Am I missing something about US salaries here?

[Krayvon2]

I work in the UK, colleague works in the US for the same company.

We do a very similar job - Colleague earns around $158k per year. My salary is in £ and still a very good one but considerably less if you look at the exchange rate (probably half of US salary). However, this is a common trend with US vs UK employees in our company due to job market differences, experience etc (the sector we work in commands more of a premium over there).

With my UK salary I still manage to save a decent amount each month and pay all bills and mortgage etc.

Talking to US colleague about how in the UK we get paid on one set day every month (over there salary is paid in two installments each month) and they asked me how on earth I managed to make the money last all month.

They seemed to find it hard to believe it was possible to make a salary last 30 days and implied they struggled to make what they earn last over a couple of weeks! They've also made comments in the past about struggling with a surprise bill or having to put off a purchase.

I know lifestyles are more expensive over there but they spoke as if they earned peanuts so I'm wondering if I'm wrong to think that's a good salary? They get health cover through the company too so that's not an issue. Is there some other tax or something that I'm missing here? They are East Coast but not in most expensive area (not New York or Boston)

I’m in the US right now, visiting family for a milestone birthday.
Eggs, purchased this morning at a large regional chain supermarket cost $4 for a dozen, local cage-free. They were not on offer, that was just the cost.

I've lived in the US. Definitely more expensive than UK for similar kind of locations.
These were the big ticket items - others already mentioned them

1. Daycare. Expensive for all (but more in the US than UK for lwoer quality) up until 3, then UK starts to become cheaper. Most school districts don't have universal pre-k (reception) and if they do it's only half a day. My friend's school district provided no pre-k and only a half-day for kindergarten
2. Holiday care. There is also far less annual leave and sick leave than standard in the UK. And holiday camps were eye-wateringly expensive. More than anything I paid in the UK.
3. Rent/property taxes (folded into the rent if renting as on LL to pay). Yes, UK is high but US is higher
4. And of course health insurance. Yes, employers provide it in the US but there are contributions to the premiums, deductibles, copays and then endless additional costs (using a doctor who was not 'in network' during an emergency...). The prices are ridiculous so even a 10% copay can add up.
5. Food. Cheap food is as cheap as the UK but poorer quality. As soon as you want decent food, the prices are higher.
6. Not for us but from colleagues - student loans. It's becoming more like that in the UK sadly but student debt wasn't think for my generation and it absolutely was for the US and to a lesser extent
7. Lack of public transport outside major cities meaning you had to run a car for each household member and all the associate costs

It was really just "things" that were cheaper in the US or services that could be provided by the absolutely lowest paid workers

Brit here whose been in the US 15 years almost now. I’d add to this that you’ve got to factor in retirement costs. The US jobs are in part paid higher as there is no real government funded retirement (maybe a bit of social security, but the system is night and day vs the UK). I put in around 15% of my salary a year. People even still have to pay health insurance premiums which are huge in their retirement years, with no income coming in. I worked in nyc in my 20s and it wasn’t until I was earning over $100k that things were “ really comfortable”. And even on that, I had flatmates and had to try to save. I could never have supported a family solo on that salary. We’re out west now and just bought a house. It’s 3 beds, decent space, but we’re in a major city, so it’s not giant/the stereotyped McMansion size. But cost more than $1m and is not in a good school district, so we will be paying $4k in school fees month on top of a $6k mortgage, insurance etc. and then still have to buy food etc. you can live cheaper if you plan well and really don’t spend. The UK feels much more affordable to me, but that is based on the NHS and public pension holding it together in our lifetime and I’m not sure (but hope) that will happen…

What you're saying about the US retirement system is inaccurate. According to my recent statement, and my work history is less than 15 years, I'll get about $3k a month in SS when I retire. Currently the full state pension in the UK is less than £900 a month.

@alanabennett good to know! Family I have here don’t talk highly of SS benefits, and my retired MIL recently went back temp teaching to help her income levels. But I’m guessing the affordability varies state to state, then factor in healthcare costs and costs of living. Adulting (no matter where) is no fun 🤦‍♀️

Americans do have more disposable income. That’s just a fact. Hasn’t it always been that way?

British expats are by and large going to be in dispatched to big cities so they will be hit with these extra costs, and no family or church groups to help with childcare.

Regional cities are far cheaper on all those costs, but you wouldn’t be sent there as an expat usually (although I knew a few sent to very regional cities in the Midwest lol)

Statistically the UK is actually more expensive than the US for child care, though I can't remember if that was in absolute dollar terms or relative to wages. I was somewhat shocked by that. #1 was Switzerland. Remember, huge country, so small towns will pull down the average.

the low value of the pound makes everything in the US (and Canada) look insanely expensive. That said, groceries are more (but not as bad when compared to wages). Mobile phones and home internet are more expensive, lack of competition.

We pay $350 in health insurance contributions per month. Property tax $6k. Texas, by the way, is known for high property taxes because there's no income tax. New York and New Jersey are the most expensive. An ordinary suburban house can easily pay $20K in taxes. However their teachers make over $100k a year.

You can't make huge assumptions about student loans. There's multiple parts to the system. The basic government guaranteed undergraduate loans are capped at $30k. Many of the outrageous numbers are either from going to expensive private universities or from graduate school (many professional degrees are mostly self-funded and you can borrow the whole cost from the government. PhDs have funding.) I borrowed to get a master's degree for a career change, so I'm paying that off again, but it increased my salary and will pay off.

Any given individual, in any country, could just be bad at budgeting, at any wage.

Also, some people in the US are paid weekly, not biweekly; I am.

The UK wages are way too low in comparison. Some things may be more expensive in the US, here and there but it's a lot less expensive

This is my impression too. I found the general COL a bit too high in the UK, especially as wages are not quite matching, although I will admit the food is better value and of better quality. As much as it pains me to admit that 😆

My experience has been that there is good quality food in the USA, but the baseline standard is somewhat lower, and you have to relearn how to shop. It's not all chlorinated chicken and food additives like some would have you believe, though. What I miss are supermarket chilled ready meals, which are not really a thing.

(Example: the cheapest chicken at the supermarket is raised in crap conditions, but there's higher welfare there too. However, regular supermarket strawberries are all grown to be shipped from California or florida, so they are too firm and have no flavour. If you want a decent strawberry, you have to wait till the local ones are in and buy them from the farmers' market.)

The $11 iceberg lettuce was in Canada, IIRC. it was the double whammy of bad weather in Salinas, which grows early winter lettuce, and a supply chain problem. For a few weeks, restaurants in Canada were taking lettuce off the menu. Once the season started in Yuma and Coachella, the lettuce prices all went down again.

Incorrect. We get taxed right away. We have to pay social security, state, and federal taxes.

Annual leave is dire on average (you are right about that), most in regular jobs get two weeks and holidays. Each state has sick day policies. If you’re making 6 figures you’re getting at least 3 weeks off with some floating days unless you’re in a lower status job.

employment rights vary be state. For instance California is awesome for employees rights but Arizona and many other states are dismal.

There are federal laws that govern the land which are to be considered minimum. Each state has their own labor laws and some are actually quite good. Others are… the minimum.

You can’t paint it with one brush because that’s not reality in the US.

Really?!?

Canada though is the worst of all worlds, high cost of living, high food prices, ‘stuff’ is costly too and the salaries inexplicably low.

I'm glad this thread was posted as my DSis lives abroad (we don't get on) and has been bragging about her latest promotion which pays her $80,000pa. I earn nearly £33,500pa before tax with an additional income from benefits that amounts to about £6000pa. I am not sure what her salary is after tax and if its really as good as she makes out.
She has a much bigger house than us, with a pool, and apparently paid less than we paid for us back in the UK so I also don't understand house prices there.

Forgot to add that DSis has less qualifications and experience than me and she's doing the same job as me (albeit in the USA). We studied the same course initially but I took the qualifications further and got more, she didn't.

I d mo agree though with PP that U.K. wages are shit. DH and I work in totally different industries - 30-40% pay cut and the cost of living difference doesn’t reflect that (moved to and from comparable areas in both countries)

but talk of $18 eggs, $18 sandwiches and $11 lettuces are not true at all.

Having said that $5 is very cheap for bread and it’s fucking awful

Well it’s $11 somewhere . I’d post my screenshot but MN says my files are too big these days so I can’t (which is really annoying me) 😬

www.montereyherald.com/2022/12/16/11-for-a-head-of-lettuce-nationwide-shortage-causes-outrageous-prices-2/

Everything depends on location. Just like the UK. Impossible to judge house prices as a whole.

i will say that the recent jump in house prices and mortgage rates means that we would need a bigger income to afford a house now. I thought prices were bad enough when we bought. (We have a standard American 30 year fixed mortgage, so our costs are locked in.)

That’s not true, taxes are withheld from your pay AND you have to do a tax return to see if you owe more taxes or get a bit refunded back.

You will have these taxes withheld from your pay:

• Federal Income Tax
• State Income Tax (only a few states don’t have this)
• City/Local Income Tax (major cities)
• Social Security Tax
• Medicare Tax

Yes, not only is it only the interest that is deductible, but you also have to have enough other tax deductions on top to exceed the standard deduction, otherwise you are not saving any money on your taxes at all.

I wonder that too. DH is American and the US requires he files a joint married tax return every year even though he hasn’t lived in the US for fifteen years! I think they are only country that tax by citizenship as well as residency.

And so we pay tax to U.K. and then more tax to the US every year…..
Hes doing his spreadsheets with his U.K. earnings and such now.

I wonder that too. DH is American and the US requires he files a joint married tax return every year even though he hasn’t lived in the US for fifteen years! I think they are only country that tax by citizenship as well as residency

He isn’t required to file jointly, but he must have done the calculation that it’s advantageous for him to do so.

I file separately to avoid taxes on my DH assets, everything must be keep strictly separate, it is such a PITA