6 ms·

Wages being low is a good thing, no? CoL is significantly lower too which is great.

p4wnc6 10y ago
In what way are lower wages good for the employees you're trying to attract? While some aspects of cost of living are low, others are not low at all. I guess if you're looking for nothing more than a temporary lifestyle involving enough money to go to concerts and eat at restaurants, the wage is fine for a younger person in Berlin. But it's a fantasy to believe you can effectively grow a company that way. You really do need to hire experienced people, often with families and expectations for a higher quality of living conditions, etc., who aren't particularly interested in the youth culture offerings of Berlin. For these people, earning ~ 50k euros / year in Berlin is a way, way, way, way, way worse deal than earning ~ 200k dollars in San Francisco, despite SF's insane costs. You just simply cannot do anything with 50k euros/year in Berlin unless you have no outside obligations and are happy spending the money of minor lifestyle perks. I'm surprised that any of this is even controversial. The same is true for start-ups almost anywhere else in continental Europe too. To a very limited extent there are some companies in Amsterdam that actually pay a "real" wage (i.e. you can support a family, enjoy life, and save for retirement), and some across Switzerland, but not many. Thinking in terms of "yay, cost of living is low so I don't need much of a salary" is the classic immature analysis of a recent grad who looks at it more like a program for teaching English is southeast Asia than like they are actually working a job, building a career, etc.
- AndreyErmakov 10y ago
  A bit of feedback from someone who tried to make it in Germany with a 40K salary (in the south) and couldn't. It's just not doable. You need at least 60-70K to get started in medium towns, and around 80-90K for large expensive cities. Otherwise you either have to downgrade your standard of living to that common in third-world countries or accept it to live with a chronically empty bank account and most likely with a long-term debt as you're trying to pay back your initial accommodation expenses. Cheap is an illusion for a brochure.
  - Xylakant 10y ago
    You really need to check up on what 3rd world country life style is. I used to live in Munich on a 45k wage and while I wasn't living in a huge flat in a posh area, I made a comfortable living. Granted, that's been a while ago, but even now my cousin as a policeman in Munich is far far from anything even resembling 3rd world. And he's certainly not earning 60k.
    - AndreyErmakov 10y ago
      Something like living in a flat infested with insects, walls not properly isolated making it pretty cold in winter with the heating set on maximum so you need to sleep in a sweater and a jacket, broken electrical wiring and the lights shutting down every now and again, a mixer that could not deliver a constant temperature water stream. Loud music, smoking, a construction place less than 100 meters away. Was my reality in Stuttgart. Couldn't find anything better. Or, more to the point, I could but that would necessitate a salary of 80-90K to be able to pay back whatever expenses such a rental would incur. I know of course that even by German standards it's a luxury. Many working people (non-IT) can only afford a room. Sometimes I think the government really needs to step in and cap the rental prices to 1/3 of the average salary in the area. Otherwise that inflation never ends.
- ghostwriter 10y ago
  Plus the total amount of taxes (Income, VAT, GEZ/ARD) a person has to pay on a wage higher than the average in Germany, and inability to legally keep multiple citizenship, make the location even less appealing than CH and UK in a long run.
- philefstat 10y ago
  no one is stopping you from offering your employees higher wages
- yardie 10y ago
  I made 50k in a more expensive city, Paris. From that my partner and I were able to buy a flat, put our son into a catholic school, travel (squeezyjets €20 flights), dine out, and save a little. This would not be possible anywhere in the US including SF. Child rearing costs are punitively high in the US. Medical was less than 10% of my salary. If my calculation is right the typical 2BR apartment in SF is $5000/month. Or $60000/year. That is almost 1/3 of $200k SF salary. Add childcare at another $12000/year. And medical. It doesn't seem as far as lifestyle they are that far off. CoL plays a huge role. This is the typical American attitude at looking across the pond and not knowing how the other side lives but just assuming it's that bad. You really do need to hire experienced people, often with families and expectations for a higher quality of living conditions, etc., who aren't particularly interested in the youth culture offerings of Berlin. And yet these startups, everywhere, are able to do exactly that. They use equity as a carrot to lure experienced people from a sure thing all the time.
  - AndreyErmakov 10y ago
    >> I made 50k in a more expensive city, Paris. From that my partner and I were able to buy a flat, put our son into a catholic school Having a partner doubles your income. More, if French taxation works in any way similarly to the German system, then an official relationship puts you in a different taxation category. Having children moves you into yet another category where your net income noticeably improves. You're probably making an equivalent of 100K for a single person without realizing it. >> And yet these startups, everywhere, are able to do exactly that. They use equity as a carrot to lure experienced people from a sure thing all the time. Not really. Everywhere where I've been I've only seen kids writing code. Anybody who is senior has always been an independent contractor, and it's usually them who actually advance the work by leaps and bounds. But those, today you have them working for you, tomorrow they're elsewhere. And with the young and inexperienced, you won't accomplish much. Also, experienced people with families usually ignore any talks about equity and start the initial offer analysis with a calculator in their hands. I'm yet to encounter a true senior specialist with family obligations that takes equity over hard currency.
    - Xylakant 10y ago

In what way are lower wages good for the employees you're trying to attract? While some aspects of cost of living are low, others are not low at all. I guess if you're looking for nothing more than a temporary lifestyle involving enough money to go to concerts and eat at restaurants, the wage is fine for a younger person in Berlin. But it's a fantasy to believe you can effectively grow a company that way. You really do need to hire experienced people, often with families and expectations for a higher quality of living conditions, etc., who aren't particularly interested in the youth culture offerings of Berlin. For these people, earning ~ 50k euros / year in Berlin is a way, way, way, way, way worse deal than earning ~ 200k dollars in San Francisco, despite SF's insane costs. You just simply cannot do anything with 50k euros/year in Berlin unless you have no outside obligations and are happy spending the money of minor lifestyle perks. I'm surprised that any of this is even controversial. The same is true for start-ups almost anywhere else in continental Europe too. To a very limited extent there are some companies in Amsterdam that actually pay a "real" wage (i.e. you can support a family, enjoy life, and save for retirement), and some across Switzerland, but not many. Thinking in terms of "yay, cost of living is low so I don't need much of a salary" is the classic immature analysis of a recent grad who looks at it more like a program for teaching English is southeast Asia than like they are actually working a job, building a career, etc.

AndreyErmakov 10y ago
A bit of feedback from someone who tried to make it in Germany with a 40K salary (in the south) and couldn't. It's just not doable. You need at least 60-70K to get started in medium towns, and around 80-90K for large expensive cities. Otherwise you either have to downgrade your standard of living to that common in third-world countries or accept it to live with a chronically empty bank account and most likely with a long-term debt as you're trying to pay back your initial accommodation expenses. Cheap is an illusion for a brochure.
- Xylakant 10y ago
  You really need to check up on what 3rd world country life style is. I used to live in Munich on a 45k wage and while I wasn't living in a huge flat in a posh area, I made a comfortable living. Granted, that's been a while ago, but even now my cousin as a policeman in Munich is far far from anything even resembling 3rd world. And he's certainly not earning 60k.
  - AndreyErmakov 10y ago
    Something like living in a flat infested with insects, walls not properly isolated making it pretty cold in winter with the heating set on maximum so you need to sleep in a sweater and a jacket, broken electrical wiring and the lights shutting down every now and again, a mixer that could not deliver a constant temperature water stream. Loud music, smoking, a construction place less than 100 meters away. Was my reality in Stuttgart. Couldn't find anything better. Or, more to the point, I could but that would necessitate a salary of 80-90K to be able to pay back whatever expenses such a rental would incur. I know of course that even by German standards it's a luxury. Many working people (non-IT) can only afford a room. Sometimes I think the government really needs to step in and cap the rental prices to 1/3 of the average salary in the area. Otherwise that inflation never ends.
ghostwriter 10y ago
Plus the total amount of taxes (Income, VAT, GEZ/ARD) a person has to pay on a wage higher than the average in Germany, and inability to legally keep multiple citizenship, make the location even less appealing than CH and UK in a long run.
philefstat 10y ago
no one is stopping you from offering your employees higher wages
yardie 10y ago
I made 50k in a more expensive city, Paris. From that my partner and I were able to buy a flat, put our son into a catholic school, travel (squeezyjets €20 flights), dine out, and save a little. This would not be possible anywhere in the US including SF. Child rearing costs are punitively high in the US. Medical was less than 10% of my salary. If my calculation is right the typical 2BR apartment in SF is $5000/month. Or $60000/year. That is almost 1/3 of $200k SF salary. Add childcare at another $12000/year. And medical. It doesn't seem as far as lifestyle they are that far off. CoL plays a huge role. This is the typical American attitude at looking across the pond and not knowing how the other side lives but just assuming it's that bad. You really do need to hire experienced people, often with families and expectations for a higher quality of living conditions, etc., who aren't particularly interested in the youth culture offerings of Berlin. And yet these startups, everywhere, are able to do exactly that. They use equity as a carrot to lure experienced people from a sure thing all the time.
- AndreyErmakov 10y ago
  >> I made 50k in a more expensive city, Paris. From that my partner and I were able to buy a flat, put our son into a catholic school Having a partner doubles your income. More, if French taxation works in any way similarly to the German system, then an official relationship puts you in a different taxation category. Having children moves you into yet another category where your net income noticeably improves. You're probably making an equivalent of 100K for a single person without realizing it. >> And yet these startups, everywhere, are able to do exactly that. They use equity as a carrot to lure experienced people from a sure thing all the time. Not really. Everywhere where I've been I've only seen kids writing code. Anybody who is senior has always been an independent contractor, and it's usually them who actually advance the work by leaps and bounds. But those, today you have them working for you, tomorrow they're elsewhere. And with the young and inexperienced, you won't accomplish much. Also, experienced people with families usually ignore any talks about equity and start the initial offer analysis with a calculator in their hands. I'm yet to encounter a true senior specialist with family obligations that takes equity over hard currency.
  - Xylakant 10y ago