US v. European salaries

August 9, 2005 8:14 AM

Cost of living comparison. Is there any way to compare salaries and standard of living between USA, UK, and France? If I relocate between these, how much should I ask for to attempt to maintain a standard of living?

If someone offers me (just for example) USD 50k to work in the US, how much could I ask for an equivalent post in Europe? Having lived in both US and UK, I'd be tempted to go for GBP 50k in the UK, as everything seems to be the same in price terms there, just in pounds rather than dollars. Whether I'm likely to get GBP 50k is another question, though. Also, what about France? Would EUR 50k be roughly equivalent, given the higher cost of living in France, but also the ~1.2:1 exchange rate? Or should I be asking for more Euros?

I'm going to ignore tax, benefits, etc., as I think these will tend to wash out, and also location (as the type of jobs I'm looking at are often in the same type of towns/cities).

posted by carter to work & money (17 comments total)

I'll watch the replies on this with interest as only this morning I had to submit an expected salary in Canadian $. I had no idea. I am uk at the moment hoping to relocate soon. My reckoning so far is that my equivalent salary in CD$ will be pie in the sky, but I really don't know. I am guessing that cost of living in US and CDN is roughly equivalent?
posted by Frasermoo at 8:19 AM on August 9, 2005

Frasermoo: I have found that the price for most things in the UK are the same as in Canada WITHOUT factoring in the exchange rate. That is, if a can of pop cost 1 pound in the UK it will also cost 1 dollar in Canada. In reality that can of pop is going to cost me $2.25 - $2.50 if I were to buy it in the UK. I can't give you any information on cost of living (UK vs Canada) but thought that tidbit might help you.

Carter: I remember a website a few years back that let you choose your origin city and your destination city, plug in your current salary and then get your "required salary to maintain your current lifestyle". I'm totally blanking out right now, can't even remember what the name might have been.
posted by smcniven at 8:42 AM on August 9, 2005

carter - apologies if it appears i'm threadjacking, just genuinely interested.
posted by Frasermoo at 8:53 AM on August 9, 2005

No problem. And I'd second smcniven's comment in the case of US-UK prices. That is, a book that costs USD 15 also costs GBP 15, despite the exchange rate. A CD that costs USD 12 also costs GBP 12. I think 1 CAD *nominally* equals 1 USD, despite the 1.2:1 exchange rate, which is why it is cheaper (but difficult) for USAians to buy Canadian stuff. I was wondering if I could apply the same rule-of-thumb to USD-EUR conversions.
posted by carter at 9:11 AM on August 9, 2005

I doubt it. Stuff in Europe is generally more expensive than in the UK, or at least a similar price.

A CD I can buy in the UK for £6.99 will generally be at least 10-15 Euro. In fact, CDs are one item which is generally way more expensive on the continent. Each territory has certain goods which are a lot cheaper or more expensive than other territories. The UK has very cheap groceries, for example (a few weeks ago I bought three full bags of groceries for £5). France has very cheap booze and bread. Electronics in France seem extremely expensive, compared to the UK.

Don't forget that the tax burden in most European countries is also a lot higher than in the UK.. and, well, you can't make 1 GBP seem like 1 EUR at all, so 1 USD to 1 EUR is similarly unlikely to me.
posted by wackybrit at 9:16 AM on August 9, 2005

A friend's son has recently moved to Toronto from London. He's earning 25% less than he was in the UK, but is living like a king, way above the standard of living he could afford in England.

I visit the US frequently and find that the $1 = £1 ratio is about right. But a lot depends on where you want to live as to how far your money will go. If you decide on London, you'll find the cost of housing and transport is astronomical, disproportionately so when compared with the US.
posted by essexjan at 9:22 AM on August 9, 2005

Disproportionately so compared to American cities?
posted by dame at 10:50 AM on August 9, 2005

Okay, so maybe I am all about quick and dirty, but when I am travelling to a foreign land, the first place I check is the Hamburger Index.
posted by dabradfo at 11:14 AM on August 9, 2005

I don't have any first hand knowledge about the cost of living in the UK and other EU countries but I would imagine it would also depend upon which city you moved to. The cost of living difference between New York and London and New York and Cardiff are probably not going to be nearly the same.
posted by Carbolic at 11:19 AM on August 9, 2005

I think this is the site that smcniven was trying to remember:

International Salary Calculator

Google search terms: cost of living international
posted by GeneticFreek at 11:32 AM on August 9, 2005

Wackybrit has been...wacky. Mostly everything was more expensive in the UK (in converted value) than Germany. roughly 33% more. That's why the Brits love to go to Calais (across the Straits of Dover) for shopping. My partner's salary converted as if using the basic formula mentioned above: x Euros = x GBP. There was a very complex calculation involved, using cost-of-living figures (with housing separate from other expenses). Electronics were much cheaper in Germany than the UK.

I can't remember at all how the differences were when I moved from DC to Germany. That was 7 years ago, and comparing costs couldn't have been further from my mind, as I coped with living in my first foreign country.
posted by Goofyy at 11:43 AM on August 9, 2005

I disagree completely on this strange equivalency that people keep making-- I just moved back to the US after being away for 5 years and have never, even when the exchange rate was terrible, found a $1=£1 formula helpful.

I'd say that if you were to make $50K work in the UK, you'd need to think in terms of rent (or a mortgage), transport, food, and utility expenses first. You can compare these pretty easily online. Start by finding a place to live that suits you and then go from there. As Carbolic notes, expenses vary WILDLY across the UK; you're going to struggle to live on your own and make ends meet in a city like London where everything is expensive, but will have a much easier time in a place like Leicester, where rents are much cheaper. That alone is probably the biggest factor to consider.

Salary offers tend to be substantially lower in the UK and the EU than they are in the US. This is a shock to most Americans when they come to the UK to work. One good example of this is that corporate recruiters coming to woo doctoral candidates tend to bandy about numbers in the £32,000 range as the impressive salaries you're likely to earn with them-- and people are wowed by this number. Many professionals live on less than £20K a year, and workers without degrees often make less than this. So factor this into your calculations. You will likely have less disposable income than you are used to having, as housing and transportation are probably going to cost you more. Maybe even a lot more.

You're probably going to set yourself up for disappointment if you demand a pound equvalent to what you'd be offered in the US, especially if that number is higher than about £40K. You'll be damned lucky if someone really does pay you £50K. But I would not count on getting that amount.
posted by yellowcandy at 11:53 AM on August 9, 2005

GeneticFreak - That's so obvious when you think about it!
posted by carter at 12:02 PM on August 9, 2005

What Goofyy and yellowcandy said.
Some more anecdotal 'evidence': In my experience, (living in) the UK is more expensive than the EU.
Wackybrit: if you convert £7 to euros, you'd get over €10, so I guess a cd would be priced accordingly...
posted by Narnia at 12:19 PM on August 9, 2005

As usual, thanks everyone; I can see that this is going to take some figuring out ...
posted by carter at 7:20 PM on August 9, 2005

I've lived in Canada (Toronto), Britain (Cambridge) and the US (New Haven, CT) within the last four years. I'm also moving to the UK with Canadian funding for a year.

Prices are complicated. Comparing cheap two bedrooms - Cambridge 700-900 GPB (these are mostly terrace houses), New Haven $800-1200 USD, Toronto $800-1200 CND.

But a loaf of cheap bread in Cambridge, even in the downtown Sainsbury's (which isn't cheap) is only 40p, whereas it's $1.19 USD in New Haven, and $0.99 CND in Canada. And the UK price includes tax - neither North American one does. I found basic groceries not much more expensive - I was so impressed by what 10 GBP bought - it was like $20 CND. Then I realised, it was $20 CND. Eating out in the UK, however, is twice as expensive as Canada.

Basically, rent in North America will be much less than the UK, but food prices will be only a little less. Books and CDs cost much more in the UK, but phone and internet only somewhat more (though you don't have to pay for local calls per minute). Phone in Toronto is $30 CND, and high speed internet is about $50 CND.

The best thing to do, either way, is to use the international salary calculator - though I just tried, and it doesn't have Cambridge, nor any similar SE city. And it isn't really clear on which currency is which. So, if I would have $20,000 in Toronto, it says I would need 24,810 in Manchester - but is that pounds or CND? Because $20,000 is a good graduate student income in Toronto, but for clerical work would be extremely low (decidedly pink collar). I think it's telling me that I would need $24,000 CND in Manchester, because 24,00 GBP would be really really cushy for a student.
posted by jb at 11:35 PM on August 10, 2005

That's 24,000 GBP, sorry.
posted by jb at 11:36 PM on August 10, 2005