The thing is, PPP is only for things you have to actually buy. Where I live, salaries and PPP is lower than in the US where I lived before. But it's not that simple. Does PPP take into account that I got my 5 year education for free? Actually I received roughly $400/month to go to university. Which also means I don't need a college fund for my kids. Does it reflect that health care is free and I don't have to even think about it anymore? Does it reflect that I now have an actual pension, with 25% on top of my regular pay is paid into my future pension? Does it reflect that I now have 6 weeks vacation instead of 3? Does it reflect that if I have a child, I (as a father) can stay home with the baby for a year if I'd like? Does it reflect that daycare is heavily subsidised to the point I don't have to care about that either? Does it reflect that I don't have "at will" employment anymore, and can't just be let go in a day? Etc etc etc.
My point is, it's very difficult to compare the economic realities in different countries. There are whole categories of expenses that just do not exist in many western European countries. That said, I'm sure if you add everything up, Silicon Valley is the place to be for single, healthy, smart engineers. But that's a pretty narrow set of the population.
You'll actually find it's pretty complicated to measure earnings in Europe. In London you could happily be earning $200,000 - $300,000 with IT skills, avoid tax, keep 90% of that, and have the state benefits.
Simply stated, because of the high levels of tax and rife avoidance, it's probably quite difficult to quantify earnings in London, for example.
> In London you could happily be earning $200,000 - $300,000 with IT skills, avoid tax, keep 90% of that, and have the state benefits.
How? Which particular state benefits are you talking about?
(And it seems like you're talking about evasion - which is illegal, rather than avoidance which is a mix of normal tax planning (a contractor registering for VAT and claiming some of that back) and loophole-manipulation).
Contract for GOV.UK or finance, high end will see you those rates with 2 weeks holiday + the 8 bank holidays. Look for the word devops for example.
Health care is the obvious one. University has kinda jumped the shark though.
Trust schemes or defer forever, depending on your attitude to risk. I'm not saying said schemes should be used, just that it's popular and skews what people really earn.
You can opt out of the work hours regulations, but even if you don't as a contractor you will be running your own Ltd, so unless you're liable to sue yourself, you'll be fine with 2 weeks holiday which is comparable to the US. Of course you can take more, but as a contractor you get paid per day, so it'll affect your earnings.
Avoiding tax once you're not PAYE is pretty easy, there are loads of loopholes but the government sanctioned method is to take £40k per year at under 20% and leave the rest in the company. If you have a non-working spouce, this becomes £80000. You can also contrib, I believe, £40k to a pension, double again for your spouce and set yourself up for a super early retirement.
If you're open to more risk, there are loan based trust systems that'll get you access to your money a lot quicker. They're currently totally legal but the government does make a lot of noise about shutting them down.
Point being, earnings aren't reflective of wealth in the UK and you can do well here too as sadly, the well off have a lot more opportunities to legally avoid tax.
I completely agree. Any time you try to turn complex social systems into a simple number, things are necessarily lost in translation. The numbers represent simply what they represent, and nothing more.
My point is, it's very difficult to compare the economic realities in different countries. There are whole categories of expenses that just do not exist in many western European countries. That said, I'm sure if you add everything up, Silicon Valley is the place to be for single, healthy, smart engineers. But that's a pretty narrow set of the population.