingly? What power does the US have to stop this?

1) Other nations increasingly have a large supply of high-skill talent.

2) Other nations will use capital and subsidies to launch their own tech firms employing their own workers. There are startup accelerators spinning up all over Europe and Asia to capture, retain, and reward domestic talent. They see how the game is played now.

3) Other nations will create more regulations that limit how much US tech companies can participate in their economy and monopolize their citizens as consumers. This is already happening with major international antitrust rulings hitting Google, Apple, and Facebook. This is the nail in the coffin. They will foster and protect their own industry at the expense of the US.

There are many more international tech companies participating at the global stage these days. Atlasssian, JetBrains, Spotify, SoftBank, TSM, ASML, miHoYo... Not to mention all of the Chinese tech companies popping up. Epic Games is 50% owned by Tencent.

This trend will continue. The US only has 300M people, and it's not growing with the same significant postwar tailwinds it once had. It can't keep the wealth and talent monopoly forever. Just look at how much the middle and lower classes are hurting as a symptom of this global rebalancing.

You can also look to other industries. Automotive, aerospace, etc. The US isn't peerless anymore.

Not saying this is good or bad, but it's definitely happening.

The US has the tech companies MASSIVE wealth to stop this. It is all well and good to subsidize local tech companies, but for a majority of junior/senior devs you can't compete with $250K/yr in pay from FAANG companies whose stock won't stop rising and whose name on resume basically sets you up for life (exaggerating, but its not that far from the truth for a non-US and even US developers)

Your third point doesn't make any sense to me as no country will restrict their own citizens from working for a foreign company...earning massively higher salaries than local jobs (more money earned locally is more money spent locally... all metrics that nations care about will go up). Monopolizing your citizen's attention != monopolizing their talent.

Every company you just mentioned added up doesn't even equal or come close to Google's market capitalization (Atlassian, 150B, Spotify, 55B, TSM, 550B, ASML 350B, JetBrains, private, but some say 7B?, Epic Games, 30B) and of note, TSM and ASML draw much of their valuation from hardware than software.

Europe undervalues their engineers - and it seems like it's some sort of cultural thing that favors management. Their tax structure isn't great either, there's a reason zero billion dollar companies were founded in Europe (with the possible exception of Spotify). There's also the cultural pessimism and ambition being 'uncool' - there's a similar thing in Australia/New Zealand (at least I've heard from immigrant friends that moved from there). The 'tallest poppy gets chopped down' basically the opposite of the American idiom 'the squeaky wheel gets the grease'.

Even outside of Europe places like Toronto don't operate with the right investment mindset to actually create wealth: https://alexdanco.com/2021/01/11/why-the-canadian-tech-scene...

American optimism and ambition, really valuing engineers, generous equity and culture are a big part of this. Companies outside of America have been losing talent because they've been fucking this up, I expect things to get worse for them as geography is even less of an issue for working for American companies than it already is.

Devon is basically making this point, but the title is confusing. It's not the US companies that will lose the monopoly on talent, it's the US geography. The US companies will increase their monopoly.

> Europe undervalues their engineers - and it seems like it's some sort of cultural thing that favors management.

It's something that I observed as well.

> American optimism and ambition, really valuing engineers, generous equity and culture are a big part of this. Companies outside of America have been losing talent because they've been fucking this up, I expect things to get worse for them as geography is even less of an issue for working for American companies than it already is.

Don't forget that companies who may have been hesitant to sponsor a visa for an unknown dev might be a lot more willing after having him work for a year or two remotely. And this remote employment also opens the possibility of different visas (L1 comes to mind).

I actually think we might see a larger drain to the US in the medium term. And I'm all in for that, if Europe wants to pay to educate engineers then waste their talent not valuing them, send them here!

I'm from Italy but working in Switzerland for a FAANG company. My theory about the management-heavy way to do things in Europe is the following: in Europe is hard to fire someone unless there is a clear and willingly negligence from his/her part. Engineers' output is somewhat easier to measure than "fluffy" (pardon my lack of better words) tasks performed by management and hence it's hard to prove a manager is doing nothing. Therefore, people tend to gravitate to these positions because they almost certainly guarantee job safety. In my personal experience this happens disproportionately much in countries where worker unions have more sway (like France, Italy, and Germany). Also in my opinion it's not a coincidence that such countries create companies that are bureaucratic behemoths in which there are several different committees to take every small decision. That's how management justify its existence.

This is the main reason that pushed me to go to Switzerland to work for an American company. I feel this is the sweet spot when considering worker rights, salary/purchasing power, interesting work without too much bureaucracy, quality of life, and work-life balance.

I'm unsure about this given I see the same attitude with loads of developers who carry a senior title, have been in the company for many years but barely outperform a junior with a few years of experience.

My more cynical take is management and management-adjacent roles are easier to climb to and more abundant, pay better than the equivalent technical-only title and since managers largely decide what is going on, they'll obviously provide job security for themselves in whatever obscene way possible. At the same time culture views a manager as something noteworthy and of a higher rank already, which loops back and reinforces itself through payment, work and lifestyle, which then loops back to the way culture views it. The same can't be set for most developers who aren't at least partially dabbling into self-employment, entrepreneurship or management themselves, which then further reinforces the manager > developer mindset.

>no country will restrict their own citizens from working for a foreign company

This might surprise you, but some countries manage to achieve something like that. In Austria for example, if you go freelance (self employed) you'll actually end up paying more tax than being a FTE (which has already one of this highest taxes in the EU) while losing all the benefits of being a FTE like PTO, overtime and such.

So yeah, turns out high taxes are a pretty strong deterrent.

Is more tax really being paid or is it simply that freelancers become responsible for paying employer payroll taxes?

In the US both employees and employers pay social security contributions. Going freelance here means you must pay both of these, double the amount an employee would see withheld from their paycheck. But it's not an extra tax. The government is still getting the same amount of money in total.

As a freelancer you need to set your rates appropriately to account for the payroll tax, PTO, etc. that would be paid if you were an FTE.

Something similar in Croatia too. Some years ago they've introduced freelancer laws and pretty much everyone in this industry who was paid by foreign firms was using this.

But relatively recently the government changed their minds and said that if more than 50% of your income comes from a single employer then you're not a freelancer, and these laws don't apply.

So the option is to take a 60%+ tax on your income or find a job with a local company which then works for a foreign company. In latter case, they are nothing more than a middleman taking a smaller (but not much smaller) cut than the government while providing you with next to nothing.

So it doesn't make much time to figure out who lobbied for reversal of those freelancer laws.

> In Austria for example, if you go freelance (self employed) you'll actually end up paying more tax than being a FTE (which has already one of this highest taxes in the EU) while losing all the benefits of being a FTE like PTO, overtime and such.

This is the case everywhere in Europe. I don't know if it's a literal policy meant to discourage this or it's just that freelancers are easy political targets since they tend to be disorganized/disunited.

>This is the case everywhere in Europe.

It definitely isn't. In most of Eastern Europe, freelancers pay peanuts in taxes in order to attract foreign investment. Which is why there tech sectors boomed so much in the last couple of decades to the point devs in Poland or Romania can take home more than their counterparts from richer countries like Austria. Granted, they also get no benefits, but when you take home several times the average national pay, you can actually afford to buy a decent house and maybe fund your own early retirement if you're good at investments.

>I don't know if it's a literal policy meant to discourage this or it's just that freelancers are easy political targets since they tend to be disorganized/disunited.

I think it's a bit of both. Trying to force your local talent who's education was taxpayer funded to only work for and support local business, instead of helping build another nation's champions (remote brain drain). A short sighted move in my opinion which just suppress wages and produces no local champions thanks to shit wages and a lack of opportunities.

In Romania freelancers pay slightly fewer taxes but regular employees pay no income tax if their profile and the company profile match some rather easy to meet conditions.

I don't know about Poland.

Engineers alone don't make a great tech company. Because there is a global engineering shortage but not a global sales, marketing, product management, UX, etc. shortage all of the knowledge on how to do those functions effectively won't spread as quickly (if at all) and will have to be learned locally.

> global sales, marketing, product management, UX, etc. shortage

FAANG have already spent years building up these capacities in Europe. Sales in particular is incredibly local (as one might expect).

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