scorecardBritish tech workers get paid a lot less than Americans for doing the exact same job
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British tech workers get paid a lot less than Americans for doing the exact same job

British tech workers get paid a lot less than Americans for doing the exact same job
Tech4 min read

David Cameron using a computer

Getty Images Europe

Sorry Dave - you haven't caught up with the Yanks just yet.

London may be the "capital of European tech," but it still lags a long way behind the US.

Case in point: When it comes to salaries, British tech workers earn significantly less than their American counterparts, with some US developers earning more than 50% more than Brits in equivalent positions.

Data provided to Business Insider by Hired, a tech industry job site, shows that a software engineer in the UK earns on average 30% less than they would in an identical role in the US.

For example, a British software engineer with up to three years experience will make an average of $77,508 (£50,540) working in London. In Chicago they would make $85,631 (£55,854), and in Washington, D.C. that jumps up to $94,916 (£61,891). New York is more lucrative again, with an average salary of $103,324 (£67,373). But the most highly paid area, predictably, is the San Francisco Bay Area: Salaries average around $113,479 (£73,995) - 46% higher than in the UK.

This difference lessens slightly as software engineers become more senior, but it is still pronounced: With between six and 10 years experience, a London worker should expect to make $99,674 (£65,014), while in San Francisco they would rake in $131,779 (£85,928) - 32% more.

Similar differences are found in other tech professions too. London senior data scientists make $89,231 (£58,176), while US ones make $128,333 (£83,670), 44% more. And with mid-level UX/UI designer salaries, the difference is $81,572 (£53,184) to $108,287 (£70,632) - US workers making 32.7% more. Hired drew its data from job listings placed on its site in various US cities, as well as London, where it launched earlier in March 2015.

So what's going on? It's (fairly obviously) not the case that US tech workers are just better at their jobs. Instead, as Hired's UK market manager Sophie Adelman points out, "it is driven by the supply/demand dynamic." The UK just doesn't have the same kind of mature tech scene that the US does, and accordingly, demand isn't so high for tech workers. There's also a relatively low level of venture capital investment in Europe compared to the US, which will contribute to lower salaries: In 2014, European VC firms raised $4 billion - one tenth of what US firms managed, according to The New York Times.

(Of course, in places like San Francisco, there can be a higher cost of living too, forcing all companies to pay more. But this is the case because tech workers are more in demand, letting them command higher salaries, and thus driving up the cost of living in the area.)

Vehicles negotiate the Old Street roundabout in Shoreditch, which has been dubbed 'Silicon Roundabout' due to the number of technology companies operating from the area on March 15, 2011 in London, England. The relatively low rental rates and proximity to media and internet companies has made the area close to the roundabout a prime location for IT firms and web entrepreneurs. (Photo by )

Oli Scarff/Getty Images

"Silicon Roundabout," a hub for the London tech scene.

Yes, London is widely regarded as Europe's tech hub, with three times more startups making their home in the capital than in any other European city, according to research from EY. Yes, London is improving fast, with $1.47 billion in VC funding raised in the first half of 2015 - a milestone it took 9 months to reach a year prior. And yes, UK tech companies are forecasting 11% growth this year, four times faster than the UK's GDP forecast. But for all its successes, London fails to boast of a single true tech giant, like Apple, or Facebook, or Google.

Here's another example of how far behind the UK/European tech scene is behind the States: Startup exits. Research from Tech.eu published in April found that of the 332 European tech companies acquired in 2014, 122 of them were acquired by US companies alone.

UK companies, in contrast, were only responsible for 33 startup exits during the same year. Even the most prolific European country, Germany, only acquired 40 companies - less than one-third of America.

So long as this disparity exists, we shouldn't expect to see equal wages on both sides of the Atlantic any time soon.

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