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)

Yes, exactly. It is strange that there is now a need to explain this away and try to make things “even” when it has always been the case. The US is larger and more prosperous, just as it has been for over a century. Of course their salaries are higher.

When I moved to the US one of the things that struck me is that when Americans want to be patriotic they think of positive things to say about the US, like their research or the national parks or the eye-watering amount of money they send to support developing nations. When Brits want to be patriotic we tend to just slag off the US. Funny how that works.

Off-topic: I've never understood how "bi-weekly" means every two weeks, but "bi-monthly" doesn't mean every two months, but twice a month. Grrrr.

On topic: people have raised entire families for generations off the income generated by working through the confusion of personal taxes, healthcare, pensions provisions etc in the US. The misinformation in this country is partly down to organic growth of various systems, and there's no impetus to clear up confusion because working through the confusion/working the confusion to your advantage is an entire industry. No wonder foreigners find it difficult to comprehend!

Most US employes are taxed at source -

www.irs.gov/payments/tax-withholding#:~:text=For%20employees%2C%20withholding%20is%20the,employer%20on%20Form%20W%E2%80%934.

I get ten paid holidays and five weeks of annual leave. Perhaps that's "very little" by UK standards.

The amount of leave you get is tied to your job level and is negotiable.

Rent varies enormously even within the same zip code.

You can eat very well in the US without breaking the bank. Cooking ability makes a difference.

If you don't want to live in a place where there is reliable public transport, then you have to take practicalities into account. Yes, this means running cars in far flung suburbs, which is what people living in rural areas of the UK have to do too.

It doesn't take a lot of effort to locate a doctor who takes your insurance, and to have this sort of info to hand in case of emergency.

Low paid workers provide essential services in the UK. Hence the current strikes.

And seniority 🙂

that brings up an interesting question, That I really have not been able to figure out so would love to take the opportunity to ask. Who pays for all the sick leave in the UK… so I read on here about people being off sick for months. Is that paid leave or unpaid? What about maternity, I get that there are different kinds, who pays for what and how?

In the US typically you get PTO which is combined sick time and vacation buckets or separate sick time and vacation time (with different rules) then extended sick leave partially covered by short and long term disability insurance paid for by the employer.

My real question is…are UK employers paying more for all of these different leaves?

I wonder about negotiating leave and salary in the UK. Is it a thing there? When I hear people from the UK saying that people in the US get very little pto etc, are they unaware that these things are negotiable?

It's a complex picture. We have basic minimum standards of paid leave in the UK - and unlike the US these are national (the equivalent of Federal) so there aren't State variations.
Sick pay has to be paid by employers (trivia - it used to be funded from NI) subject to some qualifications rules BUT it's a very low value (below min wage). It runs out after 28 weeks and then the employer doesn't have to pay any more (it's a bit more complicated but that's the basic).
Many employers add their own schemes on top but very few are insurance backed or outsourced as they commonly are in the USA.

Maternity Leave also has a basic minimum that some employers (but by now means all) add to. It's a stupidly complex formula based on earnings during a set period, and pays 90% of earnings for 6 weeks, then an amount below min wage for 33 more weeks. You are allowed to take a year off on Mat leave, but anything over the 39 weeks is unpaid.

This is a very basic summary only.

Combing sick and vacation into a single PTO isn't done in the UK and would likely be illegal - it's going to be less common in the US as more States mandate paid sick leave.

Sorry I was misremembering where I read about the $18 eggs, it was this Guardian article:

amp.theguardian.com/us-news/2023/jan/25/18-a-dozen-how-did-americas-eggs-get-absurdly-expensive

The homesteaders must have been complaining another food was really expensive!

Unemployment programs are funded and managed by the states, with the funding coming mostly from employers. In NY, benefits are limited to 26 weeks. During the pandemic, the Federal government provided funding to extend benefits for longer periods. The same has happened previously during periods of high unemployment. So it's not as simple as a standard 18-month benefit period.

A "gourmet food store " is more expensive than a supermarket. Who would have guessed?
Eggs have gone up though. About $5.50 a dozen around here, which I consider high.

So far we’ve mythbusted

• the $30K baby price tag
• the $18 eggs
• the no taxes being deducted
• the no housing assistance
• the no unemployment assistance
• the pay period variation
• the no paid vacation

What else was there?

In fairness it does actually cost minimum $30K to have a baby but insurance usually covers that. Everyone I know who has had a straight forward hospital birth + epidural has had to pay out about $2-4K

That people don't care about one another. Today my 90+ year old neighbor brought over eggs to share with me, since the prices in the local store are high. She found some for $6.50 for 2 dozen so we split them. Wouldn't hear of me coming over to pick them up myself. A few days ago I took lasagna and oranges to another neighbor and left with a package of blueberries.

When we moved in, someone threw actually threw us a "get to know the neighbors" party and people brought all kinds of cards and presents to my house for weeks. Bread & Honey, Fresh Flowers, Vegetable, etc. This is the norm for us.

I saw that and it was ridiculous! They picked a gourmet market in the most expensive part of Manhattan. Basically the most expensive eggs possible!

You do generally pay some of the cost for birth as with everything (though 40% of US births are on Medicare). It all depends on your health insurance. It is wrong that your employer has such a big role in deciding whether you get good insurance or not, but $30K is not what people pay, and for child birth specifically a lot of the gaps have been closed.

People do sometimes make short sighted budgeting decisions with health insurance, though. Especially younger, healthier people: they decide to have a lower premium now but don't budget to pay the deductible because they think they won't need it. Many employers, especially larger ones, offer a choice of plans. After the ACA passed there were some people screaming about how they didn't want to buy insurance at all. I doubt they would have wanted to be left bleeding to death in an emergency, though.

I think it would be sensible to time-limit claims for unemployment in the UK too. Six months? Eight? Except for real disability issues. Can you drive? Do deliveries. Otherwise, learn a new skill, and no I don't mean macrame!

Rents everyhwere vary enormously. My experience living in both suburban east coast adn NYC is that like for like it's more expensive in the US. You also don't need to be far flung to require a car, you just need to be out of the city centre. When we lived in the suburbs we lived in a town which was in between two major cities, an hour to each .Apart from a train to these cities you needed a car (including to drive to the train station). The UK has much better public transport provision, no one could possibly argue with that - even just for the fact that the urban geography is vastly different. In fact there are few cities in the US with the exception perhaps of the main east coast ones where you can manage without a car. Good luck in Houston or Los Angeles. They are built for cars par excellence.

Interesting about the in an out of network doctors Glad you've told me how easy it should have been @mathanxiety . When I was in the ER ,writhing in pain with suspected appendicitis (aka emergency), I needed to check with which insurance the doctor was in network and then insisted they find me a new doctor when she was out of network. Shame I didn't realise then how easy it was meant to have been. Guess that's why the insurance denied my claim and i was on the hook for thousands of dollars.

If I had to be a low paid worker, I would a million times choose the UK over the US. The fact that workers don't strike in the US is more telling about how they've managed to destroy the unions and organized labour for these workers than anything to do with a higher standard of living.

I am talking from my own experience of having lived the better part of a decade in the US as well as in the UK. The US is a big place and others may have had different experiences.

Medicare is for the elderly so unlikely that there are births being covered by it!
www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices/whats-medicare

Yes, I meant Medicaid! I do know the difference and don't know why I typed that.

There's now a bill to prevent surprise out of network billing for emergency services. The doctor and insurance have to go sort it out and you're not liable. It doesn't take away half the hassle of dealing with insurance, but it does protect you in that particular case, as it should since you don't get much choice!

Guess that's why the insurance denied my claim and i was on the hook for thousands of dollars.

That must have been prior to the No Surprises Act, which made that sort of situation illegal.

And I'm pretty sure the PP means Medicaid, not Medicare. In 2020 Medicaid covered 42% of US births.

Medicare doesn't cover maternity. Very few over 65s give birth.

I spent some time in the emergency room with a family member this weekend. The No Surprises notices are very prominently posted.

@gwenneh It was a few years ago. Good they fixed it (finally) because it really was ridiculous to be in hospital and the onus was on you to check a doctor's network status even when ill and hospitalized.