Why are the salaries in London so low?
The title says it all, anyone know why London's salaries are so low? And don’t tell me it’s because of Brexit because this isn’t new.
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The pound was worth 1.51 at all time high to 1:00 dollar. Now, it is worth 1.21:1:00. There is no way it will be like that again. I had a friend say that it's so cheap to go America due to the the dollar. The U.K basically screwed themselves over. We are still laughing, haha.
the pound was worth >2 on the dollar at its peak...
I disagree. The Brits are getting a strong POUND in the ass from Brexit.
Germany is probably best for pay in Europe. Same salaries as London but much lower COL.
Germany sucks though
Salaries in the USA are higher than anywhere in Europe, and also for pretty much every type of job. As has been rightfully pointed out before, this is largely due to the benefits we Europeans get. Here our (college) debts are lower, healthcare is cheaper, cost of living is lower, pension systems are better, etc. You don't need to save up a few 100k for unanticipated medical care. That's just crazy imo. In that respect, I like Europe much more than the USA.
On the other hand, if you make it in the USA you make it big, like pretty big. That's just capitalism at its finest. But if you don't make it at all, then you're screwed. Salaries here are a lot more leveled. If you end up working in banking, you're probably better off in the USA. But overall, quality of life is a lot better in Europe.
Simple answer, salaries in London have always been a bit lower. It is stark right now cause the exchange rate has gone from 2 to 1.5 (after 2008) to 1.3 (brexit vote). A Y1 IB Analyst is earning roughly £80k which is currently $104k but before brexit was $120K.
That latter figure is actually quite good when you realize that London analysts get 6 weeks off, slightly better hours, don't have insane college debt, and are in a continent that has less M&A activity.
Costs in London are just way lower, so whilst it seems FAR lower due to the exchange rate movements of the last two years (last time salaries were benchmarked cable was at 1.6, so around 2014, and it was a 1 to 1 match), it' actually not so severe.
Reasons: 1. Better QOL - you get more days off, and all the benefits of having some social safety nets for the people around you 2. Its cleaner. As above. 3. Money goes further. A new-ish non-luxury 3 bed in Brooklyn is $8-9k a month. A new, luxury 3 bed with similar travel time in London is $4-5k/mo including gym, pool, and amenities. 4. We have more competition within Europe, and it's actually a bit more meritocratic vs the US/NY where it's all elite schools and closed networks 5. Money goes further. Food costs are about half to two thirds. Same for drink. 6. Profitability is lower in London - that's a structural thing. Another point is less deal flow and smaller deals.
Here's some quality of life things you undervalue until you consider losing them: 1. London is way quieter, in a nice way. We don't have those shitty wailing sirens. 2. We're connected. We can get anywhere in Europe within 3 hours for under $100 return if booked a few months in advance. You can immerse yourself in a different culture at the drop of a hat. 3. NYC public transit systems, including airports, are ANCIENT to use (and the MTA stinks). Yes the London tube is old, but it's far quicker and more efficient. 4. Food - it's very diverse in London. 5. It's a bit more casual, yet more cultured.
Some of these points are simply not true and you are combining Europe and London which are quite different in terms of the job market.
Europe is NOT meritocratic at all. If you want a TOP job, just ask someone's rich daddy and you will get in. I can tell you the guys getting analyst positions at Mckinsey in Europe are all connected to a C-suite level executive either through their own parents or their friends' parents. These guys did not have to interview. They got the job immediately. London is more meritocratic in that regard because nepotism doesn't get you that far besides an interview with HR. London is extremely expensive for food and drinks. Pretty comparable to NYC. Groceries are the same as in the states. You can go Tesco's for cheaper stuff or Waitrose for high end. The tube doesn't have A/C and it's shaped like a sausage so you can't even stand up straight at certain ends. Every time you go down to the tube it feels like you are in a fallout shelter. It's so loud and dirty as well. NYC tops London food in every way.
Did you just try to put London's food scene over NYC? There's no way this is true
I've only been to NYC a few times, but, that disclaimer aside, London's food scene owns NYC hands down. So does Asia and most of Europe.
While I didn't go to the likes of per se when I was there (hugely overrated from what i've heard anyway), I did go to whatever places the rest of my cohort went to. All really not great and over priced. I don't even bother remembering their names.
Surprisingly, it was the mid tier to upper mid tier restuarants ($40 to $150 in my book anyway), that were pretty decent. But still not worth the money.
Literally everything else, cheap or expensive, that been hyped about in NYC was over hyped.
Except Levain Bakery's cookies
Agree with what others have said. FX rate does not help but in general salaries for all jobs are much lower in the UK.
It used to piss me off but here at the facts:
I get 5 weeks paid vacation every year
If I get sick I can go to the doctor free of charge. I also have private health insurance through my work should something serious happen. I literally never have to worry about health care costs. I do a contact sport where I get a lot of minor scrapes. There is an A&E clinic across from my office. I go in and I am generally seen and treated in anywhere from 30 minutes to 3 hours. No excess...no out of pocket expense, even prescriptions are paid for (ok you need to pay £12 quid admin fee or something).
If I am sick, I take a sick day. With pay.
Culture significantly more chilled. If I've got an appointment I can take, if i have to leave early no problem, if I have to work from home OK. Obviously varies by employer but in general the work culture is so much better here.
My college fees were paid by the Government so I have zero student debt.
My employer pays a contribution of 10% of my salary into my pension plan. This is often not mentioned in salary figures.
When you take all that into account, I'd take the lower salary. I do not know how you guys can live with 2 weeks vacation. That would kill my soul.