“Location-Based Pay” – Who are we to complain?(blackshaw.substack.com)
blackshaw.substack.com
“Location-Based Pay” – Who are we to complain?
https://blackshaw.substack.com/p/pay
752 comments
Precisely. The OP reaches the wrong conclusion from an excellent point.
The fact that they are benefiting as a consumer because of location based salaries is another point against them. Pitting “closing down the ‘sweatshops’” (i.e. unemployment) as the only alternative for the workers is disingenuous. Another alternative is worker control over the factories. Yes OP as a consumer will loose some luxury as the price of consumer products rises along with the workers’ pay, but what natural law states that the OP has the right to that luxury at the cost of foreign workers?
The original point, you deserve the value of your work in salaries regardless of your location still holds. Even more so when it is applied to the global scale. And the fact that it isn’t applied on the global scale is just another fact pointing to the fact that we live in an unequal economy that exploits workers. Instead of rejecting this, OP should have reached the conclusion that there are alternative worker arrangements which would benefits workers globally.
The fact that they are benefiting as a consumer because of location based salaries is another point against them. Pitting “closing down the ‘sweatshops’” (i.e. unemployment) as the only alternative for the workers is disingenuous. Another alternative is worker control over the factories. Yes OP as a consumer will loose some luxury as the price of consumer products rises along with the workers’ pay, but what natural law states that the OP has the right to that luxury at the cost of foreign workers?
The original point, you deserve the value of your work in salaries regardless of your location still holds. Even more so when it is applied to the global scale. And the fact that it isn’t applied on the global scale is just another fact pointing to the fact that we live in an unequal economy that exploits workers. Instead of rejecting this, OP should have reached the conclusion that there are alternative worker arrangements which would benefits workers globally.
The author doesn't actually say it out loud, but
> OP should have reached the conclusion that there are alternative worker arrangements which would benefits workers globally.
This is specifically what he DOESN'T want. What he's saying is that someone from Boise, ID shouldn't complain too loud about location-based pay, because taking the logic to its extreme would mean redistributing all this worker and consumer welfare with the rest of the billions of workers worldwide and, surprise surprise, that would actually suck to essentially every American, doesn't matter how poor.
So, basically: "Hey guys, don't rock the boat. We might be crew but you don't want the rowers competing for our place"
> OP should have reached the conclusion that there are alternative worker arrangements which would benefits workers globally.
This is specifically what he DOESN'T want. What he's saying is that someone from Boise, ID shouldn't complain too loud about location-based pay, because taking the logic to its extreme would mean redistributing all this worker and consumer welfare with the rest of the billions of workers worldwide and, surprise surprise, that would actually suck to essentially every American, doesn't matter how poor.
So, basically: "Hey guys, don't rock the boat. We might be crew but you don't want the rowers competing for our place"
Thanks for calling it out. This is what I read as well but I wanted to give the author the benefits of the doubt (don’t attribute malice... and so on). However it is hard to read anything else from this short, concise, and well worded article.
In my circles we have a saying that there is no such thing as an ethical consumption under capitalism. What the OP is basically saying is: “That is fine, unethical consumption is good actually. As long as I’m the one benefiting on other’s expense”.
In my circles we have a saying that there is no such thing as an ethical consumption under capitalism. What the OP is basically saying is: “That is fine, unethical consumption is good actually. As long as I’m the one benefiting on other’s expense”.
Wut, how do you read that? I just read: “Can’t you all see what kind of hypocrites we are, arguing against location based pay?!”
If that were the case, the conclusion would have been the opposite, and the title would have been something like: “Location-Based Pay is more common then you think, and Bad Actually”, and statements like “maybe we should be careful what we wish for” would rather be something like:
> As workers united in the goal for international solidarity we should reject the notion of Location-Based Pay, not only because it devalues our own work, but primarily because this practice is causing mass poverty and underpay among our fellow workers in the poorer regions in the world.
> As workers united in the goal for international solidarity we should reject the notion of Location-Based Pay, not only because it devalues our own work, but primarily because this practice is causing mass poverty and underpay among our fellow workers in the poorer regions in the world.
Author of the original piece here. Wow, I made the front page of HN!
Hmmmm... I can see how my vague words could have been read to imply that I advocate the opposite of what you suggest, or that I'm promoting a continuation of the status quo for my own selfish benefit. But that's not what I meant! I was merely trying to draw attention to the hypocrisy of wealthy Western software engineers complaining about "location-based pay" when few of us were complaining when the shoe was on the other foot.
I didn't offer much in the way of prescriptive conclusions because I don't know what the solution is; these issues are difficult and I'm just some random Elixir developer. But your suggested conclusion...
> As workers united in the goal for international solidarity we should reject the notion of Location-Based Pay, not only because it devalues our own work, but primarily because this practice is causing mass poverty and underpay among our fellow workers in the poorer regions in the world.
... sounds about right, and after reading all this commentary I wish I'd made a bolder statement than the handwavey words I went with. I think I'll write a follow-up piece next week.
Thanks for all this smart feedback.
Hmmmm... I can see how my vague words could have been read to imply that I advocate the opposite of what you suggest, or that I'm promoting a continuation of the status quo for my own selfish benefit. But that's not what I meant! I was merely trying to draw attention to the hypocrisy of wealthy Western software engineers complaining about "location-based pay" when few of us were complaining when the shoe was on the other foot.
I didn't offer much in the way of prescriptive conclusions because I don't know what the solution is; these issues are difficult and I'm just some random Elixir developer. But your suggested conclusion...
> As workers united in the goal for international solidarity we should reject the notion of Location-Based Pay, not only because it devalues our own work, but primarily because this practice is causing mass poverty and underpay among our fellow workers in the poorer regions in the world.
... sounds about right, and after reading all this commentary I wish I'd made a bolder statement than the handwavey words I went with. I think I'll write a follow-up piece next week.
Thanks for all this smart feedback.
Update: I have written a follow-up post in response to the above thread
https://blackshaw.substack.com/p/pay-2
https://blackshaw.substack.com/p/pay-2
Realistically, if you improve working conditions or pay in Bangladesh, the business will shift to one of 10 other poor countries in the developing world. That's not to say we should give up trying to do that. But the comparison of the low-skilled labour with scarce developers, is simply not a very good one, because most developers have reasonable bargaining power.
The answer is to impose environmental and labor based tariffs on countries that enable destructive capitalism, so the cost savings from disregarding the environment and human suffering is offset. Free trade should only be a thing between ethical, responsible states.
That well intended argument has frequently been used as a protectionist argument to keep out cheaper goods from developing nations. E.g. the EU doesn't allow certain produce from Africa because of these reasons.
Most African countries simply won't be able to comply, and the sad thing is that trading produce with the west is one of the only ways for them to escape poverty. So the people you aim to protect are left worse off.
Most African countries simply won't be able to comply, and the sad thing is that trading produce with the west is one of the only ways for them to escape poverty. So the people you aim to protect are left worse off.
History says that aid to corrupt governments to help the suffering there mostly ends up in the pockets of the people in power, so I'm frankly okay with that. When they get their act together, they can be welcomed into the fold.
Trade is generally accepted as one of the best ways to relieve poverty, precisely because money ends up close to the workers instead of with corrupt governments.
The same argument was applied to China in 2000 that trade would transition them to democracy. Instead, we got both poverty eradication AND the entrenchment of their corrupt government in an even stronger position thanks to a stronger economy. I would be very reluctant to support trade with a despot regime.
I think a billion people out of poverty is a net win. Even if their government hasn't become as democratic as we hoped, the chances of it eventually becoming more democratic aren't much less than 20 years ago. If you only want to do business with democratic regimes you will likely hurt the poor people at the bottom more than the despots in power.
Generally accepted does not equate to the one true way, and in fact, when people generally accept something to be the only truth they usually turn out to be wrong. Economic theory being as contested as it is, and how demonstrably inefficient current economic theories have been at lifting people out of poverty, I would not be surprised if history will regard the statement of “trade is one of the best ways to relieve poverty” to be a failure.
And even if the statement is true, this statement might not hold with international trade as it does with local trade. Perhaps if local populations were allowed to trade freely among them self would be a superior option, then if the rich west were constantly under bidding and under paying.
To take an example. Angola trades a lot with rich countries (particularly with China), yet Angola has one of the worst dictatorships in Southern Africa, and has one of the poorest working class. International trade does not seem to be helping in that case.
And even if the statement is true, this statement might not hold with international trade as it does with local trade. Perhaps if local populations were allowed to trade freely among them self would be a superior option, then if the rich west were constantly under bidding and under paying.
To take an example. Angola trades a lot with rich countries (particularly with China), yet Angola has one of the worst dictatorships in Southern Africa, and has one of the poorest working class. International trade does not seem to be helping in that case.
The tiny European country where I come from, the occupation classes with the seemingly most bargaining power are nurses, teachers, air stewards, as they seem to be striking every other year. At the same time they are still payed lower then other similar jobs with similar education requirements. I tend to think that their lower salaries can easier be attributed to the fact that these jobs are majority women. And there is still a significant gender gap in this country.
I’m sorry to say, but I’m little skeptical on how much bargaining power explains different pay gaps.
I’m sorry to say, but I’m little skeptical on how much bargaining power explains different pay gaps.
The situation you describe (striking every other year) is indicative of low bargaining power, as they have to resort to extreme measures and still don't get what professions with high bargaining power get offered even without negotiation.
One cause of low bargaining power for this type of professions (characterised by low pay, relatively high education requirements, decent social status/respect, working with people, often majority female) is that in those positions "the market knows" that the strikers won't fulfil the only threat that matters, namely, simply abandoning that profession for a career path that pays more but is worse in other aspects (generally, unskilled or semi-skilled jobs with less social respectability and work conditions - e.g. painting jobs in construction, driving a garbage truck, etc; it generally would seem a downgrade for a teacher even with an increase in pay) and that theres a nontrivial niche of young people who are still intentionally studying for that profession despite knowing that the pay sucks, because they are motivated by factors other than money. The more people there are who are highly motivated to do that job for non-compensation reasons, the less bargaining power the whole profession has, and it is reflected in pay.
One cause of low bargaining power for this type of professions (characterised by low pay, relatively high education requirements, decent social status/respect, working with people, often majority female) is that in those positions "the market knows" that the strikers won't fulfil the only threat that matters, namely, simply abandoning that profession for a career path that pays more but is worse in other aspects (generally, unskilled or semi-skilled jobs with less social respectability and work conditions - e.g. painting jobs in construction, driving a garbage truck, etc; it generally would seem a downgrade for a teacher even with an increase in pay) and that theres a nontrivial niche of young people who are still intentionally studying for that profession despite knowing that the pay sucks, because they are motivated by factors other than money. The more people there are who are highly motivated to do that job for non-compensation reasons, the less bargaining power the whole profession has, and it is reflected in pay.
See, this makes me think that the term “Bargaining power” is a post-hoc construction with a-priori explanatory power for salaries. Saying “People have higher salaries because they have more bargaining power” sounds to me like people stating that „courageous people score highly on the courageous personality factor“, or that “there are so many unmarried men because there are so many bachelors”.
Or maybe low bargaining power is just another way to say easily exploitable in the current economic system. If that is the case I’ll subscribe to your theory, as a very similar theory was constructed by Karl Marx in 1867.
Or maybe low bargaining power is just another way to say easily exploitable in the current economic system. If that is the case I’ll subscribe to your theory, as a very similar theory was constructed by Karl Marx in 1867.
Bargaining power would refer also to the power to obtain favorable non-salary conditions (and to other types of negotiations), but "low bargaining power" certainly does imply "easily exploitable", yes. It's not entirely tautological - it does say that they get a poor bargain because they're in weak position to bargain for more, which is kind of the default cause for that (at least in economies with a mostly free labor market - if the salaries aren't set by market, then bargaining power is not that relevant), but it also clarifies that the poor bargain didn't happen because of, say, lack of trying or lack of information or fraud or pure randomness, and it also implies that their situation won't change unless either the main factors weakening their bargaining power (mostly the "excessive supply" issue) change or they get handed (e.g. through legislation) a better bargain than they would be able to negotiate.
The power to strike is relevant as the capability for collective action does grant a somewhat higher bargaining power that they would have otherwise, other things being equal; but of course there are many professions which have a higher inherent bargaining power without even attempting to organize, simply due to having better alternative employment opportunities.
The power to strike is relevant as the capability for collective action does grant a somewhat higher bargaining power that they would have otherwise, other things being equal; but of course there are many professions which have a higher inherent bargaining power without even attempting to organize, simply due to having better alternative employment opportunities.
I find the author's point to be a very disturbing one: If we really pay people fairly, I won't be able to afford all these cheap consumer goods any more.
The "idea" of location based pay for developers is that you an have the same standard of living in Boise on less salary than in London. Whether this is true or not is subject to debate.
But what's not subject to debate is that, as you say, Bangladeshi garment workers do not have a standard of living that is okay. What do we do with the fact that our (in the USA or UK) cheap clothing comes at that "price"?
The "idea" of location based pay for developers is that you an have the same standard of living in Boise on less salary than in London. Whether this is true or not is subject to debate.
But what's not subject to debate is that, as you say, Bangladeshi garment workers do not have a standard of living that is okay. What do we do with the fact that our (in the USA or UK) cheap clothing comes at that "price"?
Author of the original piece here; see my response elsewhere in this thread: https://news.ycombinator.com/item?id=26141175
On the flipside, if you can make Silicon Valley money and go live in Mexico or Thailand, chances are that you will cause real estate prices there to increase and become less accessible to the locals. You and your high salary, particularly in a low-income country, are an inflationary force. Does you bringing your high income there automatically translate in enriching the local community?
It definitely does. You are not going to have enough people migrating to make a large enough difference. By all means, go to Thialand, they will welcome you with open arms. More money in the economy means more jobs for people.
More people with a higher level of technical skill will also enrich the community should you choose to participate.
More people with a higher level of technical skill will also enrich the community should you choose to participate.
Foreigners can not buy or own properties in Thailand. Often this scenario enriches some local after divorce.
If you live in Thailand and marry a Thai national, its pretty straight forwards to become a citizen.
There's no reason Joe Shmoe developer won't do this.
There's no reason Joe Shmoe developer won't do this.
I wouldn't call living and working in Thailand for 10 years, speaking fluent Thai and passing an interview in Thai for your citizenship straightforward, but YMMV.
edit: typo
edit: typo
If you are married to a Thai national the only requirement is that you stay there for 3 years.
You can get a marriage visa. Actual citizenship is much more involved, and even for people meeting the difficult criteria I haven't heard of the process succeeding without help from people of influence. One of the criteria is working for a single Thai company continuously for several years, and won't be an option for remote workers. Remote workers can't even get a business visa, and end up in a legal gray area.
Only if you go there looking for luxury. The best at this gambit locate far away from where any other American or German or Canadian is likely to tread.
Perhaps it does, if Thai workers get their pay increased on a large enough scale. But these workers will also inject this increased money into the local economy, and pay more taxes towards the local government, so...
I have a feeling that many of the engineers who live in locations far off from SV such as Bangladesh, who do have the skills to make it as a FAANG employee (for example), already choose to move to SV/London/etc and collect that salary. If so, there shouldn't really be all that much untapped potential* in the third world. The way FAANG companies greedily hoover up the eligible talent pool (regardless of whether they have good project ideas for those folks to work on) makes me think it's not likely they'd overlook a vast pool of talent that's cheaper and just as productive.
*Not counting those who never had access to education or a computer to become fully realized engineers in the first place. Just commenting on ready-to-go software engineers.
*Not counting those who never had access to education or a computer to become fully realized engineers in the first place. Just commenting on ready-to-go software engineers.
I think there are a lot of preconceived notions regarding developing nations.
A lot of people who can leave, do leave. I left, for example. However, there are a tonne of people who are super smart, but can't leave because of their ageing parents, or other reasons.
Leaving everything you know behind takes courage, and adapting to a new world, a new life takes a lot out of you. Not everyone wants to leave their loved ones. Furthermore, if you are older, it's even harder.
Funny story, one of the reasons I left Bangladesh is because I used to work for this company that paid me 1/6th of the salary someone else was making in a more developed Asian country. I was doing the same work, succeeding at it too.
However, when I wanted equal pay for equal work, they decided to not renew my contract. Back then, I was young, so I decided to apply abroad, an was luckily accepted. Not everyone can do this, because again, you have family, and responsibilities.
2 months into my new job, my old company begs me to come back, and offers me the salary that was more than I wanted, and an O1 visa sponsorship should I want to go to America.
A lot of people who can leave, do leave. I left, for example. However, there are a tonne of people who are super smart, but can't leave because of their ageing parents, or other reasons.
Leaving everything you know behind takes courage, and adapting to a new world, a new life takes a lot out of you. Not everyone wants to leave their loved ones. Furthermore, if you are older, it's even harder.
Funny story, one of the reasons I left Bangladesh is because I used to work for this company that paid me 1/6th of the salary someone else was making in a more developed Asian country. I was doing the same work, succeeding at it too.
However, when I wanted equal pay for equal work, they decided to not renew my contract. Back then, I was young, so I decided to apply abroad, an was luckily accepted. Not everyone can do this, because again, you have family, and responsibilities.
2 months into my new job, my old company begs me to come back, and offers me the salary that was more than I wanted, and an O1 visa sponsorship should I want to go to America.
Most Eastern Europeans I worked with in the Netherlands all had one thing in common - they put the effort in to leave their home countries (Romania, Hungary, Greece, Bulgaria, Belarus, Latvia, Lithuania, etc.) and never return. They took all the optional extra courses at school, took as many professional exams as they could afford, and worked on their craft as software engineers to get an opportunity to move to NL, IE or UK.
In Bangladesh, the tried and tested way is to enrol in a master's program and take it from there. Not always something that you can afford though.
Mostly because they're sick with corruption and politicians in those countries or they hadn't had much to leave behind.
Even then, it took my friend 7 years and the death of his father to start thinking about leaving the country. By 7 years, I mean that I've been telling him to leave for 7 years.
Definitely agree with the inertia thing. The labor market works in the long-run but isn't frictionless for practical real-world reasons pertaining to personality, personal circumstance, immigration policy and so on.
that's quite silly - leaving your family is a very questionable deal, you grandparents or parents basically wither away without seeing their children and grandchildren.
The visa laws make you a second-class citizen (well non- citizen, really) and ensure that you cannot spend much time with them - there is a maximum limit on the number of days you can spend out of the country. Also usually they mean you cannot bring your grandparents. Hell, UK home office basically killed a woman because they denied entry to UK to her sister for an organ transplant. https://www.independent.co.uk/news/uk/home-news/leukaemia-pa...
You have to have relatives and friends that can look after your family, because every now and then they need help and you are not there to help them.
For many folks who have half-decent life at home, the trouble is not worth it. I have many friends from eastern Europe who have come to UK to study and went back.
Lastly, why is FAANG the ultimate benchmark? Some people develop safety and life-critical systems, land rovers on mars, etc. I hold them in higher regard.
The visa laws make you a second-class citizen (well non- citizen, really) and ensure that you cannot spend much time with them - there is a maximum limit on the number of days you can spend out of the country. Also usually they mean you cannot bring your grandparents. Hell, UK home office basically killed a woman because they denied entry to UK to her sister for an organ transplant. https://www.independent.co.uk/news/uk/home-news/leukaemia-pa...
You have to have relatives and friends that can look after your family, because every now and then they need help and you are not there to help them.
For many folks who have half-decent life at home, the trouble is not worth it. I have many friends from eastern Europe who have come to UK to study and went back.
Lastly, why is FAANG the ultimate benchmark? Some people develop safety and life-critical systems, land rovers on mars, etc. I hold them in higher regard.
There are vast numbers of people from poorer countries working in richer countries so that they can send the money home to their families. In the Phillipines (for example) it's so normal for parents to work abroad (usually in Arab countries) while the grandparents look after the children, the whole economy is affected by it.
And FAANG is the ultimate benchmark for salaries because they pay so much, not because they're held in high regard. In fact, the stories coming out of FAANG (FB and Apple especially) seem to show these are dystopian nightmare workplaces that you only work in because of the ridiculously high salaries.
And FAANG is the ultimate benchmark for salaries because they pay so much, not because they're held in high regard. In fact, the stories coming out of FAANG (FB and Apple especially) seem to show these are dystopian nightmare workplaces that you only work in because of the ridiculously high salaries.
Fun fact!
Income is NEGATIVELY correlated with job satisfaction in SOME scenarios. Imagine the thought experiment: you get paid GREAT, but you boss is aweful. You decide to quit as soon as you find a job that let's you keep you current lifestyle. If it is hard to do that, you keep your job longer...and you have poor satisfaction.
To counter this, I got a 10% raise 6 months ago, and it was tots legit.
Income is NEGATIVELY correlated with job satisfaction in SOME scenarios. Imagine the thought experiment: you get paid GREAT, but you boss is aweful. You decide to quit as soon as you find a job that let's you keep you current lifestyle. If it is hard to do that, you keep your job longer...and you have poor satisfaction.
To counter this, I got a 10% raise 6 months ago, and it was tots legit.
I very much doubt this is true. I’m sure there are a very large number of FAANG quality engineers all over the eastern US, let alone other countries, that couldn’t or wouldn’t make the move to SV. I would be willing to put money on it being the MAJORITY capable of being hired into those roles couldn’t or wouldn’t move there to take them.
There is no amount of money that would have convinced me to leave Florida. My family and my wife’s family is here. My children’s friends and extended support networks are here. This life is not worth losing for any pay raise. I’m willing to bet a very large number of quality engineer made the same decision I did.
There is no amount of money that would have convinced me to leave Florida. My family and my wife’s family is here. My children’s friends and extended support networks are here. This life is not worth losing for any pay raise. I’m willing to bet a very large number of quality engineer made the same decision I did.
Not everyone is willing to leave family, friends, and country behind.
But its a larger fraction than ever before in history, its pretty safe to say. So the problem is perhaps the smallest its been, and declining. That's a positive thing.
I don't think that's true. See, for example,https://www.brookings.edu/blog/the-avenue/2019/11/22/for-the...
So many parts of the world have such terrible living conditions that anyone with an option will leave even though it means leaving your family and everything you know behind, while those left behind are those with no options stuck there, and most rich countries do their best to make it harder and harder for anyone else to make it there... and you conclude this is a positive thing? Truly we live in the best of all possible worlds!
> So many parts of the world have such terrible living conditions that anyone with an option will leave
Hm - I roll to doubt. I think there's an idea in the USA (and the west more broadly) that the quality of life in wealthy countries is Good and the quality of life in poor countries is Terrible For Everyone. (At least, everyone but the ultra-wealthy).
Thats reductive, and (perhaps unfairly) I'm pattern matching your comment to that perspective.
The quality of life for most people in Bangladesh is way better than the quality of life anyone living in a tent city in SF / LA. I doubt many people living in tents in Oakland are scrambling to move to Bangladesh, for kind of obvious reasons. (Its scary, language barrier, culture barriers, no extended support networks, flights are expensive if you're poor, etc etc.) I think it works the same way in reverse.
Hm - I roll to doubt. I think there's an idea in the USA (and the west more broadly) that the quality of life in wealthy countries is Good and the quality of life in poor countries is Terrible For Everyone. (At least, everyone but the ultra-wealthy).
Thats reductive, and (perhaps unfairly) I'm pattern matching your comment to that perspective.
The quality of life for most people in Bangladesh is way better than the quality of life anyone living in a tent city in SF / LA. I doubt many people living in tents in Oakland are scrambling to move to Bangladesh, for kind of obvious reasons. (Its scary, language barrier, culture barriers, no extended support networks, flights are expensive if you're poor, etc etc.) I think it works the same way in reverse.
> The quality of life for most people in Bangladesh is way better than the quality of life anyone living in a tent city in SF / LA.
It's true but misses a broader picture. There are only ~0.5M homeless people in the US [1], or 0.1% of the population. What fraction of Bangladesh lives in that state? Being from the Indian subcontinent and having traveled extensively around the globe, I assure you that that is a much higher fraction and that the quality of life in the US is far far superior than what you'd find in a lot of third world countries.
[1] https://endhomelessness.org/homelessness-in-america/homeless...
It's true but misses a broader picture. There are only ~0.5M homeless people in the US [1], or 0.1% of the population. What fraction of Bangladesh lives in that state? Being from the Indian subcontinent and having traveled extensively around the globe, I assure you that that is a much higher fraction and that the quality of life in the US is far far superior than what you'd find in a lot of third world countries.
[1] https://endhomelessness.org/homelessness-in-america/homeless...
Its against the site rules to construe the worst possible meaning to a comment. And its lazy to put words in others' mouths. If you have something to say, just say it. Without attacking others, please.
I thought you were saying it was a positive thing that so many people were willing to leave family, friends, and country behind, in leaving poor countries for rich ones.
I may have misunderstood? There was a comment saying not everyone was willing to do this, then you said but more people are than ever before in history, which is positive, no? Did I misunderstand?
But you're right, sorry, I could have phrased my reply in a way that was more explicit about not putting words into your mouth.
I should have just put it in my own words, without projection:
You say, if I'm understanding, that it's a great thing that never before in history have so many been willing to leave family, friends, and country behind. When I see that so many people are leaving family, friends, and everything they know behind for other countries, when they are moving from poorer countries to richer ones, what I see is that quality of life is so unequal across the planet, and people are so desperate. While meanwhile most rich countries are doing their best to keep out these desperate people hoping to leave everything they knew behind for a chance at a secure and dignified life. This to me does not seem like a positive thing. People should better be able to find safety, security, and dignity without having to leave behind their family, friends, and country.
I may have misunderstood? There was a comment saying not everyone was willing to do this, then you said but more people are than ever before in history, which is positive, no? Did I misunderstand?
But you're right, sorry, I could have phrased my reply in a way that was more explicit about not putting words into your mouth.
I should have just put it in my own words, without projection:
You say, if I'm understanding, that it's a great thing that never before in history have so many been willing to leave family, friends, and country behind. When I see that so many people are leaving family, friends, and everything they know behind for other countries, when they are moving from poorer countries to richer ones, what I see is that quality of life is so unequal across the planet, and people are so desperate. While meanwhile most rich countries are doing their best to keep out these desperate people hoping to leave everything they knew behind for a chance at a secure and dignified life. This to me does not seem like a positive thing. People should better be able to find safety, security, and dignity without having to leave behind their family, friends, and country.
Do we really leave anybody? We can talk to them on Skype for free at any time. I actually see some of my remote siblings more often than the local ones.
The world has changed.
The world has changed.
you really overestimate how much FAANG companies understand about the world, or how to hire productive employees. It's all dances and bullshit, and puffery on behalf of the employees to make you believe we're the pinnacle of human intellect. I should know, I'm one of them :)
There are plenty of skilled engineers who either don't make it into FAANG or don't manage to get into the US.
As if it was easy to emigrate to the US or western Europe for non-citizens…
It's super easy in case you are a talented young person. See Canada's point base migration system or Blue Card for EU.
> I have a feeling that many of the engineers who live in locations far off from SV such as Bangladesh, who do have the skills to make it as a FAANG employee (for example), already choose to move to SV/London/etc and collect that salary
What is this feeling based on? You have to invest a lot of money, time and effort into paperwork before you can dream of migrating. One does not simply "choose" to move; it takes months or years of effort - not every talented individual takes this route, or even thinks it's worthwhile - there are a lot of trade-offs, even for the most naïve. I suspect this idea of talent=success is an instance of the Just-world fallacy (one way of reading what you said is that those who are talented have already been rewarded by FAANG jobs, therefore those who haven't yet are not talented, obviously)
What is this feeling based on? You have to invest a lot of money, time and effort into paperwork before you can dream of migrating. One does not simply "choose" to move; it takes months or years of effort - not every talented individual takes this route, or even thinks it's worthwhile - there are a lot of trade-offs, even for the most naïve. I suspect this idea of talent=success is an instance of the Just-world fallacy (one way of reading what you said is that those who are talented have already been rewarded by FAANG jobs, therefore those who haven't yet are not talented, obviously)
> the cheap stuff that you're getting is because someone is getting a super bad deal
And this is Bad and should be fixed. Developed countries should push poorer countries into paying better salaries to their workers and improve their conditions. This would directly benefit "westerners" too, since it would reduce migratory pressures and get a more level-playing field in economic sectors that have been wiped from these shores -- some even in quite strategic sectors, like the PPE shenanigans last year showed.
Would that mean my plastic bullshit would get more expensive? Yeah, so what? Maybe this would reignite the debate on effective redistribution in our countries too, which was basically killed in 1989.
And this is Bad and should be fixed. Developed countries should push poorer countries into paying better salaries to their workers and improve their conditions. This would directly benefit "westerners" too, since it would reduce migratory pressures and get a more level-playing field in economic sectors that have been wiped from these shores -- some even in quite strategic sectors, like the PPE shenanigans last year showed.
Would that mean my plastic bullshit would get more expensive? Yeah, so what? Maybe this would reignite the debate on effective redistribution in our countries too, which was basically killed in 1989.
It's not always even passed to consumer -> you might pay $20 for a T-shirt but the worker might get paid $1 for it!
I totally agree with this. The exploitation of the human resource is true and brutal!
I grew up in Sri Lanka, and there is a relatively small yet similar situation. Workers are paid $100-200, and have the jobs hanging in a thread leaving no room for negotiations.
There is a massive environmental impact as well. Those big companies often don't play by the rules, and often pollute the water ways, air, etc because who cares if they make money.
I grew up in Sri Lanka, and there is a relatively small yet similar situation. Workers are paid $100-200, and have the jobs hanging in a thread leaving no room for negotiations.
There is a massive environmental impact as well. Those big companies often don't play by the rules, and often pollute the water ways, air, etc because who cares if they make money.
> They are uneducated, so they don't know what they deserve. They are uneducated, so they don't know what they deserve.
You don’t need a formal education to know whether you are being taken advantage of. Only people with formal education believe such lies.
You don’t need a formal education to know whether you are being taken advantage of. Only people with formal education believe such lies.
> Good, move to a place where your salary is worth more, and work to enrich that community. Why should SF and NY get all the benefits of economic growth?
Do you really think Globalization should force everyone to move where their salary is worth more?
Do you really think Globalization should force everyone to move where their salary is worth more?
Salary is a negotiation between parties. Looked at soberly, you're the business, your employer is your customer, and the salary they pay you is really the price you charge for your services.
They have no obligation to pay more for your services than they think they have to, compared to alternatives on the market. And you have no obligation to charge less for your services than you can get from other "customers". Either of you can negotiate the price up or down, and the other is free to take it or leave it.
It's not about who "deserves" what. It's a simple negotiation, like every other business transaction.
The more valuable (and less replaceable) your services are, the more pay you can successfully negotiate for. I guarantee you there are plenty of people at these "location-based pay" companies who've negotiated for considerably higher pay than others in their location. Just as there are many businesses (e.g. Apple) who've found a way to charge more for their products than their competitors have.
So it's worth learning to negotiate. And, perhaps more importantly, it's worth learning to provide massive value that's hard to replace. Or accepting the tradeoffs if you choose not to.
Let's say you mould your skillset to fit perfectly into a commonly-open job description: front-end software engineer. Well great, the benefit is you have lots of jobs you can apply for, so you can easily "fire" one company to go work at another. The downside is you're now in direct competition with a million other people who've shaped themselves to have the same common skillset, so it's easier for companies to fire you. Competition drives prices down and makes you more easily replaceable. But it gives you some safety due to redundancy. That's often a reasonable tradeoff to make, but you should be aware you're making it. If you want the big bucks, it helps to be rarer, and to work at places and in roles where it's easier to demonstrate your value.
They have no obligation to pay more for your services than they think they have to, compared to alternatives on the market. And you have no obligation to charge less for your services than you can get from other "customers". Either of you can negotiate the price up or down, and the other is free to take it or leave it.
It's not about who "deserves" what. It's a simple negotiation, like every other business transaction.
The more valuable (and less replaceable) your services are, the more pay you can successfully negotiate for. I guarantee you there are plenty of people at these "location-based pay" companies who've negotiated for considerably higher pay than others in their location. Just as there are many businesses (e.g. Apple) who've found a way to charge more for their products than their competitors have.
So it's worth learning to negotiate. And, perhaps more importantly, it's worth learning to provide massive value that's hard to replace. Or accepting the tradeoffs if you choose not to.
Let's say you mould your skillset to fit perfectly into a commonly-open job description: front-end software engineer. Well great, the benefit is you have lots of jobs you can apply for, so you can easily "fire" one company to go work at another. The downside is you're now in direct competition with a million other people who've shaped themselves to have the same common skillset, so it's easier for companies to fire you. Competition drives prices down and makes you more easily replaceable. But it gives you some safety due to redundancy. That's often a reasonable tradeoff to make, but you should be aware you're making it. If you want the big bucks, it helps to be rarer, and to work at places and in roles where it's easier to demonstrate your value.
This ^ 1000x. Every job you join is a business negotiation between buyer and seller. Companies want to offer the lowest compensation they can get an engineer for, the engineer wants the highest compensating company they can get an offer from. The match is where the market gets what the market wants.
I’ve seen plenty of employees with deep context on codebase able to retain their SF salary as they’ve moved locations. For the business, it makes little difference where they work so they keep on paying, they’d rather not lose.
For new hires, it’s a different game. Global means a global talent pool to choose from, a bigger market. Sometimes a cheaper market.
Companies raise their salaries when they can’t hire talent they want at a price point. So know your worth, and be willing to walk away. Also offer something valuable that companies don’t want to walk away from.
I’ve seen plenty of employees with deep context on codebase able to retain their SF salary as they’ve moved locations. For the business, it makes little difference where they work so they keep on paying, they’d rather not lose.
For new hires, it’s a different game. Global means a global talent pool to choose from, a bigger market. Sometimes a cheaper market.
Companies raise their salaries when they can’t hire talent they want at a price point. So know your worth, and be willing to walk away. Also offer something valuable that companies don’t want to walk away from.
Did you follow your own advice and negotiate with Stripe when they acquired Indie Hackers? :P.
Of course! I don't claim to be a master negotiator -- far from it. But I did negotiate. And, more importantly, I'm quite differentiated. There was no other Indie Hackers to buy.
But what was your BATNA?
Stay independent and keep growing my company and my revenue as I'd been doing, with no boss or anyone to answer to. It's called "Indie" Hackers after all :)
To this end, do you (or anyone else reading this) have suggestions on good books to learn negotiation strategy and tactics?
I've read Never Split the Difference by Chris Voss [0] and found it interesting but I'm curious as to other reads folks might recommend.
0 - https://www.goodreads.com/book/show/26156469-never-split-the...
I've read Never Split the Difference by Chris Voss [0] and found it interesting but I'm curious as to other reads folks might recommend.
0 - https://www.goodreads.com/book/show/26156469-never-split-the...
Fearless Salary Negotiation is a great book - very approachable and practical. I learned a lot from it.
Also for context - just remember that actually negotiating already puts you in a good subset of people. Many people - including myself initially - are reluctant to negotiate. It's a learned skill.
https://fearlesssalarynegotiation.com
Also for context - just remember that actually negotiating already puts you in a good subset of people. Many people - including myself initially - are reluctant to negotiate. It's a learned skill.
https://fearlesssalarynegotiation.com
Agree 100% – of course it helps to have information to back up your negotiation which is why we built Levels.fyi
If you're running a remote company, there's another reason (besides fairness) that location-based pay is a bad idea: it makes it harder to create a compensation structure that incentivizes high performance.
If Person A is outperforming Person B, but is getting paid less because they happen to live somewhere else, you lose the ability to claim that you compensate people for performance without sounding like you're talking out of both sides of your mouth. Not only is Person A not going to be happy about that, Person A is not going to believe that compensation at your company is based on performance.
Companies that want to hire and incentivize the best people need to be congruent in their messaging around compensation and performance. Claiming that compensation is performance-based and then including a factor (location) that has no bearing on performance is incongruent and will not help to develop the right culture in this regard.
If Person A is outperforming Person B, but is getting paid less because they happen to live somewhere else, you lose the ability to claim that you compensate people for performance without sounding like you're talking out of both sides of your mouth. Not only is Person A not going to be happy about that, Person A is not going to believe that compensation at your company is based on performance.
Companies that want to hire and incentivize the best people need to be congruent in their messaging around compensation and performance. Claiming that compensation is performance-based and then including a factor (location) that has no bearing on performance is incongruent and will not help to develop the right culture in this regard.
[deleted]
I mean it’s, but if you don’t take location into account then suddenly you can only hire from low cost locations where the talent does not exist.
It’s really unfair whatever you do, and right now there is no good solution. Partially because there is no good way of understanding the value of an employee.
It’s really unfair whatever you do, and right now there is no good solution. Partially because there is no good way of understanding the value of an employee.
> right now there is no good solution. Partially because there is no good way of understanding the value of an employee.
This is the perception among many startups, but I think this is more perception than it is reality.
Exceptional engineers are several times more valuable to most startups than an average engineer, but almost all will hire an average engineer for $115k before they hire an exceptional one for $175k. There's no rational basis for this, but it is the path of least resistance. You won't need to defend hiring an engineer for $115k to cofounders or investors.
This is counter-intuitive, but the solution is to actually pay more for remote engineering jobs. When you do this, you're widening your talent pool to the entire world - and then you're selecting from the very top of the pool. We've been doing this for years, and it's been one of our most significant competitive advantages.
This is the perception among many startups, but I think this is more perception than it is reality.
Exceptional engineers are several times more valuable to most startups than an average engineer, but almost all will hire an average engineer for $115k before they hire an exceptional one for $175k. There's no rational basis for this, but it is the path of least resistance. You won't need to defend hiring an engineer for $115k to cofounders or investors.
This is counter-intuitive, but the solution is to actually pay more for remote engineering jobs. When you do this, you're widening your talent pool to the entire world - and then you're selecting from the very top of the pool. We've been doing this for years, and it's been one of our most significant competitive advantages.
Yeah, I feel we are a bit in an inverted world. Startups in my opinion need better engineers as they are in the hard part of making them product while the large companies mostly need people who can follow existing processes and do as they are told. Both types of companies hire the opposite because of economic incentives.
I also agree with your solution, but not sure how practical it is short term. Long term that is probably what will happen.
I also agree with your solution, but not sure how practical it is short term. Long term that is probably what will happen.
Large companies also need excellent engineers because novel engineering problems emerge at scale and as a large codebase evolves over the years. You can't really attack those problems by only doing what you're told. If nothing else, someone has to figure out what the plan is.
For sure, but they need a few of those and a lot of average engineers with leadership skills to maintain everything. At least that is what I think having mostly working in very large FAANG's.
The really hard part is in starting new projects, or maybe that is just hard for me.
The really hard part is in starting new projects, or maybe that is just hard for me.
whatever happened to the mentality, that "nobody ever got fired buying IBM" - seems to me that 175k for a corporation paying an exceptional engineer would see that as a steal.
I think a lot of the discussion is assuming FAANG rates, and realistically, exceptional engineers at those companies should be getting paid absurd, outrageous amounts of money. However what you're talking about is a smaller company, and sure, you can hire two average engineers for only 2/7th more money than one exceptional person.
I think a lot of the discussion is assuming FAANG rates, and realistically, exceptional engineers at those companies should be getting paid absurd, outrageous amounts of money. However what you're talking about is a smaller company, and sure, you can hire two average engineers for only 2/7th more money than one exceptional person.
What do you think of employee-owned companies as a way to accurately assess that value? It seems like capitalism and the question of whether profits should go to laborers vs owners is central to this issue.
I mean I like it, but I don’t think that’s very relevant as I don’t have a few billion dollars.
There is just so much money splashing around in investor driven companies right now because of cheap money that I don’t see it working out.
I also think investors provide more then money that is hard to overcome. They have a network you will only get access to if they get cheap investments and for some type of companies that is necessary.
There is just so much money splashing around in investor driven companies right now because of cheap money that I don’t see it working out.
I also think investors provide more then money that is hard to overcome. They have a network you will only get access to if they get cheap investments and for some type of companies that is necessary.
If I could choose between paying $500 rent and earning $10000 a month or paying $5000 rent and earning $10001 a month I'd pick the first one even if the absolute number is higher, and I wouldn't feel ripped off if the other guy was a newer employee. The point of contention here seems to be people wanting to see a bigger number regardless of who actually takes home more disposable income. Seems short sighted to me.
The numbers don't quite work out that way though. What if it's $500 rent and $10,000 a month or $5000 rent and $16,000 per month?
I managed remote, multi-national teams before COVID.
The unspoken advantage of remote teams is that employers can use the location pay disparity to their advantage. For example, we had pressure from executives to do more hiring in our international offices because employees were cheaper.
Abandoning location-based pay sounds good to people who feel they are disadvantaged due to location, but location-based modifiers suddenly become popular again when companies start moving compensation toward their cheapest location instead of toward their most expensive location.
The other advantage of hiring in cheap locations is that it's equally cheaper to provide large incentives to the best performers in those locations.
I could pay $150,000 for an average engineer at some of our US offices, and that employee would still be shopping around for their next 10% raise at a competing company.
Or I could pay $100,000 USD equivalent for a great engineer at some of our international offices, and that employee would be so far above market rate that they'd be doing their best work every day because they were so thankful for the opportunity.
I suspect HN's opinion on location-based pay might change over time as Americans realize that US salaries are the outlier on an international scale, regardless of which state or city you live in.
The unspoken advantage of remote teams is that employers can use the location pay disparity to their advantage. For example, we had pressure from executives to do more hiring in our international offices because employees were cheaper.
Abandoning location-based pay sounds good to people who feel they are disadvantaged due to location, but location-based modifiers suddenly become popular again when companies start moving compensation toward their cheapest location instead of toward their most expensive location.
The other advantage of hiring in cheap locations is that it's equally cheaper to provide large incentives to the best performers in those locations.
I could pay $150,000 for an average engineer at some of our US offices, and that employee would still be shopping around for their next 10% raise at a competing company.
Or I could pay $100,000 USD equivalent for a great engineer at some of our international offices, and that employee would be so far above market rate that they'd be doing their best work every day because they were so thankful for the opportunity.
I suspect HN's opinion on location-based pay might change over time as Americans realize that US salaries are the outlier on an international scale, regardless of which state or city you live in.
There's nothing stopping companies from shipping their jobs overseas. It's always been an option. Luckily (for Americans), we as workers carry significant advantages over those who work overseas. If we didn't, there would be no reason to hire locally at all.
Moved from Australia to US. The significant advantage is same timezone, physical proximity, top notch CS universities and the idea that birds of a feather flock together.
Remote is great, but there’s something valuable about being in the same room when making decisions. The communication bandwidth really matters for small to medium sized startups.
I don’t have strong data to back this up, but an anecdotal evidence is how many unicorns SV spins up vs rest of the world. The concentration of talent + VCs + risk tolerating culture is what makes SV special.
Remote is great, but there’s something valuable about being in the same room when making decisions. The communication bandwidth really matters for small to medium sized startups.
I don’t have strong data to back this up, but an anecdotal evidence is how many unicorns SV spins up vs rest of the world. The concentration of talent + VCs + risk tolerating culture is what makes SV special.
what are those "significant advantages"?
English.
Timezones. Also, lack of enough talent in other countries with similar timezones (Canada/Mexico) since talented folks there can easily move to the US on TN visa.
A lot of high-growth companies starting in the US[1], thus providing a BATNA to what your current job is offering.
Lack of regulatory hurdles to hire more in the US vs setting up shop in a different country and bring in more regulatory compliance requirements.
[1] This itself is due to other factors like: deep capital pools available for seemingly ridiculous ideas, lots of existing talent available to scale your company once there is a product market fit (all the current execs/senior people in tech), relatively less regulations etc.
Timezones. Also, lack of enough talent in other countries with similar timezones (Canada/Mexico) since talented folks there can easily move to the US on TN visa.
A lot of high-growth companies starting in the US[1], thus providing a BATNA to what your current job is offering.
Lack of regulatory hurdles to hire more in the US vs setting up shop in a different country and bring in more regulatory compliance requirements.
[1] This itself is due to other factors like: deep capital pools available for seemingly ridiculous ideas, lots of existing talent available to scale your company once there is a product market fit (all the current execs/senior people in tech), relatively less regulations etc.
No idea, but I presume it’s partly education/pedigree, lack of language barrier, accountability due to being in the same network, and availability in the same timezones.
Can confirm. Was involved in interviewing multiple candidates a day the moment our non-London UK office opened
> I managed remote, multi-national teams before COVID.
> I suspect HN's opinion on location-based pay might change over time as Americans realize that US salaries are the outlier on an international scale
The world's most valuable tech companies still do the vast majority of development work in their home countries, and the trend to keep core development at home has only accelerated in recent years. A lot of things would have to change - including that - in order for this belief to age poorly.
Also fwiw, we built our team fully-remote pre-COVID as well, with location-agnostic pay. It only becomes clearer that this has been the right move with each passing year, and we're continuing to lean into this as a result.
I will say, though, that this can depend on what type of company you're building. If your company's core competency is something other than software (e.g. sales), building an extremely high-performing engineering culture may not be the most important thing to your company, and the tradeoffs you have to make in order to do so may not be worth it.
> I suspect HN's opinion on location-based pay might change over time as Americans realize that US salaries are the outlier on an international scale
The world's most valuable tech companies still do the vast majority of development work in their home countries, and the trend to keep core development at home has only accelerated in recent years. A lot of things would have to change - including that - in order for this belief to age poorly.
Also fwiw, we built our team fully-remote pre-COVID as well, with location-agnostic pay. It only becomes clearer that this has been the right move with each passing year, and we're continuing to lean into this as a result.
I will say, though, that this can depend on what type of company you're building. If your company's core competency is something other than software (e.g. sales), building an extremely high-performing engineering culture may not be the most important thing to your company, and the tradeoffs you have to make in order to do so may not be worth it.
What's missing from these debates is optionality. A company pays you not only what it takes for you to do the job, but also their perceptions of your options. Two people working the same job on-site at the same company can have a substantial pay difference even without negotiation because one is self-taught and has only high school while another has a master's degree from Stanford. Yes, the former's competent and shows drive and ambition and that's nice. The company just scored a dark horse. But the company also knows the former employee (likely) isn't as aggressively courted by other companies which can pay well, so they feel they can pay that person less.
If you're the only person in the world who can do what Facebook really needs done, they'll pay you $1M+ to do it from anywhere in the world.
If you're the only person in the world who can do what Facebook really needs done, they'll pay you $1M+ to do it from anywhere in the world.
I agree with you. It will take a while for the adjustment of remote to re-settle to a new norm.
There is one other thing that is a small factor in all of this. I'm not saying it is unsurmountable or anything but local/state/country taxes are a factor. We hired someone remote recently who was in Canada. We had to create a new company in CA just so we could pay this individual. For salaried/W2 style employment, there can be a non-trivial amount of extra legal/finance work for the company. Hiring local-ish avoids this. Obviously, having everyone on a 1099/Contractor style employment would avoid this too but most people want salary plus provided benefits. Again, a larger company may easily be able to absorb these costs but they aren't zero.
There is one other thing that is a small factor in all of this. I'm not saying it is unsurmountable or anything but local/state/country taxes are a factor. We hired someone remote recently who was in Canada. We had to create a new company in CA just so we could pay this individual. For salaried/W2 style employment, there can be a non-trivial amount of extra legal/finance work for the company. Hiring local-ish avoids this. Obviously, having everyone on a 1099/Contractor style employment would avoid this too but most people want salary plus provided benefits. Again, a larger company may easily be able to absorb these costs but they aren't zero.
There are SaaS services now that handle this problem, but honestly I am glad you did that. Most US company just hire as contractor in Canada even if it is not legal per Canadian law and it will get workers in trouble pretty soon I think. The CRA will crack down on that loophole and employees will be in trouble.
The underlying principle here is competition.
A worker sells their labor and a company purchases it.
When everyone lived in SF, a worker wouldn't accept a job paying below $100k because they wouldn't be able to afford to live. That same person in a cheaper state could negotiate a lower price, but most of the talent was saturated in SF. Now that everyone has left SF, there's no point in paying those prices if they can still retain you for a lower wage.
A worker sells their labor and a company purchases it.
When everyone lived in SF, a worker wouldn't accept a job paying below $100k because they wouldn't be able to afford to live. That same person in a cheaper state could negotiate a lower price, but most of the talent was saturated in SF. Now that everyone has left SF, there's no point in paying those prices if they can still retain you for a lower wage.
> But the company also knows the former employee (likely) isn't as aggressively courted by other companies which can pay well, so they feel they can pay that person less.
The corollary is that if you can reliably find and hire such people you’ll have a massive competitive advantage.
The corollary is that if you can reliably find and hire such people you’ll have a massive competitive advantage.
You are right of course, but as far as we know no one has figured out how to do that.
> A company pays you not only what it takes for you to do the job,
This is the same thing as:
>but also their perceptions of your options.
This is the same thing as:
>but also their perceptions of your options.
If you're that one person who can do that one Facebook thing I'm sure you can get way more that $1M and I think that's good.
But I don't think that's about optionality. That's about the actual value of your skill, and its scarcity.
Optionality is more like: Google would probably hire you do CRUD apps because you went to Stanford and passed our Google-like interview when we hired you to do CRUD apps, so we will pay you what we think it costs for you to not go do that at Google. Dave over here went to SF State and was hired before the algo-interview craze; no chance Google will hire him, so we can and will pay him less even if he makes better CRUD apps than you do.
If I, your hiring manager, also went to Stanford I will pay you even more because I sure think I have high optionality! And if my manager went to Stanford then all the better because he will immediately understand why you need more than Dave. Which, in the end, is true: Dave's still here, right?
But I don't think that's about optionality. That's about the actual value of your skill, and its scarcity.
Optionality is more like: Google would probably hire you do CRUD apps because you went to Stanford and passed our Google-like interview when we hired you to do CRUD apps, so we will pay you what we think it costs for you to not go do that at Google. Dave over here went to SF State and was hired before the algo-interview craze; no chance Google will hire him, so we can and will pay him less even if he makes better CRUD apps than you do.
If I, your hiring manager, also went to Stanford I will pay you even more because I sure think I have high optionality! And if my manager went to Stanford then all the better because he will immediately understand why you need more than Dave. Which, in the end, is true: Dave's still here, right?
Someone else alluded to it as well, you could just as easily view pay as a measure of how much it will take to get you to work for them, rather than a measurement of how much value you will provide the company. From that lens, location based pay almost makes sense.
But it's still a stupid and arbitrary mechanism, and if you're negotiating you should treat it that way. It sounds very systematic and regulatory, but it's not. Just ask them for what you think they're willing to pay you, just like any other negotiation.
But it's still a stupid and arbitrary mechanism, and if you're negotiating you should treat it that way. It sounds very systematic and regulatory, but it's not. Just ask them for what you think they're willing to pay you, just like any other negotiation.
Company doesn't pay based on the "value of your work" - it pays based on what other companies would pay you.
Local candidates are scarcer than remote.
Personally, I hate the resulting dynamic. Move to SF and the company basically subsidizes a million dollar mortgage. Move to Manila and your subsidized mansion could be $10k, 100 times less (maybe I'm exaggerating, I have no idea about real estate in the Philippines - but you get the idea). That's insane!
The worst part is that landlords get a huge cut of this, and I don't think they add a fraction of that value to society.
I hope that in the end, with the pandemic, it all balances out to two tiers: on-site and remote. I get that many companies still value attendance, whatever. I just hope that all remote positions balance out globally. It doesn't make sense to pay some guy in Utah twice as much as some guy from Honduras, if neither come into the office.
Local candidates are scarcer than remote.
Personally, I hate the resulting dynamic. Move to SF and the company basically subsidizes a million dollar mortgage. Move to Manila and your subsidized mansion could be $10k, 100 times less (maybe I'm exaggerating, I have no idea about real estate in the Philippines - but you get the idea). That's insane!
The worst part is that landlords get a huge cut of this, and I don't think they add a fraction of that value to society.
I hope that in the end, with the pandemic, it all balances out to two tiers: on-site and remote. I get that many companies still value attendance, whatever. I just hope that all remote positions balance out globally. It doesn't make sense to pay some guy in Utah twice as much as some guy from Honduras, if neither come into the office.
> I just hope that all remote positions balance out globally.
I've been working remotely since 2015 and the market has been gradually moving in this direction(at least in eastern Europe where I come from) - COVID-19 only speeded things up.
I've been working remotely since 2015 and the market has been gradually moving in this direction(at least in eastern Europe where I come from) - COVID-19 only speeded things up.
> It doesn't make sense to pay some guy in Utah twice as much as some guy from Honduras, if neither come into the office.
This assumes equal education, skill level, cultural norms and infrastructure. But these are often not equal. If your clients are in the US, hiring developers US side greatly reduces the chance of cultural misunderstanding and communication problems. Also timezone issues here too, for clients based on North America.
US higher education system is fairly strong, and not all countries are equal on that front. India for example, is known for degree mills and ways to "cheat" the system. Which is why US masters degrees are required for the most part. That is not to say there aren't incredibly smart people in every country, but it's not an even playing field and some countries have risks associated with hiring.
Another good example is infrastructure. I'm not sure how many times a developing world coworker has been blocked because of shoddy internet or inconsistent utilities.
These asymmetries will persist, remote or otherwise.
This assumes equal education, skill level, cultural norms and infrastructure. But these are often not equal. If your clients are in the US, hiring developers US side greatly reduces the chance of cultural misunderstanding and communication problems. Also timezone issues here too, for clients based on North America.
US higher education system is fairly strong, and not all countries are equal on that front. India for example, is known for degree mills and ways to "cheat" the system. Which is why US masters degrees are required for the most part. That is not to say there aren't incredibly smart people in every country, but it's not an even playing field and some countries have risks associated with hiring.
Another good example is infrastructure. I'm not sure how many times a developing world coworker has been blocked because of shoddy internet or inconsistent utilities.
These asymmetries will persist, remote or otherwise.
Assume "someone who moved from SF to Utah or Honduras"
The elephant in the room is not whether I‘m worth 150K in S.V. but 50K if my cost of living is lower elsewhere. The real issue is what enables S.V. companies top pay three times as much. Why is it not possible to set up a similar company elsewhere which makes similar revenue and should be either insanely profitable or pay 150K and employees would become insanely rich as cost of living are lower.
I think neither S.V. nor the market is rational.
I think neither S.V. nor the market is rational.
https://en.wikipedia.org/wiki/Economic_geography cities matter.
You might say "but...but...the internet". Well, perfecting remote work is just the beginning. The unplanned/sponteneous interactions that lead to new relationships also matter. Maybe when we get that soviet internet that browses you.
> I think neither S.V. nor the market is rational.
I agree, and it's possible general "bullshit jobs" and Q.E./softbank bubble type phenomena dwarf the intrinsic value of cities. But still, those are orthogonal effects. Contrary to most American nostalgia, going rural does not defeat the bullshit.
You might say "but...but...the internet". Well, perfecting remote work is just the beginning. The unplanned/sponteneous interactions that lead to new relationships also matter. Maybe when we get that soviet internet that browses you.
> I think neither S.V. nor the market is rational.
I agree, and it's possible general "bullshit jobs" and Q.E./softbank bubble type phenomena dwarf the intrinsic value of cities. But still, those are orthogonal effects. Contrary to most American nostalgia, going rural does not defeat the bullshit.
>cities matter.
>You might say "but...but...the internet". Well, perfecting remote work is just the beginning. The unplanned/sponteneous interactions that lead to new relationships also matte
Yes, I can totally get why anyone would pay a premium for someone who is physically present, or can be on relatively little notice.
But that only be relevant as far as "local or remote?", where the former gets a premium against the latter, and it shouldn't care about looking up the specific CoL of which remote location you're working from (so long as business hours are maintained). The issue is that location-based pay does do this.
>You might say "but...but...the internet". Well, perfecting remote work is just the beginning. The unplanned/sponteneous interactions that lead to new relationships also matte
Yes, I can totally get why anyone would pay a premium for someone who is physically present, or can be on relatively little notice.
But that only be relevant as far as "local or remote?", where the former gets a premium against the latter, and it shouldn't care about looking up the specific CoL of which remote location you're working from (so long as business hours are maintained). The issue is that location-based pay does do this.
Yeah a few years ago I was looking around at companies and had some interest in joining Gitlab. Then I saw their pay scale for Oakland and it was laughably low compared to SF even though that was all within my local job market.
Ultimately remote first companies that don’t do this will win the talent war and steadily push remote salaries up. Depending how successful they are it may also push major market salaries down over time.
Ultimately remote first companies that don’t do this will win the talent war and steadily push remote salaries up. Depending how successful they are it may also push major market salaries down over time.
I agree.
PP was asking about why SV pays so much more in the first place. That's a related question but with different variables fixed constant.
Indeed, it's very stupid to so discriminate between different locals. And it's not even clear this is in the employer's interests besides the higher order effects of dominating labor: in simplistic first-order modeling pay scales like this only hinder the arbitrage between different remote locations that are equivalent in the big corp's eyes.
PP was asking about why SV pays so much more in the first place. That's a related question but with different variables fixed constant.
Indeed, it's very stupid to so discriminate between different locals. And it's not even clear this is in the employer's interests besides the higher order effects of dominating labor: in simplistic first-order modeling pay scales like this only hinder the arbitrage between different remote locations that are equivalent in the big corp's eyes.
All the more reason to implement a land value tax, with additional taxes on speculation properties (say, lived in for less than 33% of the year), and on vacancy (blight tax).
Amen to that! Land is a public good, and density even more so.
What “enables” companies to pay more is profits, but what forces them to is the labor market. SV pays more because as an IC you can get a $150k job at thousands of other companies within commute distance.
Of course it is possible to set up a tech company elsewhere and have lower operating costs—there are plenty of examples—but that doesn’t it’s a slam dunk; remote work is a trade off that does not work for every person or company, and talent pools and ecosystems matter a great deal.
Of course it is possible to set up a tech company elsewhere and have lower operating costs—there are plenty of examples—but that doesn’t it’s a slam dunk; remote work is a trade off that does not work for every person or company, and talent pools and ecosystems matter a great deal.
It's kind of amazing how many people on this site don't understand the very simple economics of how salary is determined.
Right. It indicates that market forces aren’t benefitting labor as much as they could an extreme degree. What aspect of the market needs to be changed in order for everyone to benefit similarly? Clearly companies are making far more per worker than they’re paying out (at least in this case). Why is it so extreme?
> Why is it not possible to set up a similar company elsewhere which makes similar revenue and should be either insanely profitable or pay 150K and employees would become insanely rich as cost of living are lower.
There are two reasons why SV companies pay outrageous amounts.
1. Some companies have insane revenues. Google/Facebook lead the way but others are in this space as well. They can pay engineers huge amounts because they can afford it. These companies are rare and there aren't many outside of a few hubs.
2. Other companies run huge deficits and are funded by VCs. These companies pay huge amounts because their VCs want them to grow crazy fast and want them to hire top people, so they have to compete with the rich companies. The VCs are primarily located in a few hubs because they want to be able to physically stop in to their startups.
If a few companies weren't bringing in stupid high revenues, the entire HCOL compensation for the industry would collapse. It'd return to something closer to what we saw in 2005 before the rise of the megagiants with more money than God.
There are two reasons why SV companies pay outrageous amounts.
1. Some companies have insane revenues. Google/Facebook lead the way but others are in this space as well. They can pay engineers huge amounts because they can afford it. These companies are rare and there aren't many outside of a few hubs.
2. Other companies run huge deficits and are funded by VCs. These companies pay huge amounts because their VCs want them to grow crazy fast and want them to hire top people, so they have to compete with the rich companies. The VCs are primarily located in a few hubs because they want to be able to physically stop in to their startups.
If a few companies weren't bringing in stupid high revenues, the entire HCOL compensation for the industry would collapse. It'd return to something closer to what we saw in 2005 before the rise of the megagiants with more money than God.
> If a few companies weren't bringing in stupid high revenues, the entire HCOL compensation for the industry would collapse. It'd return to something closer to what we saw in 2005 before the rise of the megagiants with more money than God.
The companies I worked for in the 90s, well before goog or fb existed, had location-based salary tables.
There's nothing post-2005 about this.
The companies I worked for in the 90s, well before goog or fb existed, had location-based salary tables.
There's nothing post-2005 about this.
Location-based salary tables aren't new. But salaries that are 5x above the US median for software engineers are. We didn't have such a huge stratification in the past.
>Why is it not possible to set up a similar company elsewhere which makes similar revenue and should be either insanely profitable or pay 150K and employees would become insanely rich as cost of living are lower.
The canned answer is that SV provides easy access to capital and talent. These are rationale incentives, although they may be overvalued and this is changing.
Companies can absolutely pocket the difference. I know a SV CEO who is building out his software team in Pakistan because college educated programmers are paid $6/hr and the talent is adequate
The canned answer is that SV provides easy access to capital and talent. These are rationale incentives, although they may be overvalued and this is changing.
Companies can absolutely pocket the difference. I know a SV CEO who is building out his software team in Pakistan because college educated programmers are paid $6/hr and the talent is adequate
Apple has a gross revenue of $1.9 million per employee. Paying 150k is generally only a small fraction of the value they create and Apple could afford to pay more, and at the same time a better offer than anywhere else for many
It's like a black hole. The more dollars & developers you feed SV, the more gravity it has to suck in more dollars & developers, in an endless feedback loop.
If the supply of dollars was limited, it would never have reached such critical mass.
If the supply of dollars was limited, it would never have reached such critical mass.
Well, one reason that S.V. companies can pay more is that they earn more thanks to being in S.V. Once I've been visiting the mothership and took a bike to drive up/down the road. There have been offices of all kinds of companies I would've never heard about... Except I've seen so many of the logos on various things in the office a quarter world away. I imagine there's quite some value in having your engineers mingle with potential customer's engineers after work.
I do not want to debate the fairness of it, because it is way too complex for a comment.
But there is another downside of pay cuts for remote workers: A remote worker does not have access to the same market as someone living in a hot cluster like The Valley.
A real-world example from Europe: If I take my Berlin salary and live just 50km out of the city, I am easily one of the top-earners in that area. Naturally, I lose easy access to many offerings of that city, but that's part of the deal, I think. Now if I ever wish to switch employers, I can look in Berlin, but I am at a disadvantage if many companies insist on on-site work. If they don't, I compete on a much larger market with many more would-be employees. This problem should be reflected in payment, I think.
So from my, completely egocentric, perspective it would be ideal if companies demand on-site one or two days a week, so I can choose the best spot for living in a larger area, but still only compete in a limited market.
But there is another downside of pay cuts for remote workers: A remote worker does not have access to the same market as someone living in a hot cluster like The Valley.
A real-world example from Europe: If I take my Berlin salary and live just 50km out of the city, I am easily one of the top-earners in that area. Naturally, I lose easy access to many offerings of that city, but that's part of the deal, I think. Now if I ever wish to switch employers, I can look in Berlin, but I am at a disadvantage if many companies insist on on-site work. If they don't, I compete on a much larger market with many more would-be employees. This problem should be reflected in payment, I think.
So from my, completely egocentric, perspective it would be ideal if companies demand on-site one or two days a week, so I can choose the best spot for living in a larger area, but still only compete in a limited market.
>So from my, completely egocentric, perspective it would be ideal if companies demand on-site one or two days a week,
Pretty much all the surveys I see suggest that this will be the most common outcome. Maybe roughly 20% fully remote and 20% mostly back in the office. Though doubtless not uniform across companies. (I expect my company will tilt more towards remote given that we were relatively heavily remote pre-pandemic.) Which implies that most will probably remain in the orbit of a larger metro; many of the jobs aren't in the city anyway. And many people will want to stay accessible to a metro for other reasons.
I had about a 45 mile commute most non-travel days at one point for a while. (I did take the train some days.) It was pretty doable 1-2 days per week but wasn't sustainable on a daily basis.
Pretty much all the surveys I see suggest that this will be the most common outcome. Maybe roughly 20% fully remote and 20% mostly back in the office. Though doubtless not uniform across companies. (I expect my company will tilt more towards remote given that we were relatively heavily remote pre-pandemic.) Which implies that most will probably remain in the orbit of a larger metro; many of the jobs aren't in the city anyway. And many people will want to stay accessible to a metro for other reasons.
I had about a 45 mile commute most non-travel days at one point for a while. (I did take the train some days.) It was pretty doable 1-2 days per week but wasn't sustainable on a daily basis.
> Pretty much all the surveys I see suggest that this will be the most common outcome. Maybe roughly 20% fully remote and 20% mostly back in the office.
While intriguing as an employee, this seems very pricey as the employer. Office space is expensive. Is it worth the cost given the low utilization? Would you really miss out on an excellent employee who cannot come in the 20% of the days others come to the office? How intriguing is it gonna be to hire someone who works the same time zone, is equally qualified but only costs 30%?
While intriguing as an employee, this seems very pricey as the employer. Office space is expensive. Is it worth the cost given the low utilization? Would you really miss out on an excellent employee who cannot come in the 20% of the days others come to the office? How intriguing is it gonna be to hire someone who works the same time zone, is equally qualified but only costs 30%?
I'm applying to jobs now (in the UK) and I'm yet to speak to a single company that plans on a full return to the pre-pandemic normal. Everyone is either staying 100% remote indefinitely, or they're hoping to adopt a hybrid approach like what you describe.
It's a bad time to own city-centre commercial real estate.
It's a bad time to own city-centre commercial real estate.
For most people who have proven they can productively work remote, it's sort of a no-brainer. Even if they don't want to move to the mountains or otherwise go 100% remote, most people will at least want the flexibility to commute fewer days and spend some days at home/out-of-the-office for all sorts of reasons. (As well as more flexibility in how close they need to be to an office.)
This wasn't my experience. Most companies I talked to planned on having 1-2 days in the office per week. A few were planning on 100% remote.
I bet a lot aren't being open about how remote they will be also, to avoid putting people off.
I bet a lot aren't being open about how remote they will be also, to avoid putting people off.
I expect a lot of companies just don't really know how things are going to play out right now. So, unless you know that a position can be 100% remote for all time, the conservative thing to do is to basically say "You're going to have to live somewhere that allows you to commute in a couple of days a week." You don't want to put yourself in a position where you've told someone they can live anywhere in the country they want and then, in nine months, tell them "Just kidding. You need to move to London."
That doesn't contradict what I said. "Remote-first" was more common in my experience too than "100% remote".
Notably, the market is such that a skilled candidate going in and explicitly negotiating how remote they want to be has a good shot at getting it approved. At least if aiming for e.g. 80% remote.
It's also notable that now being someone with longer experience in working remote - especially managing remote teams - has suddenly become a very valuable skill.
It's also notable that now being someone with longer experience in working remote - especially managing remote teams - has suddenly become a very valuable skill.
> But there is another downside of pay cuts for remote workers: A remote worker does not have access to the same market as someone living in a hot cluster like The Valley.
It’s not another downside, it’s the very reason the employer can reduce pay. They are betting your supply and demand curves are moving in such a way that you will be willing to accept a lower price, because you won’t have a better option.
It’s not another downside, it’s the very reason the employer can reduce pay. They are betting your supply and demand curves are moving in such a way that you will be willing to accept a lower price, because you won’t have a better option.
Let me take it another step: Every reason that it's "rational" that remote workers are payed less, i.e. not just a stupid faux-rationilization of the labor market reaching a new equilibrium, is evidence that remote work is a failure.
A world of resort-town skilled works chained to their hegemon isn't just terrible for workers. It's a terribly inefficient market: a "sharded monopsony". The very unplanned interactions that allow hot-spot workers to change jobs is also a big reason cities are such dynamic economies in the first place.
A world of resort-town skilled works chained to their hegemon isn't just terrible for workers. It's a terribly inefficient market: a "sharded monopsony". The very unplanned interactions that allow hot-spot workers to change jobs is also a big reason cities are such dynamic economies in the first place.
On the other hand, if this kind of thing became commonplace, you'd have the advantage that companies could hire you for less.
OP asserts that we have no right to complain because other people have it worse... This is a logic fallacy known as the 'fallacy of relative privation.' It's faulty reasoning because its an infinite race to the bottom. Noooo: you can't complain about that because [...] and they in tern also cant complain because [...] until eventually you reach the last person on Earth who was born in infinite pain and suffering who can complain. It's just a very unrealistic model.
https://rationalwiki.org/wiki/Not_as_bad_as
OPs sweat shop metaphor is also a little far-fetched since they are comparing relatively unskilled workers with specialized tech workers (specialization commands a higher price based on limiting supply.) I think we have every right to complain about companies exploiting workers. They --already-- rely on a disparity of information in salary negotiations to manipulate prices in their favor. I think these practices and others are highly immoral and lead to people being paid far less than they're worth.
https://rationalwiki.org/wiki/Not_as_bad_as
OPs sweat shop metaphor is also a little far-fetched since they are comparing relatively unskilled workers with specialized tech workers (specialization commands a higher price based on limiting supply.) I think we have every right to complain about companies exploiting workers. They --already-- rely on a disparity of information in salary negotiations to manipulate prices in their favor. I think these practices and others are highly immoral and lead to people being paid far less than they're worth.
Great point about the logical fallacy.
The whole reason an "employee" exists is because they create more value than they cost. The only relevant factor is how much value they create (either in the form of eventual increased profits or eventual decreased costs)...location has absolutely nothing to do with that calculation. I.E. If a business could rent a money printing machine, the location of that machine doesn't matter....the only thing that matters is how much money it prints in relation to how much it costs to rent. Any argument from the business stating they should "rightfully" be charged less to rent the machine is merely a negotiation tactic intended to increase profits for the business owners.
If you work at a company that does this or is threatening to do this, I'd seriously consider making a move to one that takes the opposite approach. Any hint of this mindset from a company should be taken as a huge red flag.
The whole reason an "employee" exists is because they create more value than they cost. The only relevant factor is how much value they create (either in the form of eventual increased profits or eventual decreased costs)...location has absolutely nothing to do with that calculation. I.E. If a business could rent a money printing machine, the location of that machine doesn't matter....the only thing that matters is how much money it prints in relation to how much it costs to rent. Any argument from the business stating they should "rightfully" be charged less to rent the machine is merely a negotiation tactic intended to increase profits for the business owners.
If you work at a company that does this or is threatening to do this, I'd seriously consider making a move to one that takes the opposite approach. Any hint of this mindset from a company should be taken as a huge red flag.
> The only relevant factor is how much value they create (either in the form of eventual increased profits or eventual decreased costs)
Not true. Its a market. The upper bound on your pay is how much value you're expected to create. The lower bound is your breakeven point - where you're not sure if its worth going in to work or not.
The range in the middle is pure profit - its value created by your employment. If your income is close to your value to the company, you're capturing most of that profit in your pay packet. If your income is close to your breakeven point, your workplace is capturing most of the value of your employment. Where it lands is dependent on competition. If there's lots of capable software engineers and almost nobody hiring, then competition for jobs pushes wages down. If there's lots of jobs and not enough capable software engineers then competition for software engineers pushes our salaries up.
"Location based pay" assumes your employer is no longer competing with other SV-based software companies (because you don't live there). But your remote job is proof that you have remote work choices! And as more companies become remote-friendly, your company is competing for my time with all the other remote-friendly employers. (Which should push wages up). And employees are competing with everyone else who can apply for remote work (which is a larger pool of applicants).
Not true. Its a market. The upper bound on your pay is how much value you're expected to create. The lower bound is your breakeven point - where you're not sure if its worth going in to work or not.
The range in the middle is pure profit - its value created by your employment. If your income is close to your value to the company, you're capturing most of that profit in your pay packet. If your income is close to your breakeven point, your workplace is capturing most of the value of your employment. Where it lands is dependent on competition. If there's lots of capable software engineers and almost nobody hiring, then competition for jobs pushes wages down. If there's lots of jobs and not enough capable software engineers then competition for software engineers pushes our salaries up.
"Location based pay" assumes your employer is no longer competing with other SV-based software companies (because you don't live there). But your remote job is proof that you have remote work choices! And as more companies become remote-friendly, your company is competing for my time with all the other remote-friendly employers. (Which should push wages up). And employees are competing with everyone else who can apply for remote work (which is a larger pool of applicants).
> The lower bound is your breakeven point - where you're not sure if its worth going in to work or not.
This is conflating an irrelevant piece of data that has nothing to do with the business outside of them using it against you to negotiate lower pay. It doesn't make any sense to use this number in a "range" to calculate profit for a business.
Also, competing with SV-based companies is irrelevant as well since the same amount of competition exists currently. The amount of competition holds steady as long as the work-location flexibility offered across those companies is relative. And that's completely the choice of the business.
If I'm paying to rent a cash printing machine, I have no realistic claim to demand all cash printing machine renters charge me less because I all of a sudden decide to work with renters from other locations. Obviously, I may find other renters willing to accept less, but I have no claim to demand that renters immediately drop their rental rates.
This is conflating an irrelevant piece of data that has nothing to do with the business outside of them using it against you to negotiate lower pay. It doesn't make any sense to use this number in a "range" to calculate profit for a business.
Also, competing with SV-based companies is irrelevant as well since the same amount of competition exists currently. The amount of competition holds steady as long as the work-location flexibility offered across those companies is relative. And that's completely the choice of the business.
If I'm paying to rent a cash printing machine, I have no realistic claim to demand all cash printing machine renters charge me less because I all of a sudden decide to work with renters from other locations. Obviously, I may find other renters willing to accept less, but I have no claim to demand that renters immediately drop their rental rates.
I think a highly contributing factor in employment for that phenomenon is the employers themselves. Just as a company won't pay you what you're actually worth, you won't demand what you're actually worth. You as an employee will usually demand what you need to afford the things you want. If you live in India, the money needed for that is probably less. If you live in SF, the money needed for that is much more. An employee doesn't negotiate thinking about their true worth to the company. They negotiate thinking about what they need to survive comfortably in their current location. At least, this is on average.
One side needs to change their way of negotiating before this becomes equal.
One side needs to change their way of negotiating before this becomes equal.
Think the programming talent pool is increasingly getting split into run-of-the-mill and superstar developers.
The location based pay argument depends on if you're an average or superstar employee.
Average employees (e.g. building CRUD websites) will get location based pay because that's what the market dictates.
Superstar employees, people that are unique on the global scale, will get superstar pay, regardless of location. In the Spark world, there are few people that are able to understand the source code, optimize Catalyst plans, write huge data processing pipelines, etc. These types of employees won't see location pay adjustments.
Basecamp pays superstar rates for superstar employees.
Factory workers that perform "routine functions" earn location based wages.
The location based pay argument depends on if you're an average or superstar employee.
Average employees (e.g. building CRUD websites) will get location based pay because that's what the market dictates.
Superstar employees, people that are unique on the global scale, will get superstar pay, regardless of location. In the Spark world, there are few people that are able to understand the source code, optimize Catalyst plans, write huge data processing pipelines, etc. These types of employees won't see location pay adjustments.
Basecamp pays superstar rates for superstar employees.
Factory workers that perform "routine functions" earn location based wages.
Yes, I feel pay for developers is going to become more bimodal as time goes on; similar to lawyer compensation.
Yep, agreed. Here's an article for the bimodal nature of starting salaries for lawyers for interested parties: https://www.biglawinvestor.com/bimodal-salary-distribution-c...
The upper end of the biglaw salaries was capped because of an unspoken "cartel pricing cap". Big law firms don't want to compete for the upper-echelon talent.
Not sure if tech companies will be able to informally collude in such a manner to cap the upper end of the bimodal curve.
The upper end of the biglaw salaries was capped because of an unspoken "cartel pricing cap". Big law firms don't want to compete for the upper-echelon talent.
Not sure if tech companies will be able to informally collude in such a manner to cap the upper end of the bimodal curve.
They have before[1]. I think one reason salaries started to climb so much recently in silicon valley was because this collusion to suppress salaries ended.
[1]https://www.cnet.com/news/apple-google-others-settle-anti-po...
[1]https://www.cnet.com/news/apple-google-others-settle-anti-po...
BigLaw is getting squeezed by its clients. There are increasing numbers of companies that don’t want to pay hundreds of dollars an hour for fresh grads no matter how bright. That leaves law firms with the choice of either subsidizing young associates, which is dangerous given the competition for top partners, or finding some way to cut pay. While few have wanted to break away from marquee associate pay, the quiet rise of staff attorneys at BigLaw represents the breakdown of the bimodal system.
I know a relatively new lawyer that moved from a top law firm in NYC to a tech firm on the west coast and got a huge increase in pay, especially per hour worked.
Getting a rise per hour worked in law by leaving the big law firms is often "easy". My ex worked for one of the top lawfirms in London, and quickly realised their very high headline pay (straight out of uni into ~2x median UK pay, and increasing at far above average rates for 10+ years) gave the new graduates lower per-hour pay than their secretaries.
It was basically a death-march to see who'd stick it out long enough. Only a few would make partner anyway, so they needed to shed a lot of people to make their cost structure work, and so they'd work them into the ground and use who stays as the selection method at the lower end.
It was basically a death-march to see who'd stick it out long enough. Only a few would make partner anyway, so they needed to shed a lot of people to make their cost structure work, and so they'd work them into the ground and use who stays as the selection method at the lower end.
In case anyone want to read more about this, that employment structure is called the “tournament model”.
It was a raise by absolute value also, not just per hour. Added bonus of no income tax in Washington.
This is fascinating. I wonder if doctors and engineers and other knowledge-based professions have a similar distribution if you look hard enough.
[deleted]
It's not working like that; there is no committee deciding your fair pay based on your technical prowess.
It's all down to how well you are able to market yourself. Granted possessing actual competence makes that easier, but really, the world is full of competent, smart but not particularly pushy people who get ripped off.
It's all down to how well you are able to market yourself. Granted possessing actual competence makes that easier, but really, the world is full of competent, smart but not particularly pushy people who get ripped off.
I agree, the free market decides your wage no only on technical prowess, but also your "influencer score" and your personality traits.
Technically savvy folks with a low influencer score may get paid less.
Technically savvy folks who do not negotiate well may get paid less.
The modern market rewards folks based on their "basked of skills".
Technically savvy folks with a low influencer score may get paid less.
Technically savvy folks who do not negotiate well may get paid less.
The modern market rewards folks based on their "basked of skills".
The limited empirical data I've seen shows the idea of superstar programmer in terms of efficiency may be a facade, unless superstar is a 1.5-2x efficiency developer (the slides are concise, there's a corresponding paper published I can't seem to find this morning):
https://resources.sei.cmu.edu/library/asset-view.cfm?assetid...
https://resources.sei.cmu.edu/library/asset-view.cfm?assetid...
> For routine tasks, professional programmers have a narrower range of productivity than we first supposed, but almost half of the variation in individual productivity is noise, making programmer rankings suspect.
> Focus only on Programming Effort (limit the scope)
> This is for small programs that should not exceed normal capability
Yes, when you eliminate most of the sources of variation, there is a lot less variation. The most efficient developers aren't more efficient because they churn out boilerplate code faster.
> Focus only on Programming Effort (limit the scope)
> This is for small programs that should not exceed normal capability
Yes, when you eliminate most of the sources of variation, there is a lot less variation. The most efficient developers aren't more efficient because they churn out boilerplate code faster.
Top talent in big tech are not working as programmers. They work as engineers. They often do a limited amount of actual programming, most of the contribution is leadership, design and architecture.
I agree completely, I think this is really the distinction that is lacking when people talk about superstar developers. Most aren't developing much of anything in terms of raw implementation, they're redesigning existing architectures, theorizing new approaches, bridging domains, etc.
Those skills are often tied to specific domains that are not quickly transferable so what talented engineer A does efficiently or makes them a superstar is specific to engineer A. Talented engineer B probably does something a bit different or has their own sets of expertise they're superstars at.
There are a lot of misguided organizations hiring on the wrong premise though, that there are developers who just churn out implementations at 10-100x speed so they can reduce their workforce. What they should focus on is engineering talent that makes sure they're tackling the correct problems and focus on the right solutions to those problems as opposed to something silly like developer velocity.
Those skills are often tied to specific domains that are not quickly transferable so what talented engineer A does efficiently or makes them a superstar is specific to engineer A. Talented engineer B probably does something a bit different or has their own sets of expertise they're superstars at.
There are a lot of misguided organizations hiring on the wrong premise though, that there are developers who just churn out implementations at 10-100x speed so they can reduce their workforce. What they should focus on is engineering talent that makes sure they're tackling the correct problems and focus on the right solutions to those problems as opposed to something silly like developer velocity.
You explained the fundamental philosophical divide in software development today. One group sees development as a process of production. They still think of developers as people who produce code. The other group sees software development as a process of problem discovery and definition. Programming is an exploratory learning process that, at its best, refines and condenses human concepts and symbols into concrete representations automated by a computer. In my opinion the latter group will always outperform the former (barring massive resource discrepancies) because they have a more powerful theoretical grip on their activities.
A great design/architect will mean you need to write 1/10th as much code.
Well, not really but maybe 1/2
Well, not really but maybe 1/2
Dominique Brezinski's latest Spark Summit talk is what cemented my feeling that superstar economics are at play in the current marketplace (in certain fields): https://databricks.com/session_na20/patterns-and-operational...
He talks about the data processing framework he built that's ingesting "hundreds of terabytes, approaching a petabyte a day".
New technologies let small teams do tons of work.
He talks about the data processing framework he built that's ingesting "hundreds of terabytes, approaching a petabyte a day".
New technologies let small teams do tons of work.
Quite. 10 fresh graduates of the University of North Central Tennessee’s CS program are capable of doing a better job of anything in the CS realm than Notch, Jeff Dean or Linus Torvalds.
While Jeff is a great programer, writing code has not been his primary contribution at Google.
I highly doubt that for Dean and Torvalds. They are not programmers, they are software engineers. Both guide others to make 10x or 100x impacts to the world. 10 new grads, in most cases, cannot do that. Let alone this takes for granted both of their algorithms and data structures knowladge.
When you have multiple people, there's an increasing amount of overhead, from communication, from coordination, needing someone to manage and lead. Now if a single person is able to do the work of multiple people, or even more so multiple people from different disciplines and different teams, then you are gaining much more efficiency. Because you've now replaced 4 people, and then you're moving 4x faster than those 4 people were working together, because there's no overhead required. So now it's actually a 16x speedup. In the same time that it took someone to schedule a meeting with the other team's manager to ask for resources to prioritize time in the next sprint, for someone to review the design and then help out, your superstar already did the whole thing herself after lunch.
> Think the programming talent pool is increasingly getting split into run-of-the-mill and superstar developers.
That doesn't conform to my experience (European / working in the industrial sector / hiring developers but not a developer anymore myself) at all.
Pay is mostly based on the sector you work in and the origin of the company you work for. You will have an incredible salary if you work for an American web company especially a big one. You will have a fairly good salary in finance which might become an extremely good salary the closer you get to trading. Meanwhile, some of the guys working with me were experts in sensors fusion, embedded development and highly available systems with decades of experience and were paid peanuts (that was in the defense industry). They all stayed out of a mix of loyalty and the conviction they wouldn't find something as interesting somewhere else (probably right founded from what I have seen).
That doesn't conform to my experience (European / working in the industrial sector / hiring developers but not a developer anymore myself) at all.
Pay is mostly based on the sector you work in and the origin of the company you work for. You will have an incredible salary if you work for an American web company especially a big one. You will have a fairly good salary in finance which might become an extremely good salary the closer you get to trading. Meanwhile, some of the guys working with me were experts in sensors fusion, embedded development and highly available systems with decades of experience and were paid peanuts (that was in the defense industry). They all stayed out of a mix of loyalty and the conviction they wouldn't find something as interesting somewhere else (probably right founded from what I have seen).
I wanna upvote this so many times. I used to work in geointelligence surrounded by some of the world's smartest people doing some of the most amazing work I will ever see. We were doing things with pixel data that Google is still at least a decade away from, and the efficiency of the ground processing ingest systems were so insane that when the government tried to give the contract to someone else, it took their software 21+ days to do what we could do in minutes. But it took decades of fine tuning to get to that point, physicists and mathematicians working in close concert with engineers who understood hardware, software, and orbital mechanics equally well.
Meanwhile, I left and am now making double, in some cases triple, what some of my old coworkers are making, all because I'm in a hotter industry infused with VC cash, not because I'm any better.
And I absolutely miss it and understand why some of those people don't leave. The problems you get to work on and the access to classified data and close collaboration with so many world class research laboratories is unmatched. You'll never get that level of intellectual engagement working for a web company until you're in one of the handful of moonshot programs staffed by PhDs, but you will get money, so I chose money.
Meanwhile, I left and am now making double, in some cases triple, what some of my old coworkers are making, all because I'm in a hotter industry infused with VC cash, not because I'm any better.
And I absolutely miss it and understand why some of those people don't leave. The problems you get to work on and the access to classified data and close collaboration with so many world class research laboratories is unmatched. You'll never get that level of intellectual engagement working for a web company until you're in one of the handful of moonshot programs staffed by PhDs, but you will get money, so I chose money.
This does not correlate to my experience working in Los Angeles and Silicon Valley. SV programmers get paid very well, as well as programmers working in L.A. for Google or Facebook. However, among those high paid programmers there were some really high performers and a lot of people who were good but really just like the people who were just getting paid much less somewhere else. One thing was always true, once someone got a really big pay check they were quite convinced that their work was very special.
While the work at your previous employer sounds really cutting edge, how profitable were they?
There also seem to be some areas where highly skilled workers will take a pay cut to work on something they love. This of course leads to lower pay in that field. A common example is the video game industry.
Your previous job sounds like it might have been affected by both lack of a money printer and lots of folks who take lower salary because they love the work
There also seem to be some areas where highly skilled workers will take a pay cut to work on something they love. This of course leads to lower pay in that field. A common example is the video game industry.
Your previous job sounds like it might have been affected by both lack of a money printer and lots of folks who take lower salary because they love the work
As you might imagine, working on a classified program means you're working for the government, so your company's profitability is inherently a function of the lowest bid mechanism for contracting - to an extent, as we proved they can't just costlessly switch to the cheapest bid unless they want a system that doesn't actually work. It's maybe counterintuitive, as the federal government is the only employer that literally does have the ability to print money, but in practice, even though they often face and solve problems far more complex than any faced by industry, it is often not a money-making endeavor.
Specifically, the point of geointelligence is we're trying to gain a long-term strategic advantage over all other enemy and competitor countries. To the extent we succeed at doing this, the government itself doesn't earn a profit from it. Everyone else does. We try to tax them in order to pay ourselves, but people don't like taxes and they frankly don't understand the ways in which spycraft is benefiting them because all that ever gets publicized are our failures. When what we do works, you never hear about it.
Specifically, the point of geointelligence is we're trying to gain a long-term strategic advantage over all other enemy and competitor countries. To the extent we succeed at doing this, the government itself doesn't earn a profit from it. Everyone else does. We try to tax them in order to pay ourselves, but people don't like taxes and they frankly don't understand the ways in which spycraft is benefiting them because all that ever gets publicized are our failures. When what we do works, you never hear about it.
I work at an engineering firm and that is so true. All the schooling and a professional engineering (PE) certification that if a mistake is made with your stamp on it results in you personally not being able to practice for a long time or never again. I see these young, brilliant engineers working on really cool stuff that I also work on, but I am not an engineer. I am self-taught, never finished my physics degree, and went and did whatever job struck my fancy: welder, machinist, IT (been coding since 1978 on Commodore PET 2000), project management, museum art handler, underwater hydraulics and electrical work (senior manager at a water show in SE Asia), ropework (just did a 300 foot drop inspecting a facade, and I am 56 now), entertainment engineering, owned my own design/build shop doing animations, displays, events, stage, TV, etc., 3D work in Prisms (now Houdini), etc... I followed my bliss as J. Campbell would say. Yes, sometimes I was earning way lower than my potential, but I gained knowledge and experience. Besides, I have been making a very good salary starting about 15 years ago. COVID has pushed me to setup a smaller version of the rapid-prototyping, mechatronics, design/build setup I once had, except now on a desktop scale as a side interest, hobby, and potential income earner. I know why the others stayed at your company. I had offers for silly money overseas, but when I saw it was a bunch of networked, low-producing, cocktail-party chameleons who I could not learn from, or enjoy their company, I passed. Life's short. Do what fulfills you and still supports you and your family. Your needs adjust when you are happy!
HN has a very strong web bias, so that comment is likely only looking at that kind of work. Here in Midwestern US, I see the same stratification that you do.
I absolutely disagree, the pool of superstar/senior devs is tiny. The vast majority of devs that are past junior are mid-level, don't let the job title fool you
I'd say superstar is probably 10 years minimum of experience. And even then it doesn't just come to a person. Most will forever be mid and that is ok
I'd say superstar is probably 10 years minimum of experience. And even then it doesn't just come to a person. Most will forever be mid and that is ok
Seems like you're equating superstar developers with years of experience and that hasn't been my observation. PyTorch was created by an undergrad. I've worked with senior devs that have let engineering pass them by and are now the equivalent of non-programming programmers: https://blog.codinghorror.com/the-nonprogramming-programmer/
I agree that the pool of superstar devs is tiny.
I agree that the pool of superstar devs is tiny.
As a data point, in big tech the Sr staff (L7 at G/FB) and higher is no more then 2% if ICs.
For anyone confused, “senior staff” is L7 and rare but “senior” is L5 and usually a majority of SWEs.
I didnt say years of experience is equal to status
But it sure as hell takes years of experience to achieve certain status
But it sure as hell takes years of experience to achieve certain status
It takes building and shipping an outstanding product to achieve certain status, if we’re talking about “superstar“ status. This has almost nothing to do with years of experience. I’d even say most superstar devs achieved it pretty early in their career.
It absolutely does take years to achieve that. Most people that think they are superstar are really just mediocre mis with an ego.
I doubt there are many superstars under the age of 28 minimum
I doubt there are many superstars under the age of 28 minimum
> Think the programming talent pool is increasingly getting split into run-of-the-mill and superstar developers.
Absolutely bullshit also designed to turn workers against each other to the ownership class's benefit.
We live and die by the quality of each other's abstractions. If everyone is writing shit, I can go it alone 1980s nolstagia style, or swim in molasses. If everyone else is writing excellent libraries, I am flying with a jet pack.
There is definitely attempts with certain bootcamps, anti-intellectual languages like Go, to beat programmers into submission. The "superstars" may do fine in the short term, but will not survive this trend long term.
Absolutely bullshit also designed to turn workers against each other to the ownership class's benefit.
We live and die by the quality of each other's abstractions. If everyone is writing shit, I can go it alone 1980s nolstagia style, or swim in molasses. If everyone else is writing excellent libraries, I am flying with a jet pack.
There is definitely attempts with certain bootcamps, anti-intellectual languages like Go, to beat programmers into submission. The "superstars" may do fine in the short term, but will not survive this trend long term.
> anti-intellectual languages like Go
Meaning...?
I generally agree with your class argument but don't see how Go fits into it, nor what an "intellectual" language would be.
Meaning...?
I generally agree with your class argument but don't see how Go fits into it, nor what an "intellectual" language would be.
Perhaps they thought the lack of memory management options in Go is anti-intellectual?
I'm not a huge fan of Go (more of a Python/Rust person--to promote my bias) but I can't think of how it would be "anti-intellectual" (either). The statement was way out of place.
I'm not a huge fan of Go (more of a Python/Rust person--to promote my bias) but I can't think of how it would be "anti-intellectual" (either). The statement was way out of place.
Ignoring prior art, like generic types until 10 years later. Basically it's the evolution of java repeated; the second time is farce.
There are large questions of trade offs, how are we measuring value? Run-of-the-mill works best when things are well understood and stable. Superstar is needed when things get unpredictable and stop working unexpectedly. Think of the large number of JS frameworks which have come and gone over the past decade. Microsoft's .net4 -> core -> .net5
How can we tie compensation to ownership?
We've seen software die as the abstraction falls into disrepair. There's a huge numbers of frameworks to try and solve this, WINE, Dosbox, SCUMMVM, Dolphin.
Flying with a Jetpack is great until it runs out of fuel
How can we tie compensation to ownership?
We've seen software die as the abstraction falls into disrepair. There's a huge numbers of frameworks to try and solve this, WINE, Dosbox, SCUMMVM, Dolphin.
Flying with a Jetpack is great until it runs out of fuel
[deleted]
A bit off topic, but how does a university student distinguish themselves as a good developer? I have projects I think are interesting on my GitHub and I've worked three internships while in Uni, but how can I make sure I stand out during the job hunt (currently in my last semester) while I'm competing against some of my classmates that didn't know the equality operator could be used outside of an if statement (a real example)?
There is a bit of a marketing element to it as well. You have present yourself as the perfect candidate based on your experience.
Let the employer know how much you want the job. Know the details about the company. Practice answers to questions. Treat this like you’re training to win the US Open. You would be surprised how little effort most people out into preparing.
Also keep in mind that you won’t get every job you apply for and it might not even be your fault. When hiring managers are building a team they may be looking for a specific “personality or subtype” to fill out the team. Where If they had multiple head counts they would probably hire you but are holding out for the perfect fit.
Let the employer know how much you want the job. Know the details about the company. Practice answers to questions. Treat this like you’re training to win the US Open. You would be surprised how little effort most people out into preparing.
Also keep in mind that you won’t get every job you apply for and it might not even be your fault. When hiring managers are building a team they may be looking for a specific “personality or subtype” to fill out the team. Where If they had multiple head counts they would probably hire you but are holding out for the perfect fit.
What I did: Post on HN who wants to be hired, work at a small startup for a while, be a driving force between positive change.
My first job was 50k/year and I lost money just by getting to work (gas, fees, parking, etc). Told my boss and in 6 months I got a >50% raise to 80k/year + stocks + parking space.
Next job was 120k + stocks + remote for a company in the valley.
Each job hop will net you a pay increase similar to this. It'll also give you new perspective on software engineering.
My email is in my profile if you want to discuss in more detail!
My first job was 50k/year and I lost money just by getting to work (gas, fees, parking, etc). Told my boss and in 6 months I got a >50% raise to 80k/year + stocks + parking space.
Next job was 120k + stocks + remote for a company in the valley.
Each job hop will net you a pay increase similar to this. It'll also give you new perspective on software engineering.
My email is in my profile if you want to discuss in more detail!
"Game recognizes game."
People who are really good can recognize each other.
At some point in the interview process they'll sit you down in the room with a couple of their other really good people, you'll "grok" each other and be hired. (If that never happens, decline the offer, they have no one and no clue.)
People who are really good can recognize each other.
At some point in the interview process they'll sit you down in the room with a couple of their other really good people, you'll "grok" each other and be hired. (If that never happens, decline the offer, they have no one and no clue.)
No-one expects a fresh college grad to be a rockstar dev. The few places that do, probably have highly specialized recruitment pipelines, and look for people with the "correct" features and milestones, like monitoring people that have participated in math / informatics olympiads, that have gone to the "correct" schools, and have been mentored by important figures.
Those places are rare. But for the majority, my tip would be:
- Get comfortable with a couple of languages, learn good style, and get familiar with the toolkit.
- Learn the fundamentals of CS.
- Commit to some side projects.
- Seek out internships/work experience
- Do fairly well in school.
- Learn teamwork and soft skills.
I don't think any single/individual point above is enough to signal "awesome developer", but the sum of them will surely correlate with high potential.
Those places are rare. But for the majority, my tip would be:
- Get comfortable with a couple of languages, learn good style, and get familiar with the toolkit.
- Learn the fundamentals of CS.
- Commit to some side projects.
- Seek out internships/work experience
- Do fairly well in school.
- Learn teamwork and soft skills.
I don't think any single/individual point above is enough to signal "awesome developer", but the sum of them will surely correlate with high potential.
I work for a much smaller company now than I did a few years ago, so I'm interviewing at a much lower rate. That said, if you have a single project on Github and can discusss it intelligently, you are already head and shoulders above the vast majority of people I've interviewed over the last 20 years.
You need to demonstrate that you understand and can modify code in real project. Many programmers are code illiterates, job interview is all about filtering them out.
Small trivial projects on github profile do not count for much. Contributions to some established OS project are great.
Small trivial projects on github profile do not count for much. Contributions to some established OS project are great.
I stood out by taking part in my uni's Formula Student group and wrote safety-critical code for the car. This enabled me to find an interesting job straight out of uni where my code would be deployed to millions of cars around the world.
Companies have no business telling me how much they think my life should cost nor how I should spend my money. If they're paying "lifestyle" choices, based on bullshit cost of living make believe metrics, they should reward my lifestyle choice to travel constantly and pay that cost of living accordingly.
I'm not surprised tho, remote work is still an embryo, I'm gonna keep pushing for what I want but we can't expect too much.
When I'm rich and successful I'm gonna pay a standard global rate for the each role. No bullshit country adjustments. The market will just have to eat it
I'm not surprised tho, remote work is still an embryo, I'm gonna keep pushing for what I want but we can't expect too much.
When I'm rich and successful I'm gonna pay a standard global rate for the each role. No bullshit country adjustments. The market will just have to eat it
Markets are two-sided. If you pay a single, global rate, you may find yourself setting that rate such that you’re priced out of certain markets and lack access to money-motivated talent there.
You will be part of the market that’s eating it.
You will be part of the market that’s eating it.
> Markets are two-sided. If you pay a single, global rate, you may find yourself setting that rate such that you’re priced out of certain markets and lack access to money-motivated talent there.
Except for differences imposed by differential transaction costs, freely competitive markets have one price for a given good. If there's not a single, global rate for a nondifferentiated good, it means it's not a competitive market and a cartel or monopolist is imposing segmentation.
If there's some places where the supply (in the economic sense of the function relating price and quantity delivered) is restricted so nothing is delivered at the global market clearing rate, then that place just isn't a source of the good.
The benefit of segmentation for buyers isn't that they get to avoid being priced out of markets where you pay more for the same service, it's that imposing segmentation lets you reduce the price you pay to suppliers in low-cost regions to a level below the global market clearing price.
Except for differences imposed by differential transaction costs, freely competitive markets have one price for a given good. If there's not a single, global rate for a nondifferentiated good, it means it's not a competitive market and a cartel or monopolist is imposing segmentation.
If there's some places where the supply (in the economic sense of the function relating price and quantity delivered) is restricted so nothing is delivered at the global market clearing rate, then that place just isn't a source of the good.
The benefit of segmentation for buyers isn't that they get to avoid being priced out of markets where you pay more for the same service, it's that imposing segmentation lets you reduce the price you pay to suppliers in low-cost regions to a level below the global market clearing price.
> If there's not a single, global rate for a nondifferentiated good, it means it's not a competitive market and a cartel or monopolist is imposing segmentation.
Much of the work of product development and marketing is creating differentiation (real and perceived). Is a Mercedes E-class different from Toyota Camry? Is 90% lean ground beef from Whole Foods different from 90% at Trader Joe’s?
Is economy class 21-day advance, Saturday night stay required travel different from a walk-up ticket out Tuesday back the same Thursday?
Much of the work of product development and marketing is creating differentiation (real and perceived). Is a Mercedes E-class different from Toyota Camry? Is 90% lean ground beef from Whole Foods different from 90% at Trader Joe’s?
Is economy class 21-day advance, Saturday night stay required travel different from a walk-up ticket out Tuesday back the same Thursday?
> Much of the work of product development and marketing is creating differentiation
Sure, and that's definitely an important phenomenon, but it is not really germane to hiring for a role and paying differently for the exact same role depending on where the successful applicant lives.
Sure, and that's definitely an important phenomenon, but it is not really germane to hiring for a role and paying differently for the exact same role depending on where the successful applicant lives.
> Is a Mercedes E-class different from Toyota Camry?
For this example, obviously they are different. The job of marketing is to justify the difference in price for whatever differences the Mercedes offers.
> Is economy class 21-day advance, Saturday night stay required travel different from a walk-up ticket out Tuesday back the same Thursday?
Yes, for the seller, guaranteed payment 21 days before is different than a volatile payment minutes before the goods expire.
For this example, obviously they are different. The job of marketing is to justify the difference in price for whatever differences the Mercedes offers.
> Is economy class 21-day advance, Saturday night stay required travel different from a walk-up ticket out Tuesday back the same Thursday?
Yes, for the seller, guaranteed payment 21 days before is different than a volatile payment minutes before the goods expire.
> If there's not a single, global rate for a nondifferentiated good
I would say that software engineering labor is extremely differentiated?
I would say that software engineering labor is extremely differentiated?
This is fascinating. Where can I read more to learn more about how to think about economics like you?
Any Economics textbook. Here are two good, free, technically demanding ones. Friedman’s is less demanding in terms of Mathematics than McCloskey’s.
https://www.deirdremccloskey.com/docs/price.pdf
http://www.daviddfriedman.com/Academic/Price_Theory/Price%20...
https://www.deirdremccloskey.com/docs/price.pdf
http://www.daviddfriedman.com/Academic/Price_Theory/Price%20...
Hahaha thanks. I'm not smart enough to consider second order effects at this point. It's more of a personal crusade that I know is right so I'll just have to do it see what happens .
What will happen, unless your product is unique, in high demand, and has a large moat, is your customers will purchase from a competitor selling goods at a cheaper price. See what happened to US textile and manufacturing industry.
I suppose I'm idealistic to think that paying people more (what I think of as) fairly will better motivate them retain them and lead to better productivity. And also we'll be able to attract better people everywhere to produce better product. I could be wrong. Sad if so, but it's worth a try
Motivation is a complex topic to be sure. An argument that has always resonated with me (and I bring up mostly to see if we can find a good rebuttal here) is that if I’m paying someone wildly more than their second-best alternative, they are in part motivated (to keep the gravy train rolling) and in part trapped (“I better learn to deal with this, because I can’t go anywhere else without massive sacrifice for my family”).
The latter can lead to “I’ll quit mentally but not actually” which is horrible for all parties. (I’m not saying that’s an excuse to underpay people “for their own good”, but I think anchoring pay to an employee’s actual market makes some non-zero amount of sense.)
The latter can lead to “I’ll quit mentally but not actually” which is horrible for all parties. (I’m not saying that’s an excuse to underpay people “for their own good”, but I think anchoring pay to an employee’s actual market makes some non-zero amount of sense.)
> An argument that has always resonated with me (and I bring up mostly to see if we can find a good rebuttal here) is that if I’m paying someone wildly more than their second-best alternative, they are in part motivated (to keep the gravy train rolling) and in part trapped (“I better learn to deal with this, because I can’t go anywhere else without massive sacrifice for my family”).
The rebuttal to this argument is that if you’re selling a commodity product, then you’re going to get steamrolled when Walmart/Amazon/Aliexpress/Multinational company comes rolling through and offers a comparable option to your product at 50% less by arbitraging labor costs.
The rebuttal to this argument is that if you’re selling a commodity product, then you’re going to get steamrolled when Walmart/Amazon/Aliexpress/Multinational company comes rolling through and offers a comparable option to your product at 50% less by arbitraging labor costs.
I agree with that observation. I don’t understand how that rebuts the presumption that I should pay market wages to avoid trapping overpaid employees in jobs they don’t find fulfilling.
Oh, I thought you meant a rebuttal to your first paragraph, to which I would say you wouldn’t survive as a business.
I don’t know anything about trapping people in a job they don’t like with a high wage.
I don’t know anything about trapping people in a job they don’t like with a high wage.
It probably depends on what their intrinsic motivation related to the job is. Do they find it fun, mentally challenging (in a good way), etc,? If they're motivated in that way, the extrinsic motivation of above-market pay is probably a good thing. But if that's their only motivation and they'd rather be anywhere else if it weren't for the money, that's a negative.
100% agreed. My hypothesis (previously unstated) is that some slice of people who start out in the first bucket inevitably turn into the second bucket. (They get bored of "doing the same old thing" or they "just want a change".)
All of the things you posit do occur. Costco employees are better, and better paid, than Walmart employees. That doesn’t mean both firms can’t exist in something close to the same market niche. And Costco’s strategy is not infinitely scalable. Paying more gets you better employees. It doesn’t automatically get you more profit.
There's a few segments of the customer market that will pay varying premiums for more customer service/quality, but only so much. Costco exists only in areas with above median wage shoppers, and can afford to exist by offering a limited selection of items sold in bulk. Similarly, a handful of retailers can afford to exist in this market, such as Trader Joes/Nordstrom/Apple/REI/etc, but most consumers are fairly price conscious and won't hesitate to shop elsewhere that offers lower prices. Or they can't afford the premiums for these places in the first place.
[deleted]
There is decades of data and sound reasoning to show what has, does, and will happen if arbitrage opportunities exist.
It’s no different than purchasing groceries from store A because they are cheaper than store B.
Paying people extra does not necessarily produce better product, at least not better enough to offset the extra costs.
If the goal is to give people a better life by giving them more money, that is better solved via wealth redistribution.
It’s no different than purchasing groceries from store A because they are cheaper than store B.
Paying people extra does not necessarily produce better product, at least not better enough to offset the extra costs.
If the goal is to give people a better life by giving them more money, that is better solved via wealth redistribution.
> If they're paying "lifestyle" choices, based on bullshit cost of living make believe metrics, they should reward my lifestyle choice to travel constantly and pay that cost of living accordingly.
Why not ask them to? Companies pay for people to get things like masters degrees all the time.
Why not ask them to? Companies pay for people to get things like masters degrees all the time.
you can do it, my current single contract pays 325k, and i'm just doing jquery(much to my dismay) and C# for it, all remote... been doin it for almost 3 years now. I live in a not very popoulated area . I've learned that there are plenty of very high paying jobs with a low bar..the things people go through to work for these big companies for such little pay and having to live in cities blows my mind. The best part is my current job leaves me lots of time for sidework to and to get experience in technologies i prefer to use.
Good for you ! But your situation seems to me to be quite extraordinary.
Hey, where are you sourcing these? Reach out to me: reverse ('ef7sirc') on outlook
This just means (at least) one of three things:
- you're making this up, and have no conception of what you'd do
- you won't be able to hire people from places where the cost of living is high, as your global rate will be lower than competitive salaries there
- you won't survive, as your competitors who do location-based salaries will be able to offer your customers more value for the same price, or same value for less price
You pick :)
- you're making this up, and have no conception of what you'd do
- you won't be able to hire people from places where the cost of living is high, as your global rate will be lower than competitive salaries there
- you won't survive, as your competitors who do location-based salaries will be able to offer your customers more value for the same price, or same value for less price
You pick :)
Even across the US, it's hard. Basecamp is an outlier.
Now, in practice, a fair number of companies probably don't have large systematic salary adjustments by US location, including remote generally. But they mostly do it by just not paying market rates in the highest paying markets like the Bay Area and, especially, not going toe-to-toe with the likes of Google and Facebook.
Now, in practice, a fair number of companies probably don't have large systematic salary adjustments by US location, including remote generally. But they mostly do it by just not paying market rates in the highest paying markets like the Bay Area and, especially, not going toe-to-toe with the likes of Google and Facebook.
I hope you are irreplaceable then because they are paying you based on a) how many people are competing for your job and b) how many other companies are competing for your skill set. If you are fully remote then you are competing with at least as many skilled people as are in your time zone and at most the number of skilled people in the world that speak the same language both of which are a huge increase over the number of skilled people in your metro area. The number of companies competing to hire you will also have gone up but I doubt it is on the same scale.
The author argues against fair and equal salaries because… T-shirts made in Bangladesh might become more expensive? Because people in foreign nations might be paid more? This feels very similar to the common arguments against raising the minimum wage, and I really don’t buy it.
I didn't read it as arguing against or for anything. Rather, I read it as "I really want <this>; extended to its logical conclusion, that would also suggest <this> which I don't want. Conundrum!"
It even says at the end, "I’m not here to make any grand pronouncements about globalisation… My only point is that, when it comes to “location-based pay”, maybe we should be careful what we wish for." I take that as a pretty explicit "hey, this is difficult and I don't have a good answer".
It even says at the end, "I’m not here to make any grand pronouncements about globalisation… My only point is that, when it comes to “location-based pay”, maybe we should be careful what we wish for." I take that as a pretty explicit "hey, this is difficult and I don't have a good answer".
The value of a T-Shirt is pretty low and manual labor can only produce a few T-shirts per hour. That forces T-Shirt production to go to low cost labor countries. If you could somehow train those workers to produce 10x as many T-Shirts they would also get paid 10x as much.
There simply isn't enough value to pay them more. Software is the opposite. Each worker produces a lot of value so companies can afford to pay them more.
A few decades ago western countries were worried that Japan would take over the electronics market because they could produce much cheaper there. In reality Japan went up the value chain and Japanese products are just as expensive as in any other western nation.
There simply isn't enough value to pay them more. Software is the opposite. Each worker produces a lot of value so companies can afford to pay them more.
A few decades ago western countries were worried that Japan would take over the electronics market because they could produce much cheaper there. In reality Japan went up the value chain and Japanese products are just as expensive as in any other western nation.
If you doubled the hourly wage of the workers in Asia or Africa, the price of a 20 Euro T-shirt sold in Europe would increase by.... 20 cents (incl. VAT).
Companies do this because they are not hold liable for the environmental damage done locally and by the transport, not even mentioning the low safety standards etc.
Companies do this because they are not hold liable for the environmental damage done locally and by the transport, not even mentioning the low safety standards etc.
> There simply isn't enough value to pay them more.
Why? If your answer is “Because a T-shirt isn’t valuable”, then that’s a circular argument.
Why? If your answer is “Because a T-shirt isn’t valuable”, then that’s a circular argument.
Mass market T-shirts are worth some maximum amount to consumers. It’s a circular argument with its center rooted in this fact.
A T-shirt manufacturing employee’s wage is capped as some fraction as the value of that shirt to an end consumer times the number of shirts they can make in a year.
A T-shirt manufacturing employee’s wage is capped as some fraction as the value of that shirt to an end consumer times the number of shirts they can make in a year.
But how much would consumers pay for clothing if mass-market clothing (which is only possible due to low wage labour) wasn't available? What with clothing being pretty essential to everyday living, I'd guess quite a bit more than the current market value of a t-shirt.
I can't find it now but I read an article once with a title like "The $10,000 Shirt" or something like that, which argued that in medieval times, the amount of labour that it took to produce a single shirt would cost about $10,000 at modern minimum wage.
If you were a peasant back then you might have owned two shirts: your regular one that you wore every day, and a 'fancy' one for church, weddings etc.. When your shirt got too ragged you cut it up and tailored it into clothes for your children, or used the material to patch up holes in other clothing. When even those got too decrepit you'd use them as kitchen rags etc. until they literally disintegrated. Cloth was too valuable to waste!
We truly do live in a world of abundant excess in the modern era, and we should appreciate it.
If you were a peasant back then you might have owned two shirts: your regular one that you wore every day, and a 'fancy' one for church, weddings etc.. When your shirt got too ragged you cut it up and tailored it into clothes for your children, or used the material to patch up holes in other clothing. When even those got too decrepit you'd use them as kitchen rags etc. until they literally disintegrated. Cloth was too valuable to waste!
We truly do live in a world of abundant excess in the modern era, and we should appreciate it.
> We truly do live in a world of abundant excess in the modern era, and we should appreciate it.
We do, as in you and I, sure. But isn't the point here that those making things like mass-market t-shirt for very low wages are not sharing in that world of excess. At least not in an equitable manner.
Why is it that these people should work for low wages so that you and I can enjoy cheap T-shirts, but I'm not expected to produce websites and computer programs for low wages so that people can enjoy cheap business tools?
We do, as in you and I, sure. But isn't the point here that those making things like mass-market t-shirt for very low wages are not sharing in that world of excess. At least not in an equitable manner.
Why is it that these people should work for low wages so that you and I can enjoy cheap T-shirts, but I'm not expected to produce websites and computer programs for low wages so that people can enjoy cheap business tools?
Scarcity of people who can create websites and computer programs as compared to the demand for that vs the lack of scarcity of people capable to make T-shirts vs the demand for makers of T-shirts.
This is in large part driven by most website development being semi or entirely custom. (People who use Shopify to make storefronts or Facebook to make company landing pages don’t make the same amount as Shopify or Facebook devs.)
This is in large part driven by most website development being semi or entirely custom. (People who use Shopify to make storefronts or Facebook to make company landing pages don’t make the same amount as Shopify or Facebook devs.)
It seems to me that much like remote workers often get location-based pay which is lower than that for someone for doing the same work in a location like San Francisco or NYC, it's less that there is oversupply of t-shirt makers, and more that the pay rates of their local market are lower overall which puts them in a weaker bargaining position.
And when you start looking at why that is you get pretty awkward answers like: because of selectively enforced free market ideals where capital is free to move across borders but labour isn't. Which are ultimately backed up by military power.
And when you start looking at why that is you get pretty awkward answers like: because of selectively enforced free market ideals where capital is free to move across borders but labour isn't. Which are ultimately backed up by military power.
If you’re going to charge $100 for a shirt, I’m sure not going to have drawers and drawers full of your shirts. The first reactions will be sharply reduced consumption, increased repair and secondhand purchasing, long before people are going topless.
A thing is “worth” whatever people are willing to pay for it. T-shirts are cheap because they are cheap. Diamonds are expensive because they are expensive. But perceptions can be changed, and circles can be broken. These things are not unalterable.
> Let’s say I manufacture a shirt in San Francisco and you buy it for $100. [...] $100 is a price you’re willing to pay to wear it.
> [...] if I [...] make the shirt in [...] Bangladesh, you want to cut the price and reduce it to $20, because of “cost of living” for the workers
This is a strawman argument. If I am willing to pay $100 for a shirt, I would not demand the price be cut just because it was made in Bangladesh. Given a choice between a $100 SF shirt and a $99 Bangladesh shirt that are otherwise identical, I would buy the latter. I think many others would make the same choice.
The only times I can think of where I would discriminate by location are if:
1. I am trying to support a particular industry in a particular region
2. I am trying not to support a particular industry in a particular region
3. I am actually paying for the "Made in X" label rather than the shirt itself, for social status, prestige, etc.
> [...] if I [...] make the shirt in [...] Bangladesh, you want to cut the price and reduce it to $20, because of “cost of living” for the workers
This is a strawman argument. If I am willing to pay $100 for a shirt, I would not demand the price be cut just because it was made in Bangladesh. Given a choice between a $100 SF shirt and a $99 Bangladesh shirt that are otherwise identical, I would buy the latter. I think many others would make the same choice.
The only times I can think of where I would discriminate by location are if:
1. I am trying to support a particular industry in a particular region
2. I am trying not to support a particular industry in a particular region
3. I am actually paying for the "Made in X" label rather than the shirt itself, for social status, prestige, etc.
Your salary is only partially based on "the value created by employee" - most of it is the market forces of supply and demand. When you're remote, you're competing with a much larger number of people for the same positions.
Salary is always lower than the (expected) value of work. If the value of work was equal to salary, the employer would have to reason to do this transaction.
The price of everything is always between the value placed on it by the buyer and the cost to the seller. Not a revelation.
At the margin, they are all equal because trade continues until the gains from trade are exhausted.
In many countries and U.S. states, laws guarantee that the cost of an employee to an employer is almost twice as much as what the employee is paid. In those circumstances, the potential gains from bilateral trade are not exhausted and people engage in that trade outside of the dominion of the state.
At the margin, they are all equal because trade continues until the gains from trade are exhausted.
In many countries and U.S. states, laws guarantee that the cost of an employee to an employer is almost twice as much as what the employee is paid. In those circumstances, the potential gains from bilateral trade are not exhausted and people engage in that trade outside of the dominion of the state.
That's it. I believe, like in any market the top earners, who are hard to get and hurt when they go will continue to get high pay. Since even if you include the world (and most jobs don't, they include some timezones, jurisdictions only) the market is still rather small.
But if you're just the average developer, like most of us really are - the higher competition will surely make it harder to negotiate higher pay.
But if you're just the average developer, like most of us really are - the higher competition will surely make it harder to negotiate higher pay.
> In many countries and U.S. states, laws guarantee that the cost of an employee to an employer is almost twice as much as what the employee is paid.
This might be true at the lower end close to minimum wage, but payroll taxes are a specific % (usually around 15% at the federal level, and the employee pays about half that) and insurance and other benefits are typically a fixed cost per head (15k to 30k per year at most of the places I've worked). The only thing that might be variable are things like 401k match. Once you get to six figure salaries, the fully loaded cost per employee is 120-130% of their salary.
This might be true at the lower end close to minimum wage, but payroll taxes are a specific % (usually around 15% at the federal level, and the employee pays about half that) and insurance and other benefits are typically a fixed cost per head (15k to 30k per year at most of the places I've worked). The only thing that might be variable are things like 401k match. Once you get to six figure salaries, the fully loaded cost per employee is 120-130% of their salary.
It’s the opposite at the very low end, since many near minimum wage jobs don’t even offer benefits.
> Your salary is only partially based on "the value created by employee" - most of it is the market forces of supply and demand.
Value created is the driver for the demand side. Yes, the supply side will differ regionally, but for a service that isn't differentiated by the region it comes from, that doesn't matter—the law of one price should, in a competitive remote hiring market, prevail equalizing wages for remote work. Firms trying to normalize location based pay are trying to short-circuit the law of one price—or at least slow the development of equilibrium by introducing friction—by way of creating artificial market segmentation, which can only work so long as the market is not competitive because of either a monopsony or an explicit or tacit agreement not to compete for labor.
The public discussion that passes for transparency and explaining to prospective workers isn't just about that, it's most signalling to other employers to get them onboard.
Value created is the driver for the demand side. Yes, the supply side will differ regionally, but for a service that isn't differentiated by the region it comes from, that doesn't matter—the law of one price should, in a competitive remote hiring market, prevail equalizing wages for remote work. Firms trying to normalize location based pay are trying to short-circuit the law of one price—or at least slow the development of equilibrium by introducing friction—by way of creating artificial market segmentation, which can only work so long as the market is not competitive because of either a monopsony or an explicit or tacit agreement not to compete for labor.
The public discussion that passes for transparency and explaining to prospective workers isn't just about that, it's most signalling to other employers to get them onboard.
> Firms trying to normalize location based pay are trying to short-circuit the law of one price—or at least slow the development of equilibrium by introducing friction
Considering the firms lowering the prices are currently paying far above the median in global wages, they’re doing the exact opposite of short circuiting the “law of one price”.
The whole reason for paying higher than median wage was the friction of being geographically located in high demand areas.
Considering the firms lowering the prices are currently paying far above the median in global wages, they’re doing the exact opposite of short circuiting the “law of one price”.
The whole reason for paying higher than median wage was the friction of being geographically located in high demand areas.
[deleted]
I don't understand. If we are discussing two remote positions why am I competing with less people of its in San Francisco?
I think the problem is that the conversation is "we'll pay you X of which one factor is where you live" when it should be "we'll pay you X if you work for us, do you accept?". The reasons for people offering a salary amount is irrelevant, it's about if the offer is acceptable to an employee. If I move somewhere, I get paid the same, and if it's cheaper I get more spending money, if it's more expensive, I have to swallow the costs.
If the contract says "we can renegotiate if you relocate", that's not a contract I'd sign, but it's up to the company and employee to decide if that's an acceptable clause in the contract.
A contract which says "we'll pay you less if you move somewhere cheaper" must also say "we'll pay you more if you move somewhere more expensive" but then suddenly my employment incentivises my location. I wouldn't move from Warsaw to Bangladesh but it might make economic sense to move to Zurich. If it's in the contract that the employer must honour the movement, then they have unexpected cost recalculations to do. If it's not, and you're just hoping for a "good faith" agreement, again that's not a contract I'd sign, but others might.
If the contract says "we can renegotiate if you relocate", that's not a contract I'd sign, but it's up to the company and employee to decide if that's an acceptable clause in the contract.
A contract which says "we'll pay you less if you move somewhere cheaper" must also say "we'll pay you more if you move somewhere more expensive" but then suddenly my employment incentivises my location. I wouldn't move from Warsaw to Bangladesh but it might make economic sense to move to Zurich. If it's in the contract that the employer must honour the movement, then they have unexpected cost recalculations to do. If it's not, and you're just hoping for a "good faith" agreement, again that's not a contract I'd sign, but others might.
> A contract which says "we'll pay you less if you move somewhere cheaper" must also say "we'll pay you more if you move somewhere more expensive" but then suddenly my employment incentivises my location
I believe this is a key point in the argument. Currently, I see only one party having an upside but no downside.
I believe this is a key point in the argument. Currently, I see only one party having an upside but no downside.
Because only one party has the upside when the seller of labor moves to a location where they have few buyers of labor.
A seller of labor that has multiple buyers can negotiate for more pay in places where they have lots of buyers for their labors (and their buyers can afford to pay).
A buyer of labor will not explicitly state this for obvious reasons, just like a seller of labor will not explicitly state they will accept lower pay if their situation changes, but every transaction in life is possible to be subject to negotiation.
A seller of labor that has multiple buyers can negotiate for more pay in places where they have lots of buyers for their labors (and their buyers can afford to pay).
A buyer of labor will not explicitly state this for obvious reasons, just like a seller of labor will not explicitly state they will accept lower pay if their situation changes, but every transaction in life is possible to be subject to negotiation.
To be very capitalistic about it, that is a choice that the seller makes. Why should the burden of relocation fall upon the purchaser of goods when it's the decision of the provider of goods? I shouldn't have to pay more for a product because they decided to move their manufacturing process, that's their call not mine. They can price it in to their new rates, but then it's up to me to agree or disagree if I'll pay them. But equally, if their manufacturing costs drop, I have no recourse to demand a rebate.
I definitely agree that it's strange that the same labour is worth different amounts depending on point of origin, when the goods sold is essentially information. I don't like it, either. But employers are not beholden to the relocations of their employees, it's the responsibility of the employees to negotiate the agreement.
I definitely agree that it's strange that the same labour is worth different amounts depending on point of origin, when the goods sold is essentially information. I don't like it, either. But employers are not beholden to the relocations of their employees, it's the responsibility of the employees to negotiate the agreement.
I mean, the way you do it is interview with a local company, get an offer, and go to your boss and ask for a matching raise.
furthermore what's to stop someone from living as a fulltime itinerant within the cheapest parts of the 2nd world while keeping a p.o box within the highest pay bracket and claiming that as their residence?
> Let’s say you hire me for your company in San Francisco and pay me $150K. .. But now if I decide to move to Tulsa, OK, you want to cut my pay and reduce it to 90K, because of “cost of living”. Why? My value to the company hasn’t changed!
The average article/comment on HN is extremely confused about how compensation works. This is a huge problem because if you don't reason about comp well, you're guaranteed to make suboptimal moves for yourself.
In the example - does the author also expect to pay SF-level rent in Tulsa since "the value of housing to me hasn't changed?" Nope, because of the scarcity dynamic: if you HAVE to be in SF, you are forced to pay SF rent. If you can be anywhere, you can follow inexpensive supply.
If you understand that, you can understand the employer side. If I HAVE to have a SF programmer, I HAVE to pay them SF level rates. If I can have a programmer anywhere in the US, I can follow the supply. So I pay a Tulsa programmer a Tulsa salary. The fact that he once lived in SF is irrelevant to the equation.
I totally get why you don't want to hear that but that's how it is. It doesn't make sense to pay you more just because you were once in a pricier locale any more than you will pay more for rent just because you once did. I am making this clear because I find that it's important to understand reality you're operating in.
If you are with me so far on this argument, you can follow it to the natural conclusion of how you can make big bucks: don't be generic. If your biggest salary driver is your proximity to the office, it was always a matter of time. Instead, work on developing combinations of knowledge/skills/experience/network/etc that are valuable and unique.
That's always been my strategy and while I worry about many things in life, I don't worry about a Tulsa version of me driving my salary down (even if the version of me in Tulsa is me...)
The average article/comment on HN is extremely confused about how compensation works. This is a huge problem because if you don't reason about comp well, you're guaranteed to make suboptimal moves for yourself.
In the example - does the author also expect to pay SF-level rent in Tulsa since "the value of housing to me hasn't changed?" Nope, because of the scarcity dynamic: if you HAVE to be in SF, you are forced to pay SF rent. If you can be anywhere, you can follow inexpensive supply.
If you understand that, you can understand the employer side. If I HAVE to have a SF programmer, I HAVE to pay them SF level rates. If I can have a programmer anywhere in the US, I can follow the supply. So I pay a Tulsa programmer a Tulsa salary. The fact that he once lived in SF is irrelevant to the equation.
I totally get why you don't want to hear that but that's how it is. It doesn't make sense to pay you more just because you were once in a pricier locale any more than you will pay more for rent just because you once did. I am making this clear because I find that it's important to understand reality you're operating in.
If you are with me so far on this argument, you can follow it to the natural conclusion of how you can make big bucks: don't be generic. If your biggest salary driver is your proximity to the office, it was always a matter of time. Instead, work on developing combinations of knowledge/skills/experience/network/etc that are valuable and unique.
That's always been my strategy and while I worry about many things in life, I don't worry about a Tulsa version of me driving my salary down (even if the version of me in Tulsa is me...)
If a company hires someone in Tulsa and then they move to San Francisco will the company pay more?
The end goal of location based compensation seems to be encouraging everyone to live in a low cost area, and take a lower wage thereby saving the company money.
I can see why it makes sense to the company, but as an employee I wouldn't support the idea.
We may not have a software union, but the least we can do is be critical of ideas that will directly lead to paycuts.
The end goal of location based compensation seems to be encouraging everyone to live in a low cost area, and take a lower wage thereby saving the company money.
I can see why it makes sense to the company, but as an employee I wouldn't support the idea.
We may not have a software union, but the least we can do is be critical of ideas that will directly lead to paycuts.
(n=1) When I moved from MA to CA, my then employer increased my salary by 18% to ensure market competitiveness. My boss said HR told him it was needed otherwise I’d just leave when I saw other options.
In reality though, for a given company, cost of living adjustments don't really compensate for the difference in actual cost for most people. If you're earning market rate in Tulsa and get a 20% bump in your base pay for moving to the Bay Area, you're almost certainly not coming out ahead.
It depends if you're spending it on iMacs or on rent.
Oh I totally get that "it would be very nice" to get paid a lot and spend a little.
I am not debating that part, just the reality part.
I am not debating that part, just the reality part.
This debate is made more complicated than it needs to be because almost everyone keeps getting confused between cost of living and cost of labor. These two are somewhat correlated but can easily deviate from each other especially for a given industry in a given place.
We are right now in a transition phase during which employers and employees are trying to find market equilibrium under these here conditions were remote work suddenly is a bigger option. I expect that we'll naturally arrive at a few different pay ranges for similar work that result in essence in different markets based on constraints required by the work. That might be based on a requirement to be in a specific location, time zone, country (for legal reasons), or unconstrained as long as the work gets done.
Ultimately I expect this to result in location mattering a whole lot less for most software job's compensation. This means much lower comp for folks in SF or NYC and much higher comp for folks in places that currently have low cost of labor like the middle of the US, but also Central and South America.
Remote work is gonna be the great equalizer. It's exciting to be able to work from more locations. On the other hand the dream of a silicon valley salary for folks who moved to Bozeman, MT will last a short time for the average developer. And salaries in SV will also adjust down as fewer jobs will require being there and now compete with developers in more locations.
Edit: typo
We are right now in a transition phase during which employers and employees are trying to find market equilibrium under these here conditions were remote work suddenly is a bigger option. I expect that we'll naturally arrive at a few different pay ranges for similar work that result in essence in different markets based on constraints required by the work. That might be based on a requirement to be in a specific location, time zone, country (for legal reasons), or unconstrained as long as the work gets done.
Ultimately I expect this to result in location mattering a whole lot less for most software job's compensation. This means much lower comp for folks in SF or NYC and much higher comp for folks in places that currently have low cost of labor like the middle of the US, but also Central and South America.
Remote work is gonna be the great equalizer. It's exciting to be able to work from more locations. On the other hand the dream of a silicon valley salary for folks who moved to Bozeman, MT will last a short time for the average developer. And salaries in SV will also adjust down as fewer jobs will require being there and now compete with developers in more locations.
Edit: typo
As someone who is more interested in economics than software, I believe you are 100% right. Once companies figure out how to have employees work remotely, there won’t be as many high priced SV developer jobs. Companies just might decide to higher all (insert Eastern European block country here) developers because they are “local” to each other and are willing to work for a fraction of the cost. It’s not about what you are worth. It’s what companies can replace you for, and if you are remote that replacement value goes down.
They could have done that in the past too (and plenty of companies did - just not the ones that went on to be the most successful). Outsourcing to one country didn’t require remote work.
They could have and many did. I think many who didn't were afraid that it wouldn't go well, but were now forced into a learning experience.
Not exactly eastern European, but the company I recently left has a group of devs in Dublin like this.
Interestingly, I interviewed with a company last week that has almost the entirety of their dev teams in Dublin.
Neither place has any obvious business reason to have development happening there, so I can only assume they are paying meaningfully less comp.
Interestingly, I interviewed with a company last week that has almost the entirety of their dev teams in Dublin.
Neither place has any obvious business reason to have development happening there, so I can only assume they are paying meaningfully less comp.
Ireland is a EU tax haven; companies go there to pay less taxes, not to enjoy the beautiful sheep of the Irish grasslands.
So we don’t do location-based pay at our company, but we do factor in PEO costs in order to ensure folks are full time employees for legal reasons. So, if you’re a senior software engineer in Nigeria (for example), your salary would be exactly what we’d pay a senior software engineer in SF, NY, etc. but we’d lower the pay by ~40% (for example) if that’s how much the PEO firm charged us to operate within that country.
I hate that we have to do this, and I’m really looking for PEOs that charge less but they all seem to take a significant amount of capital so we’re starting to consider spinning up entities in order to scale more efficiently and take on lower operational costs. However, then we get back to having to hire within that country’s entity to get that benefit (Ireland for example).
Anyone know of cheaper PEOs or better ways? I want my team getting paid as much as possible because, at the end of the day, it’s the same cost to our business anyway.
I hate that we have to do this, and I’m really looking for PEOs that charge less but they all seem to take a significant amount of capital so we’re starting to consider spinning up entities in order to scale more efficiently and take on lower operational costs. However, then we get back to having to hire within that country’s entity to get that benefit (Ireland for example).
Anyone know of cheaper PEOs or better ways? I want my team getting paid as much as possible because, at the end of the day, it’s the same cost to our business anyway.
Companies will pay as little as they can, employees will charge as much as they can. Everything else is an excuse or window dressing. What someone is paid is not connected to what they are worth or their value. Nor is it "fair" because fair isn't a real thing. Your company is not your family. Unless you own a significant share, it's purely your adversary.
I wish people would just honestly admit this. Pretending otherwise almost always leads to workers misunderstanding what is happening and getting underpaid.
I wish people would just honestly admit this. Pretending otherwise almost always leads to workers misunderstanding what is happening and getting underpaid.
I think it is reasonable that companies wouldn't pay silicon valley prices for someone living in middle of nowhere Idaho. With that being said I think part of the issue is that most people are not being paid enough in general, and with the increase in student loan debt, stagnation in wages, and overall less buying power that people have today, the idea of having wages cut feels very bad.
That compounded with the fact that companies already look for ways to pay you less, this is just adding another reason. It's also important to bring up that the company will save money by not having as large of an office (or even having one), saving on any commuter pass subsidies, etc so just cutting wages for remote workers, puts more money in their pocket.
And what are they doing with all this extra money? Are they hiring a few more employees in those teams that have been begging for extra hands for years? Are they reinvesting in the company, giving more employee benefits, setting up funds for employee hardship, helping employees set up a remote work space, helping employees relocate? Or are they just using the money and doing stock buy backs, pocketing the extra change, and expecting people to continue working in the same environment as before, just from their bedroom?
That compounded with the fact that companies already look for ways to pay you less, this is just adding another reason. It's also important to bring up that the company will save money by not having as large of an office (or even having one), saving on any commuter pass subsidies, etc so just cutting wages for remote workers, puts more money in their pocket.
And what are they doing with all this extra money? Are they hiring a few more employees in those teams that have been begging for extra hands for years? Are they reinvesting in the company, giving more employee benefits, setting up funds for employee hardship, helping employees set up a remote work space, helping employees relocate? Or are they just using the money and doing stock buy backs, pocketing the extra change, and expecting people to continue working in the same environment as before, just from their bedroom?
I think they should pay you /more/ to live in Idaho. Clearly California is an extremely desirable place to live, and too many people do elect to live there, causing issues with: traffic (pollution), wildfires, power outages, affordable housing shortages, long lines at the DMV. We need to add more disincentives to living there in order to load balance the population a bit.
This is why I'm concerned (selfishly) that the remote work trend might end up being terrible for wealthy countries.
If you’re working 100% remotely in the US, is there really no one in India who couldn’t do your job just as well? Are you sure? There’s a lot of people in India, and they all have a much lower cost of living.
(I don’t mean to single out India, it’s one of many countries.)
If you’re working 100% remotely in the US, is there really no one in India who couldn’t do your job just as well? Are you sure? There’s a lot of people in India, and they all have a much lower cost of living.
(I don’t mean to single out India, it’s one of many countries.)
But singling out India is somewhat sensible here (in a positive way). The Indian education system churns out tens of millions of new grads each year, most of whom speak English and many of whom have a strong grounding in math/comp-sci.
India has the raw materials to be super-competitive in a remote-primarily software development environment. You might single then out as they’re a place with one the best combinations of these raw materials and still a relatively low cost for daily living.
(My company is remote-forced right now and intends to go remote-first/primarily when COVID’s acute phase is behind us. I don’t think remote will be as terrible for wealthy countries if COVID is contained in 2021. Remote is hard and comes with its own set of drags. Once companies can get back together, I think you’ll see “remote but with monthly travel to HQ” or “1-2 days in office” dominate over “I never have a lunch with any colleague” modes of working.)
India has the raw materials to be super-competitive in a remote-primarily software development environment. You might single then out as they’re a place with one the best combinations of these raw materials and still a relatively low cost for daily living.
(My company is remote-forced right now and intends to go remote-first/primarily when COVID’s acute phase is behind us. I don’t think remote will be as terrible for wealthy countries if COVID is contained in 2021. Remote is hard and comes with its own set of drags. Once companies can get back together, I think you’ll see “remote but with monthly travel to HQ” or “1-2 days in office” dominate over “I never have a lunch with any colleague” modes of working.)
US tech workers are massively over-payed so it's tough to feel sorry for ourselves. I moved here from Europe and the salaries are completely absurd, especially at the junior level. People are being brought in from college, they can barely tie their shoe laces without someone there to help them and they are given 6 figures. Meanwhile I know people in the UK who are seasoned lead engineers who work hard and literally put entire companies on their backs and they make half the money.
European salaries are absurdly low. As an expat who doesn’t benefit from government services the same way an EU/UK citizen would, it’s a non starter. London is easily as expensive, if not moreso than San Francisco. I don’t understand how engineers can work for 30-45% less.
> London is easily as expensive, if not moreso than San Francisco.
As a Londoner, I find that hard to believe. London is a huge, diverse city with many industries other than tech, and the vast majority of London's population don't make anything close to an SF tech salary. If London was as expensive as SF then I know I wouldn't be able to afford to live here.
As a Londoner, I find that hard to believe. London is a huge, diverse city with many industries other than tech, and the vast majority of London's population don't make anything close to an SF tech salary. If London was as expensive as SF then I know I wouldn't be able to afford to live here.
Perhaps it is local familiary. Living in Oakland and working in San Francisco I made $175k and was able to save $4,500 per month after all of my living and familial expenses. When I’ve spoken to companies in London they seemed to max out around $100k.
Whenever I looked at apartments online trying to find an equivalent lifestyle (30 minutes door to door commute, nearby parks and restauranta, 1 br 85 m^2 with good amenities) the rent always came out about the same as what I was paying ($1,840/month).
The difference being home in Oakland My hood was mostly single family homes with yards (and a few yuppy apartment complexes like mine). In London everything within that commute range seemed to be a concrete jungle, and I couldnt figure out how to find an equivalent neighborhood withot really going far away from the tech companies.
Whenever I visit london my dollar never seemed to stretch far and food / groceries / transit felt reallly spendy.
London pubtrans is clearly better than anywhere in the USA, that goes without sayyng, but was also more expensive (if I went to the office I think I paid $4 each way for the transbay bus, with a 5-10 minute walk on each end of my commute).
It’s a great city (except for the traffic. I would be terrified to ride a bicycle there), and one of my favorite things to do in life is smoke a spliff and walk down the camden locks trail.
Whenever I looked at apartments online trying to find an equivalent lifestyle (30 minutes door to door commute, nearby parks and restauranta, 1 br 85 m^2 with good amenities) the rent always came out about the same as what I was paying ($1,840/month).
The difference being home in Oakland My hood was mostly single family homes with yards (and a few yuppy apartment complexes like mine). In London everything within that commute range seemed to be a concrete jungle, and I couldnt figure out how to find an equivalent neighborhood withot really going far away from the tech companies.
Whenever I visit london my dollar never seemed to stretch far and food / groceries / transit felt reallly spendy.
London pubtrans is clearly better than anywhere in the USA, that goes without sayyng, but was also more expensive (if I went to the office I think I paid $4 each way for the transbay bus, with a 5-10 minute walk on each end of my commute).
It’s a great city (except for the traffic. I would be terrified to ride a bicycle there), and one of my favorite things to do in life is smoke a spliff and walk down the camden locks trail.
I was recently called by a Facebook internal recruiter that claimed (I wasn't interested, so can't verify - he might have been telling bullshit) that the relatively low level developer job he was hiring for in London had a budget of around USD $165k/year. But the London developer market has very broad salary range. It's not that many years ago I worked at companies where we hired senior developers around the GBP 40k/USD 55k mark.
The 30 minutes door to door commute is the problem if comparing, as London is huge. A 1 hour commute is closer to the norm. But a 1 hour commute on a train is very different to the same 1 hour if you're driving and can't spend a good chunk of it with your face in a book or watching Netflix or whatever.
In terms of housing, my current mortgage for a 3 bedroom terraced house with a garden in London is about USD $2k/month, but that does mean living further out from the centre than what you want.
For anyone moving to London, my tip is Croydon. It has an awful reputation which is mostly unearned (it's a very large borough, and very diverse, and it's reputation is pretty much down to scale and some small pockets of the most deprived parts of the borough), and so it's unreasonably cheap for how good transport links it has in to the centre. There are places in London I might prefer if money was no object, but money really would need to be no object, as up until maybe the 3-4 million pound range you'll get more for your money here than ost other places in town.
The 30 minutes door to door commute is the problem if comparing, as London is huge. A 1 hour commute is closer to the norm. But a 1 hour commute on a train is very different to the same 1 hour if you're driving and can't spend a good chunk of it with your face in a book or watching Netflix or whatever.
In terms of housing, my current mortgage for a 3 bedroom terraced house with a garden in London is about USD $2k/month, but that does mean living further out from the centre than what you want.
For anyone moving to London, my tip is Croydon. It has an awful reputation which is mostly unearned (it's a very large borough, and very diverse, and it's reputation is pretty much down to scale and some small pockets of the most deprived parts of the borough), and so it's unreasonably cheap for how good transport links it has in to the centre. There are places in London I might prefer if money was no object, but money really would need to be no object, as up until maybe the 3-4 million pound range you'll get more for your money here than ost other places in town.
> But the London developer market has very broad salary range. It's not that many years ago I worked at companies where we hired senior developers around the GBP 40k/USD 55k mark.
Working in London in 2007/8 it was common for senior developers to switch to contract work since it was fairly easy to at least double your salary that way (GBP 500/600 a day was about the going rate then IIRC.) At the time I remember traveling to the US and everything seeming very cheap at the 1.90 GBP/USD exchange rates pre Brexit and financial crash...
Working in London in 2007/8 it was common for senior developers to switch to contract work since it was fairly easy to at least double your salary that way (GBP 500/600 a day was about the going rate then IIRC.) At the time I remember traveling to the US and everything seeming very cheap at the 1.90 GBP/USD exchange rates pre Brexit and financial crash...
One of the things that distorts these discussions is that it's not just SF proper that's expensive for the most part. It's also the South Bay, Marin, and even parts of the East Bay. It's hard to have a decent daily commute from anywhere that's relatively inexpensive. That's not the case with most cities where a 20-40 mile drive (or even a commuter rail) to where the jobs are (which may or may not be in the city proper) can get you into fairly reasonably-priced housing.
London also has excellent public transport. (Some Londoners might disagree, but have they ever travelled? I've never been to any other large city where it was easier to get around by train and bus.) It's very easy to live in London without needing a car, which brings the cost of living down substantially.
London is very well connected in a bunch of ways (bus, tube, ferry, overground, DLR, tram, train, boris bike...) and in the centre is a lot more walkable than you might think, to the point of not really needing any of it in certain areas.
The reason we call it shit is because (before COVID) they're pretty much all pushed beyond capacity during the commuting hours, or practically all the time between the main tourist spots. Commuting in London is a truly hellish experience.
And that includes the commuter trains that are frequently delayed or cancelled while ticket prices increase above inflation every year.
The best thing that happened from covid is skipping the commute and saving the £300 a month it took to get to the office and back.
The reason we call it shit is because (before COVID) they're pretty much all pushed beyond capacity during the commuting hours, or practically all the time between the main tourist spots. Commuting in London is a truly hellish experience.
And that includes the commuter trains that are frequently delayed or cancelled while ticket prices increase above inflation every year.
The best thing that happened from covid is skipping the commute and saving the £300 a month it took to get to the office and back.
The vast majority of SF's population don't make anything close to tech salaries either. Working at a FAANG or adjacent company in the Bay Area is roughly equivalent to working in finance in London.
But even outside of the big tech companies, wages for software engineers are relatively higher in the US than the UK (90th percentile vs 75th) and the higher paid are paid more (2.6x the median at 90th percentile vs 2.0x the median.) If you compare median salaries / rents on pre Brexit and 2008 financial crash exchange rates SF and the Bay Area come out pretty similar.
But even outside of the big tech companies, wages for software engineers are relatively higher in the US than the UK (90th percentile vs 75th) and the higher paid are paid more (2.6x the median at 90th percentile vs 2.0x the median.) If you compare median salaries / rents on pre Brexit and 2008 financial crash exchange rates SF and the Bay Area come out pretty similar.
Often people are paid a 'London Allowance', to maintain their residence equitably. Their engineer/other salary being the same as places further away. I assume there is a cost of residency allowance for other UK cities that have a premium. If you move away, that residency allowance is adjusted to where you work from. Thus the technical salary is ~~flat. After all this allowance is a pass through to the landlords. Those whose parents onw London center digs do very well. I am not sure how property taxes are levied in the UK, but one would anticipare the Lords would have long since levelled that via head taxes that are levelled in some manner? Any UK people care to weigh in here?
Public sector jobs often have an explicit "London weighting" (or HCAS), it's set at 20% of salary up to a cap of about £7k, and decreases the further you get from central London. Some private sector firms do similar apparently, but I've never heard of it in the tech sector.
Other cities don't usually get similar supplements, even places like Cambridge where housing costs can be really high.
Property taxes are called "Council tax" here, they're probably the most regressive tax in England (the rest of the UK have slightly different rules). The amount of tax depends upon both the local area and the value of the property in 1991. Everyone who's house was work more than £320k in 1991 pays the same rate. This means in Kensington, London someone in a swanky 250 sq.m. £8million house pays £2473 per year...as does someone in a £million apartment on the next street. The person a few streets over in a grotty 20sq.m £300k studio will be paying £962 per year.
Other cities don't usually get similar supplements, even places like Cambridge where housing costs can be really high.
Property taxes are called "Council tax" here, they're probably the most regressive tax in England (the rest of the UK have slightly different rules). The amount of tax depends upon both the local area and the value of the property in 1991. Everyone who's house was work more than £320k in 1991 pays the same rate. This means in Kensington, London someone in a swanky 250 sq.m. £8million house pays £2473 per year...as does someone in a £million apartment on the next street. The person a few streets over in a grotty 20sq.m £300k studio will be paying £962 per year.
Thanks for the info. The rich are well protected indeed...
"Often people are paid a 'London Allowance', to maintain their residence equitably.
Their engineer/other salary being the same as places further away. I assume there is a cost of residency allowance for other UK cities that have a premium.
If you move away, that residency allowance is adjusted to where you work from. Thus the technical salary is ~~flat.
After all this allowance is a pass through to the landlords. Those whose parents onw London center digs do very well.
I am not sure how property taxes are levied in the UK, but one would anticipare the Lords would have long since levelled that via head taxes that are levelled in some manner?
Any UK people care to weigh in here? "
Reformatting for readability, sorry aurizon my brain was struggling.
Their engineer/other salary being the same as places further away. I assume there is a cost of residency allowance for other UK cities that have a premium.
If you move away, that residency allowance is adjusted to where you work from. Thus the technical salary is ~~flat.
After all this allowance is a pass through to the landlords. Those whose parents onw London center digs do very well.
I am not sure how property taxes are levied in the UK, but one would anticipare the Lords would have long since levelled that via head taxes that are levelled in some manner?
Any UK people care to weigh in here? "
Reformatting for readability, sorry aurizon my brain was struggling.
NP, I am known for my dense code...
Tech workers exist outside of Big Tech and well funded SaaS companies. I've worked as a person working on the internal bulletin board, planograms and point of sales devices at a retail company. I've worked writing reports at a small logistics company that specialized in getting auto parts to garages. I'm currently working in the public sector.
In none of these have I made six figures.
Part of this is locale. Part of it is I'm not seeking out those Big Tech jobs. Part of it is the industries I've been working in.
Lumping the public sector in the midwest into "US tech workers" and claiming the entire pool is overpaid is the reality for a small set of industries in (what has been) a few geographic bubbles.
In none of these have I made six figures.
Part of this is locale. Part of it is I'm not seeking out those Big Tech jobs. Part of it is the industries I've been working in.
Lumping the public sector in the midwest into "US tech workers" and claiming the entire pool is overpaid is the reality for a small set of industries in (what has been) a few geographic bubbles.
The article we are commenting on is written from the context of a high COL based tech worker.
Why say US workers are overpaid instead of saying UK workers are underpaid?
I said US tech workers are overpaid, not US workers in general. UK tech salaries are a lot closer to other types of office work.
> remote work trend might end up being terrible for wealthy countries
I don't think so. Most wealthy countries don't have jobs paying anything close to what Americans make. When you're talking about tech, the division is really just between America and everyone else. This is going to be really great for Canadians who don't want to immigrate to the states since there's almost no difference in talent, culture, or time zone compared to the USA but wages are about half as much at the top end.
I don't think so. Most wealthy countries don't have jobs paying anything close to what Americans make. When you're talking about tech, the division is really just between America and everyone else. This is going to be really great for Canadians who don't want to immigrate to the states since there's almost no difference in talent, culture, or time zone compared to the USA but wages are about half as much at the top end.
But why stop at Canada?
There are lots of good reasons not to outsource to a third world country, but not many reasons to hire a remote American over a remote Canadian if a company already has a presence in Canada.
The real question raised in this blog is actually why we allow capital to move and not labour. People who are wondering why living standards in the West have underperformed productivity should take a look at that question.
Of course he's right about location based pay, too.
The thing that ties it together is negotiating position. Chances are if you're a firm that many of your employees will in fact be OK, implicitly or explicitly, to share the gains from relocating to a cheaper area with your company. If you move to a place where you have 20K lower expenses, it's reasonable to think you'll share some of that with your employer, if only because you find it inconvenient to find a new one.
It is of course true that you're as useful to the company as before, but it's a poker game. It's perfectly fine for you to insist on the same pay, but you'll have to run the gauntlet of your employer calling your bluff.
I foresee more movement on this issue. Different firms will try different policies, and different employees will try different jobs. We'll get some moves to read about shortly, once this has played out a bit. One thing is for instance simply representing you live somewhere other than where you spend your time.
Someone is going to find a friend in central London, NYC, or SF, and swap addresses with them. For instance if I live with my family in the suburbs, I could "swap" with some younger person living in town centre, and give them a piece of the action instead of my employer.
Of course he's right about location based pay, too.
The thing that ties it together is negotiating position. Chances are if you're a firm that many of your employees will in fact be OK, implicitly or explicitly, to share the gains from relocating to a cheaper area with your company. If you move to a place where you have 20K lower expenses, it's reasonable to think you'll share some of that with your employer, if only because you find it inconvenient to find a new one.
It is of course true that you're as useful to the company as before, but it's a poker game. It's perfectly fine for you to insist on the same pay, but you'll have to run the gauntlet of your employer calling your bluff.
I foresee more movement on this issue. Different firms will try different policies, and different employees will try different jobs. We'll get some moves to read about shortly, once this has played out a bit. One thing is for instance simply representing you live somewhere other than where you spend your time.
Someone is going to find a friend in central London, NYC, or SF, and swap addresses with them. For instance if I live with my family in the suburbs, I could "swap" with some younger person living in town centre, and give them a piece of the action instead of my employer.
I already get location based pay. My collegues in the US (I'm in the Netherlands) make about 1.5 times my salary. Ok, they need to buy an expensive house in an expensive neighborhood so their kids can go to a good enough school. He also need expensive healthcare, and even then, when he gets cancer he needs significant savings. Our schools are just all fine, and when you get sick, you just get help.
My colleagues here in the Netherlands do make the same, whether they are living in Amsterdam or a small village. So I guess location based pay is also about where you draw some lines.
Anyway, if my boss would tell me I'd be getting less when I move to somewhere cheaper, I'd say: Ok, bye! Next job. In another country, hmm, not so sure.
My colleagues here in the Netherlands do make the same, whether they are living in Amsterdam or a small village. So I guess location based pay is also about where you draw some lines.
Anyway, if my boss would tell me I'd be getting less when I move to somewhere cheaper, I'd say: Ok, bye! Next job. In another country, hmm, not so sure.
From my experience working remote, there are two intertwining issues. Should geography factor into an employee's pay? And how much should pay differ in different geography?
My answer to the first is yes. The second however is a bit more nuanced.
The first case is when employers find the best and brightest talent from all around the world and expect these employees to work together and deliver similar value. In this case I think globally fixed base salary * a cost of living index multiplier capped at 10-15% difference makes the most sense. You don't want the pay discrepancy here to be too large as these people work together on the same level. For example, using local market rates, a Bay Area employee will likely earn double someone in the EU for the same role.
The second case is when employers want to outsource work to a cheaper labor market. In this case, expectation is that the workers will not be of equal skill and/or the work can be done with little training. Another way to look at this, the relationship is more hierarchal. The HQ is managing the remote worker for work for example. In this case I think a competitive pay relative to the location's market rate make sense.
My answer to the first is yes. The second however is a bit more nuanced.
The first case is when employers find the best and brightest talent from all around the world and expect these employees to work together and deliver similar value. In this case I think globally fixed base salary * a cost of living index multiplier capped at 10-15% difference makes the most sense. You don't want the pay discrepancy here to be too large as these people work together on the same level. For example, using local market rates, a Bay Area employee will likely earn double someone in the EU for the same role.
The second case is when employers want to outsource work to a cheaper labor market. In this case, expectation is that the workers will not be of equal skill and/or the work can be done with little training. Another way to look at this, the relationship is more hierarchal. The HQ is managing the remote worker for work for example. In this case I think a competitive pay relative to the location's market rate make sense.
Pointing out the difference in our thinking is great. I appreciate that.
There are a couple problems.
The inequity of wages in Asia to those in "the West" are a temporary artifact that is slowly receding. Wages have been rising as has cost of living.
Location based pay says, I see you reduced your costs and I want to capture your increased profits. Increased efficiency is a normal mechanism for businesses to increase profits but you're an individual and you don't get to do that. More raw: I think I can get away with giving you less.
It reflects a growing problem in our society, that we are pulling up ladders to prosperity by reinforcing natural dynamics to exacerbate them (i.e. bigger slice). Often we're doing so in ways that reduces additive economic outcomes (i.e. smaller pie).
The challenge with location based pay is that this makes the offered salary less competitive and the labor more competitive. This increases the probability of turnover so those costs eat up the gained efficiency. However, the losses are booked in an illegible manner which allows them pay reducer's biases to avoid noticing them.
There are a couple problems.
The inequity of wages in Asia to those in "the West" are a temporary artifact that is slowly receding. Wages have been rising as has cost of living.
Location based pay says, I see you reduced your costs and I want to capture your increased profits. Increased efficiency is a normal mechanism for businesses to increase profits but you're an individual and you don't get to do that. More raw: I think I can get away with giving you less.
It reflects a growing problem in our society, that we are pulling up ladders to prosperity by reinforcing natural dynamics to exacerbate them (i.e. bigger slice). Often we're doing so in ways that reduces additive economic outcomes (i.e. smaller pie).
The challenge with location based pay is that this makes the offered salary less competitive and the labor more competitive. This increases the probability of turnover so those costs eat up the gained efficiency. However, the losses are booked in an illegible manner which allows them pay reducer's biases to avoid noticing them.
The reason companies are paying people less when they move is because they are declaring a pay cut to their staff and the staff are saying "oh, okay".
If a customer started paying me less than our previously agreed rate, I would stop working for them, and find a different customer.
Employment is no different. Don't get screwed every single time your employer tries to screw you.
If a customer started paying me less than our previously agreed rate, I would stop working for them, and find a different customer.
Employment is no different. Don't get screwed every single time your employer tries to screw you.
Should your pay be reduced if you move somewhere cheaper? Well, like everything else, the market gets to decide. So the answer is probably “yes” because of market pressure.
Like my father used to say in his own version of English, “you don’t get nothin’ for nothin’”.
Like my father used to say in his own version of English, “you don’t get nothin’ for nothin’”.
"If I worked remotely for Facebook and wanted to move somewhere central where rents are three times higher, would Zuck give me a raise? Somehow I doubt it."
I can't speak for Zuck, but Sundar does. I work for Google. We also have local market indexed compensation (which I support, but not relevant to this point). If you move to a city with higher labor prices, you get paid more. I've seen it multiple times with people in my team. It's a total non issue, just paperwork. Very very standard.
I can't speak for Zuck, but Sundar does. I work for Google. We also have local market indexed compensation (which I support, but not relevant to this point). If you move to a city with higher labor prices, you get paid more. I've seen it multiple times with people in my team. It's a total non issue, just paperwork. Very very standard.
That's not really what I meant though. I don't work for Google, but I imagine their "local market-indexed compensation" assigns a single weighting to London, even though the CoL within London varies by an order of magnitude (at least in terms of rent) depending on where exactly you live. If we take the location-based pay argument to its logical extreme, why introduce an upper limit?
(Yes, I know it's not really this simple. Just trying to provide some food for thought.)
(Yes, I know it's not really this simple. Just trying to provide some food for thought.)
> Why? My value to the company hasn’t changed!
Of course it has. Go read the definition of "value". It's the market price, or a fair return or equivalent value, relative worth, etc.
You are literally less valuable if you work in some podunk town where cost of living is half. They pay you more to work in SF because in SF you're more valuable. Because it's a market full of other engineers who all demand (and will actually get) more pay. The company would love to devalue you, but they can't in SF.
You have to remember that they aren't paying you relative to your worth to the products. They're paying you relative to the costs necessary to produce the products. They want to reduce those costs, and so they will reduce those costs. One of those is paying the market rate for an engineer. Paying over the market rate is just throwing away money.
Of course it has. Go read the definition of "value". It's the market price, or a fair return or equivalent value, relative worth, etc.
You are literally less valuable if you work in some podunk town where cost of living is half. They pay you more to work in SF because in SF you're more valuable. Because it's a market full of other engineers who all demand (and will actually get) more pay. The company would love to devalue you, but they can't in SF.
You have to remember that they aren't paying you relative to your worth to the products. They're paying you relative to the costs necessary to produce the products. They want to reduce those costs, and so they will reduce those costs. One of those is paying the market rate for an engineer. Paying over the market rate is just throwing away money.
I suspect while most companies say location based pay is based on cost of living, this is not actually true.
Amazon is quite upfront about this, they pay based on cost of labor. I.e they pay what they need to get the staff they want in that area.
Amazon is quite upfront about this, they pay based on cost of labor. I.e they pay what they need to get the staff they want in that area.
And cost of living is only one factor feeding into cost of labor. Tech companies tend to pay more in the Bay Area because, if they didn't, they'd have trouble hiring people. But they're probably not going to pay the same amount because someone chooses to live in Aspen.
I honestly don't expect big changes--20% adjustments don't really qualify as "big." All the data I've seen suggests that most people will likely remain within at least a 1-2 day/week commute into an office.
I honestly don't expect big changes--20% adjustments don't really qualify as "big." All the data I've seen suggests that most people will likely remain within at least a 1-2 day/week commute into an office.
One thing about this is that the money saved by paying employees less, goes into someone’s pocket. Senior management, or the owner. Some people will benefit massively from this. And don’t forget zero office costs since everyone is remote. I’d also expect to see coworking spaces in some of the larger towns to be thing soon too.
Even if nobody is going to the office, it isn't free.
If this continues, expect to see a lot of high-paying jobs leave high earning markets like San Fran and New York as pay decreases to meet lower cost cities and countries. Working from a lower cost area could be all the market supports in a few years.
>Working from a lower cost area could be all the market supports in a few years.
At which point, SF and NYC would be low cost areas as well. This won't happen for various reasons but real estate is determined by demand of which employment opportunities are a big component outside of resort communities and similar.
At which point, SF and NYC would be low cost areas as well. This won't happen for various reasons but real estate is determined by demand of which employment opportunities are a big component outside of resort communities and similar.
The article talks about fairness. But there is much more sides to fair salaries. I wrote about it some time ago
"The reason for discontent and thoughts about unfairness is that people have very different ideas about what is fair. They base salary fairness on different things. Some think it’s fair to base salary on past performance, current performace, past performance and future potential, needs, equality, experience or current market demand."
https://svese.dev/fairness-in-salaries/
"The reason for discontent and thoughts about unfairness is that people have very different ideas about what is fair. They base salary fairness on different things. Some think it’s fair to base salary on past performance, current performace, past performance and future potential, needs, equality, experience or current market demand."
https://svese.dev/fairness-in-salaries/
Market demand is the correct answer. None of us would be making six figures if not for the other nearby employers who would like to hire us. Before the web happened, we were paid like accountants.
> If you hire engineers when the market for engineers is tight, you might overpay compared to your existing employees. A Junior developer might end up with a higher salary than your senior guys.
It's on you to know how much your competitors might offer to lure away your senior devs, and deter it. If you wait for them to negotiate, you might lose some of them.
> If you hire engineers when the market for engineers is tight, you might overpay compared to your existing employees. A Junior developer might end up with a higher salary than your senior guys.
It's on you to know how much your competitors might offer to lure away your senior devs, and deter it. If you wait for them to negotiate, you might lose some of them.
Yes I try to convince people to have better salaries without the employees demanding them.
It doesn't make sense for remote workers to be paid based on location. But that doesn't mean remote workers should be paid as much as those who are working in the office in SF.
At the end of the day its supply/demand. When everyone worked in an office supply of great developers was limited. If you're remote suddenly the pool is larger. People used to live in low COL for other reasons not just cost.
You can argue that all the best developers used to live in the Bay Area, and if those people are distributed across the country the supply is the same.
At the end of the day its supply/demand. When everyone worked in an office supply of great developers was limited. If you're remote suddenly the pool is larger. People used to live in low COL for other reasons not just cost.
You can argue that all the best developers used to live in the Bay Area, and if those people are distributed across the country the supply is the same.
Location is simply a convenient cudgel. It would be just as defensible to trot out family size based pay (greater pay for more mouths) or net worth based pay (greater pay for lesser existing privilege) or the like.
Location just gets those in power what they want: higher personal comp and lower employee salaries.
Location just gets those in power what they want: higher personal comp and lower employee salaries.
I agree.
This is the same industry that formed a "wage-fixing cartel" against their own developers and engineers.
I'm sure that they will do anything they think they can get away with.
https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
> The defendants are Adobe, Apple Inc., Google, Intel, Intuit, Pixar, Lucasfilm and eBay, all high-technology companies with a principal place of business in the San Francisco–Silicon Valley area of California.
Pando had a story about the scope of the fraud:
> "Revealed: Apple and Google's wage-fixing cartel involved dozens more companies, over one million employees"
> Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees.
https://pando.com/2014/03/22/revealed-apple-and-googles-wage...
There's a lot more coverage: https://pando.com/tag/techtopus/
This is the same industry that formed a "wage-fixing cartel" against their own developers and engineers.
I'm sure that they will do anything they think they can get away with.
https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...
> The defendants are Adobe, Apple Inc., Google, Intel, Intuit, Pixar, Lucasfilm and eBay, all high-technology companies with a principal place of business in the San Francisco–Silicon Valley area of California.
Pando had a story about the scope of the fraud:
> "Revealed: Apple and Google's wage-fixing cartel involved dozens more companies, over one million employees"
> Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees.
https://pando.com/2014/03/22/revealed-apple-and-googles-wage...
There's a lot more coverage: https://pando.com/tag/techtopus/
I think that the optics of “location based pay” are going to kill the concept in name but not in reality.
Nike doesn’t offer “location based pay” in its factories. It doesn’t tell people in Bangladesh that they will be paid 20x as much in San Francisco, because they won’t be.
Companies will open engineering offices in say Texas or Florida and say “the job is software engineering. It pays $80k a year, not $280k. Take it or leave it” and eventually through attrition or “incredibly difficult decisions” end up closing down the San Francisco offices.
Nike doesn’t offer “location based pay” in its factories. It doesn’t tell people in Bangladesh that they will be paid 20x as much in San Francisco, because they won’t be.
Companies will open engineering offices in say Texas or Florida and say “the job is software engineering. It pays $80k a year, not $280k. Take it or leave it” and eventually through attrition or “incredibly difficult decisions” end up closing down the San Francisco offices.
[deleted]
Location based pay adjustments will stop being a thing when competition for remote workers will justify it. Companies want location-based pay because they can get away with it: either they think office-first will return, or they think more workers from cheaper areas will be available, so no need to pay more. Whether this will happen remains to be seen. Personally, I think location-based pay will fail to attract top talent, so it'll diminish in prevalence over time. But my conjecture is as good as yours.
But that's always been the case. I worked remotely in a 3rd world country for $1500 a month, then moved to SV and saw my salary magically sextuple, for the same exact job.
The remote tech workers and manufacturing labourers compared in the article are both still subject to the same market forces.
Remuneration is the equilibrium of what a company is willing to buy at and what the worker is willing to sell at. A worker will want a higher price and a company will want a lower price. If they agree at an equilibrium then an employment contract is signed.
Manufacturers have leverage to lowball the salaries of workers because if a worker declines to sell their labour at a low price, then the company can likely find other sellers because there is a large supply of unskilled labour.
But if the supply of a specialised labourer is limited and the company really needs it, then the company has to consider more carefully if they want to pass on the deal or if they want to buy the labour at a higher price.
If Facebook now chooses to pay lower salaries based on the cost of living of a worker's location, then that is their risk to take as they'll open themselves up to more competition. It's up to the remote worker to decide if they want to sell their labour to Facebook at that price or if they're comfortable to decline and look at their other options, which depends on the demand for remote workers of their particular skill set.
Remuneration is the equilibrium of what a company is willing to buy at and what the worker is willing to sell at. A worker will want a higher price and a company will want a lower price. If they agree at an equilibrium then an employment contract is signed.
Manufacturers have leverage to lowball the salaries of workers because if a worker declines to sell their labour at a low price, then the company can likely find other sellers because there is a large supply of unskilled labour.
But if the supply of a specialised labourer is limited and the company really needs it, then the company has to consider more carefully if they want to pass on the deal or if they want to buy the labour at a higher price.
If Facebook now chooses to pay lower salaries based on the cost of living of a worker's location, then that is their risk to take as they'll open themselves up to more competition. It's up to the remote worker to decide if they want to sell their labour to Facebook at that price or if they're comfortable to decline and look at their other options, which depends on the demand for remote workers of their particular skill set.
Who are we to complain? Location-based pay is 80% political because immigration law keeps the majority of the world's people from immigrating to countries with better human rights laws than their own. The U.S. fought a civil war over the biggest human rights abuse (slavery) so I'd say it's worth complaining about.
Disparity of human rights is arbitraged by national governments in free trade (ever wonder why free trade and not free movement?) agreements to allow profit at the national levels on both sides. That explains $10 T-shirts.
The reason that SV in particular currently has insane income disparity is because online advertising is a very inefficient market and FB and Google can still afford to set arbitrary de-facto salaries for tech workers. There is a mix of other market disruption and speculative investing that helps to keep the whole thing afloat. The trend in a healthy market should be for tech salaries to normalize with the rest of the world.
Disparity of human rights is arbitraged by national governments in free trade (ever wonder why free trade and not free movement?) agreements to allow profit at the national levels on both sides. That explains $10 T-shirts.
The reason that SV in particular currently has insane income disparity is because online advertising is a very inefficient market and FB and Google can still afford to set arbitrary de-facto salaries for tech workers. There is a mix of other market disruption and speculative investing that helps to keep the whole thing afloat. The trend in a healthy market should be for tech salaries to normalize with the rest of the world.
Before remote working becomes a trend recently, location-based pay is just a result of price being determined by supply and demand, plus the fact that location is a major constraint for both job seeking and recruiting. For anyone believes their work has intrinsic value, if you try to calculate this value into a number (salary), ultimately you need to use some kind of market reference (Like, I am able to get an offer of $xxxx from another company). This market reference is heavily based on location if remote work isn't a viable option to you.
Now, why do companies still stick to location-based pay when many other companies are embracing remote work? I think that's just cultural inertia and eventually software engineers will be paid without taking their location into account. But that's not a good thing for everyone, because the salary at that point will probably be much lower than what people get paid in SF area today.
Now, why do companies still stick to location-based pay when many other companies are embracing remote work? I think that's just cultural inertia and eventually software engineers will be paid without taking their location into account. But that's not a good thing for everyone, because the salary at that point will probably be much lower than what people get paid in SF area today.
>Why? My value to the company hasn’t changed! I am still worth the same amount as I was before! The only thing that changed is where I choose to reside. What difference is that to the company?
it did change a lot. Most low COL locations are the locations with comparatively bad job market and that means that by moving to such a low COL you're chaining yourself to that nicely paying remote job. You wouldn't risk to argue with your boss, to insist on your opinion, etc. and instead you're more probably going to become a complacent long-term employee, more and more becoming kind of office dead weight with each year. Different mindset makes a different engineer. Getting $600K at FB in SV is just getting your appetite wet, you're thinking about bigger things while getting the same $600K while living deep in Montana - well, it is a retirement, you've made it.
it did change a lot. Most low COL locations are the locations with comparatively bad job market and that means that by moving to such a low COL you're chaining yourself to that nicely paying remote job. You wouldn't risk to argue with your boss, to insist on your opinion, etc. and instead you're more probably going to become a complacent long-term employee, more and more becoming kind of office dead weight with each year. Different mindset makes a different engineer. Getting $600K at FB in SV is just getting your appetite wet, you're thinking about bigger things while getting the same $600K while living deep in Montana - well, it is a retirement, you've made it.
I don't really understand why we're talking about this. There's not any realistic regulatory approach to preventing companies from paying based on CoL. And absent such regulation, the market forces are far too powerful to be counteracted by internet comments, no matter how strident.
The concept of a “profession” or “field” is, properly speaking, meaningless, because every situation is slightly different. What is, then, this concept we have of what a fair wage ought to be for any given group of people with a similar occupation? I would guess that the concept of fair wages is a rudimentary, and emotion-based, form of unionization. If everybody can’t help but feel upset about something which is “unfair”, this is, in effect, a form of collective action – a sort of union you can’t help but be a member of.
In this light, the idea of a location-based pay can be seen as a simple hack to neutralize this de-facto union. If people otherwise aren’t unionized, this hack gives employers back the sole power in the employer-employee relationship, which was what employers wanted from the start.
In this light, the idea of a location-based pay can be seen as a simple hack to neutralize this de-facto union. If people otherwise aren’t unionized, this hack gives employers back the sole power in the employer-employee relationship, which was what employers wanted from the start.
People are vastly underselling the risk associated with remote work. As someone who works with remote workers and developers from the developing world, the idea that companies can just outsource all of this work is a bit of a pipe dream, at least now.
Throughout my career I've had recruiters attempt to get me to produce a "salary history". My polite way of telling them to go fuck themselves is to say "It's none of your business and it doesn't matter: This is my price and if you're not willing to pay it then we're done here." Still get the job offer probably four times out of five. There is no world in which telling them this info can be used for any purpose other than to attempt to pursuade you to take an offer for less money. Location-based pay is the same thing in a different wrapper and my response to it is the same.
If I was asked for that kind of info I'd hang up the phone. Recruiters (in the UK here) may ask what you're currently getting paid, but you'll never be asked to prove it. That's when you inflate the number to what you expect, or something in line with the market, taking some care not to be completely ridiculous about it.
A good recruiter will try and negotiate up on your behalf, especially if their agency's fee and their commission is based on a percentage.
A good recruiter will try and negotiate up on your behalf, especially if their agency's fee and their commission is based on a percentage.
Yep. But not one recruiter in ten is good.
I think we should go a step further. Companies should audit all of the expenses of their employees, because it's not just people living in a low COL area: It's people living in the same high COL area but still living way below their means. Why should a company have to pay an employee who chooses to live in a $2k apartment the same as one across town who pays $3k? And food, or cars... Pets... Kids.... If you choose not to have additional expenses, why should a company pay you so much more than it costs you to live? Want to save 10% of your salary each month? Too bad, company policy says 5% is the max. /S
One of the main problems here is that the companies have absolutely no idea how much an employee is valuable to them, or at best not until they have been working there for several years, and even then only in vague terms.
Since gitlab does location base pay I should ask them for location based price. Oh wait i'ts the same for everyone!
One thing I rarely see addressed in these discussions is the effect that tech salaries have on cost of living generally, and how that affects tech hubs and the communities they take root in. My city (Seattle) has long been Microsoft adjacent and not quite as long home to other tech behemoths. But the real tech boom here has drastically increased the cost of living and I’ve heard similar stories from other cities.
It’s already a burden for many of the people I know who work in the service industry or other lower paid jobs that don’t scale with median income. I’ve seen one major wave of gentrification push out families who’d been in their neighborhoods for generations, and I can’t imagine the impact it would have if Seattle tech workers distorted the market with SV salaries, all else being equal.
It’s not that I don’t want everyone to be paid their value, and I’m glad there’s increasingly an openness to more transparent wage information geographically. But I think something important is missing in the conversation and I think it could also be important to tech workers when negotiating their own comp: solidarity isn’t just looking out for one another, it’s also looking out for oneself.
I could imagine the fight against location based pay being a lot more effective if the fight was part of a coalition that supports and coordinates with much less privileged workers who are far more affected by huge capital influx in their communities.
It’s already a burden for many of the people I know who work in the service industry or other lower paid jobs that don’t scale with median income. I’ve seen one major wave of gentrification push out families who’d been in their neighborhoods for generations, and I can’t imagine the impact it would have if Seattle tech workers distorted the market with SV salaries, all else being equal.
It’s not that I don’t want everyone to be paid their value, and I’m glad there’s increasingly an openness to more transparent wage information geographically. But I think something important is missing in the conversation and I think it could also be important to tech workers when negotiating their own comp: solidarity isn’t just looking out for one another, it’s also looking out for oneself.
I could imagine the fight against location based pay being a lot more effective if the fight was part of a coalition that supports and coordinates with much less privileged workers who are far more affected by huge capital influx in their communities.
The issue is that Seattle and other tech hubs just don’t keep up with demand to move to the city. That’s why prices are going up. Supply is limited for housing. If they increased the density, it wouldn’t have seen such a dramatic spike.
We can’t keep up with demand. There’s constant construction everywhere. It’s been a running joke for years that if you try to walk/ride/bus/drive anywhere you’ll encounter a new development each time.
Sure, some of the problem is that the new developments are almost all too expensive for current residents but I’m not sure how you deal with that. The common wisdom is more vacancies lead to a renter’s market but it hasn’t panned out. To the extent there are vacancies they’re all investment properties.
It’s overly simplistic to say build more housing.
Sure, some of the problem is that the new developments are almost all too expensive for current residents but I’m not sure how you deal with that. The common wisdom is more vacancies lead to a renter’s market but it hasn’t panned out. To the extent there are vacancies they’re all investment properties.
It’s overly simplistic to say build more housing.
[deleted]
A thought I recently had about all this:
Let's rewind two years. You work for a company that's headquartered in San Francisco. You live in Texas, in one of the suburbs of Dallas, as part of the company's small, but substantial, remote workforce. You've been paid well, but less than you'd be paid for the same position if you lived in San Francisco.
Now fast-foward to the present day. Many of your coworkers have moved out of SF to lower-cost areas. Your company has decided to adopt a location-based pay system. You look at the charts HR has put together, and find that if someone who currently lives in SF wants to move to your town, they'd get a 15% pay cut.
You think about this in reverse. You've wanted to live in SF for a while, but were turned off by high rents. SF rents have been down a bit because of COVID, and you want to give it a try. You contact HR and ask them if you were to move to SF, would you get an automatic pay raise due to the new location-based pay policy.
What does your company say? My guess would be they'd say no. They try to justify it by saying that there's no headcount available for hires in SF right now. But of course there's no "headcount" specifically allocated for people who want to move out of SF, but those employees are still free to move where they please, more or less.
So, big surprise: the "location-based pay" only applies when it benefits the employer.
Let's rewind two years. You work for a company that's headquartered in San Francisco. You live in Texas, in one of the suburbs of Dallas, as part of the company's small, but substantial, remote workforce. You've been paid well, but less than you'd be paid for the same position if you lived in San Francisco.
Now fast-foward to the present day. Many of your coworkers have moved out of SF to lower-cost areas. Your company has decided to adopt a location-based pay system. You look at the charts HR has put together, and find that if someone who currently lives in SF wants to move to your town, they'd get a 15% pay cut.
You think about this in reverse. You've wanted to live in SF for a while, but were turned off by high rents. SF rents have been down a bit because of COVID, and you want to give it a try. You contact HR and ask them if you were to move to SF, would you get an automatic pay raise due to the new location-based pay policy.
What does your company say? My guess would be they'd say no. They try to justify it by saying that there's no headcount available for hires in SF right now. But of course there's no "headcount" specifically allocated for people who want to move out of SF, but those employees are still free to move where they please, more or less.
So, big surprise: the "location-based pay" only applies when it benefits the employer.
Location based pay for "in-person" jobs makes sense. You are trying to convince a person to live and work in a specific locale and the requires different amounts of money depending on the location. But for jobs which are fully remote, the pay should be the same regardless of where you live.
If a person wants to live in Thailand so they can save more of their paycheck vs living in NYC where they could enjoy city life, that is a tradeoff for the employee to make and the employer should not care.
If a person wants to live in Thailand so they can save more of their paycheck vs living in NYC where they could enjoy city life, that is a tradeoff for the employee to make and the employer should not care.
Virtually even doing software engineering is thriving from location based pay. If you are in a rural mud hut in a poor country you don’t even get to write code and if you are in the US you get six figures absolute minimum. People only get offended when one company pays two salaries across locations —- not when two different companies set up entirely different businesses based on locational wage, keeping software engineering in San Francisco and sweatshops in the Philippines.
If I ask for a raise because I just had a kid, my boss rightly tells me my personal life is the company's respinsibility, my personal life isn't a basis for my pay.
When he whines about how difficult it will be to replace you when you leave, remind him that management’s failure to plan isn’t your personal responsibility.
Maybe not, but this is reasonably similar to expecting paid paternity leave, something that is common (and mandatory) in many countries.
I was more aiming for, "If my personal life isn't a basis for a pay raise, it's damn sure isn't a basis for a pay cut".
I just reject WFH out of hand for these reasons.
If the culture of software development remains primarily WFH, and it becomes too onerous for me to find a job that's actually an in-person, in-office role, I'll just leave, wasting all of the experience I've built up and contributing further to the supply issues.
It's just sad. Terribly sad. You want to sit at home and only look at a screen - that's cool, enjoy your dystopia. I'm out, I don't need this shit.
If the culture of software development remains primarily WFH, and it becomes too onerous for me to find a job that's actually an in-person, in-office role, I'll just leave, wasting all of the experience I've built up and contributing further to the supply issues.
It's just sad. Terribly sad. You want to sit at home and only look at a screen - that's cool, enjoy your dystopia. I'm out, I don't need this shit.
Another comment brought up optionality, and that's certainly part of it for big companies -- so much of how much you're paid is directly related to their perception of your own optionality and how you and others like you bucket into their leveling system to keep the buckets full enough.
For smaller companies, I think fungibility is another way to look at it. Fungibility is sort of taken for granted at big companies because it needs to be there to grow past a certain size without imploding. But small companies can make a lot of money by accepting non-fungibility and keeping total headcount minimal.
What I think this means is that they'll probably be a lot more inclined to dismiss location-based pay because for a growth inclined company, it's basically a rounding error in their cost benefit analysis. You need capable people to do stuff /and/ work well with other people, it's hard to find them anywhere (even if you're looking globally). If someone's doing good work and you want to pay them more to incentivize them, it's not going to be a huge pain to get that checkbook control and the CEO is likely to implicitly sign off on it. The same can't be said for big companies.
For smaller companies, I think fungibility is another way to look at it. Fungibility is sort of taken for granted at big companies because it needs to be there to grow past a certain size without imploding. But small companies can make a lot of money by accepting non-fungibility and keeping total headcount minimal.
What I think this means is that they'll probably be a lot more inclined to dismiss location-based pay because for a growth inclined company, it's basically a rounding error in their cost benefit analysis. You need capable people to do stuff /and/ work well with other people, it's hard to find them anywhere (even if you're looking globally). If someone's doing good work and you want to pay them more to incentivize them, it's not going to be a huge pain to get that checkbook control and the CEO is likely to implicitly sign off on it. The same can't be said for big companies.
It's not unfair. It's a voluntary transaction, in which both parties benefit. Both companies and workers have always behaved in a profit-maximizing way.
Voluntary transactions that are profit maximising and benefit both parties can still be unfair.
For instance, most people accept that for the same job and all things being equal you should pay a black/white person the same wage. If there was a job posting that said ‘we pay this skin colour X and this skin colour Y because according to our analysis people with darker skin tones are willing to accept a lower wage’ there would rightfully be outrage. It would be unfair, while being a voluntary transaction which is profit maximising and in which both parties benefit.
I know you aren’t arguing for that though - we accept as a society that we shouldn’t pay people different based on race, but lots of people do believe that we should pay people differently based on where they were born and what visa status they hold. I personally think this view will change over time as globalisation and remote working continues.
For instance, most people accept that for the same job and all things being equal you should pay a black/white person the same wage. If there was a job posting that said ‘we pay this skin colour X and this skin colour Y because according to our analysis people with darker skin tones are willing to accept a lower wage’ there would rightfully be outrage. It would be unfair, while being a voluntary transaction which is profit maximising and in which both parties benefit.
I know you aren’t arguing for that though - we accept as a society that we shouldn’t pay people different based on race, but lots of people do believe that we should pay people differently based on where they were born and what visa status they hold. I personally think this view will change over time as globalisation and remote working continues.
Some volontary transactions are nonetheless illegal, because to allow them would negatively affect society as a whole. The usual example is that it is not legal (as it once was) to sell yourself into slavery. Also, overly onerous contracts can (in many jurisdictions) not be enforced.
Simply put, “It's a voluntary transaction” can never be a sufficient argument for why something ought to be legal.
Simply put, “It's a voluntary transaction” can never be a sufficient argument for why something ought to be legal.
It's interesting you bring up slavery.
I think I should be allowed to sell myself or kill myself if I wanted to. I certainly don't want society or a government to regulate on that.
Eg. I'd rather be a slave than starving on the road, I'd rather be dead than in some particular irreversible painful medical condition.
The only actions which are ethically wrong in my book are hurting someone else or damaging / stealing their property. Incidentally the government breaks these rules legally everyday (eg. taxation, wars, spying on people).
Eg. I'd rather be a slave than starving on the road, I'd rather be dead than in some particular irreversible painful medical condition.
The only actions which are ethically wrong in my book are hurting someone else or damaging / stealing their property. Incidentally the government breaks these rules legally everyday (eg. taxation, wars, spying on people).
If it were legal to sell yourself into slavery (as it once was), we know what would happen: A lot of companies would try to push people into the position where people would feel they had no other choice to become slaves, and companies would position themselves to take advantage of this fact. We would then have a permanent class of slaves in the world, which would dehumanize them and gradually freeze the hearts of everybody who was made to interact with this system. We know this would happen because it did happen. And it was a long road for humanity as a whole to get rid of it (and we still haven’t completely).
And you would throw it all away because of some personal libertarian principle? This isn’t only about what you would like to be able to do in any given moment, it’s what this ability does to society as a whole. Your ability to someday be able to sell yourself into slavery has some value (for the principle of the thing, if nothing else), but it is certainly not worth the above-mentioned effects on society.
And you would throw it all away because of some personal libertarian principle? This isn’t only about what you would like to be able to do in any given moment, it’s what this ability does to society as a whole. Your ability to someday be able to sell yourself into slavery has some value (for the principle of the thing, if nothing else), but it is certainly not worth the above-mentioned effects on society.
Location based pay makes some sense when hiring or applying for a job, I live in Denmark, it is pretty expensive here and I charge quite a lot even in my market. If you can't pay my price I can't afford to work for you, partially because of my location.
But let's suppose I am hired, and I decide to move to another location because I am in a position to do so. Basically, the company using location based pay takes out one of the benefits I can derive from moving. Because I work for a company with location based pay I might not be able to move somewhere else until I quit that company! Especially as the company with location based pay probably isn't calculating in the expenses of moving, finding new schools, babysitters etc. all the extra stuff you need to do when you move somewhere new, which if you're making a lot of money for that area can be better handled because, guess what, money makes lots of problems more manageable.
So yes if you want to hire me you have to pay me something I can afford and you can afford, but if you want to change my pay based on if I decide to move somewhere cheaper later I don't think I could afford to tie myself to you like that.
But let's suppose I am hired, and I decide to move to another location because I am in a position to do so. Basically, the company using location based pay takes out one of the benefits I can derive from moving. Because I work for a company with location based pay I might not be able to move somewhere else until I quit that company! Especially as the company with location based pay probably isn't calculating in the expenses of moving, finding new schools, babysitters etc. all the extra stuff you need to do when you move somewhere new, which if you're making a lot of money for that area can be better handled because, guess what, money makes lots of problems more manageable.
So yes if you want to hire me you have to pay me something I can afford and you can afford, but if you want to change my pay based on if I decide to move somewhere cheaper later I don't think I could afford to tie myself to you like that.
I have heard about the idea twice during two job interviews. And I closed negotiations immediately. The reason why:
These companies reps told they do it, to prevent inequalities. However this is a straight in your eyes lie. If I will go to Apple in my country, they won't sell it to me two times cheaper that in the US.
But the most important issue for me:
With proper salary I can invest where I live. I can hire people. Create jobs, support for foundations, pay more taxes.
All of this combined helps to lower inequality. When I have to earn less because I am from poor country, it just cements the inequality.
That is why I consider it an offensive lie, and an immediate deal breaker. Actually such companies are immediately blacklisted by me.
Because what they really say is that they want to hire me not because of my skill, but because I am cheap person from a cheap country.
It is not only about me. But also about employees from their countries. How should I feel if a company explicitly tells that it will fire local skilled professional to replace him with cheaper me. He has family too. It is not kind of a deal that interests me at all.
These companies reps told they do it, to prevent inequalities. However this is a straight in your eyes lie. If I will go to Apple in my country, they won't sell it to me two times cheaper that in the US.
But the most important issue for me:
With proper salary I can invest where I live. I can hire people. Create jobs, support for foundations, pay more taxes.
All of this combined helps to lower inequality. When I have to earn less because I am from poor country, it just cements the inequality.
That is why I consider it an offensive lie, and an immediate deal breaker. Actually such companies are immediately blacklisted by me.
Because what they really say is that they want to hire me not because of my skill, but because I am cheap person from a cheap country.
It is not only about me. But also about employees from their countries. How should I feel if a company explicitly tells that it will fire local skilled professional to replace him with cheaper me. He has family too. It is not kind of a deal that interests me at all.
My initial reaction is that companies pay money to accomplish two things only 1) acquire you 2) keep you. Since you're already working there, they don't need to worry about (1), so then they just need to lower your salary just enough that it's not worth it for you to switch, with a calculation for how much it would piss you off.
You see this already all the time, where new hires get higher starting salaries than experienced employees are getting. And then once you're in, some companies don't even bother to give inflation raises.
The industry average tenure is 4 years (and probably even less depending on your region). Maybe that can be doubled or tripled based on salary, but only if you're offering FAANG level golden handcuffs. If someone is going to switch jobs at some point regardless of a 10% bump, then you might as well just give them nothing, or cut their salary. And then i might imagine further that retention rates are already well know to plummet for those who switch to remote and move to a different city.
You see this already all the time, where new hires get higher starting salaries than experienced employees are getting. And then once you're in, some companies don't even bother to give inflation raises.
The industry average tenure is 4 years (and probably even less depending on your region). Maybe that can be doubled or tripled based on salary, but only if you're offering FAANG level golden handcuffs. If someone is going to switch jobs at some point regardless of a 10% bump, then you might as well just give them nothing, or cut their salary. And then i might imagine further that retention rates are already well know to plummet for those who switch to remote and move to a different city.
I was in this boat a little bit, working remotely for someone in an expensive city. Initially I was paid a little bit less, and probably still am, but not that much. But anyway, at one point my counter argument was: location is not the only factor. If you're not going to compensate people based solely on their performance, then you also need to include other factors, not only their location because it's not the only expense in life. One can have rich parents, and the other parents that need support, etc. One can be a single person, the other can have six kids. You can go on and on. If you go that road it will be hard to figure out any compensation because there are too many individual factors.
One other thing is: a company operating in an expensive market will itself be expensive. When they start paying the workers less, I doubt they will become less expensive. Basically somebody will just pocket this difference, most likely few at the expense of many.
One other thing is: a company operating in an expensive market will itself be expensive. When they start paying the workers less, I doubt they will become less expensive. Basically somebody will just pocket this difference, most likely few at the expense of many.
Please, for the love of anything meaningful, read a book about negotiation before trying to sound this stuff out.
If you accept the term "location based pay," you have basically handed your wallet to the "wallet inspector," and you are being hustled. It's just like "policy," or "pay scale," they are utter bullshit if you have something of value. The media people who write articles about whether "location based pay, is it good?" are literally just 20-something bloggers with zero life experience trying to get published, and their editors and publishers have a stake in promoting the idea that your work should be cheaper.
If you want to pay me based on location, I'm going to charge you based on location, because I know what kind of prima donnas people from the bay area <or insert region> can be and I charge a risk premium for having to put up with their nonsense. If that sounds offensive, why should using their perception of my housing situation as leverage be legit?
If you are looking at a role, you need a clear idea of the total comp you are looking for as a part of your own plan for your life. Comp isn't a reward for good behaviour unless you are a prisoner begging guards for privileges or an animal doing tricks for treats - it's earned from value. When an HR person tells you what they want to pay you, say, "that's interesting, thank you, here is the data I have on what this role looks like from sources x, y, z, and these are the criteria I am using to evaluate the total package value." Those X, Y, and Z sources and references are things I've written about here before.
Please, please, please, if you write code, read a book on negotiation.
If you accept the term "location based pay," you have basically handed your wallet to the "wallet inspector," and you are being hustled. It's just like "policy," or "pay scale," they are utter bullshit if you have something of value. The media people who write articles about whether "location based pay, is it good?" are literally just 20-something bloggers with zero life experience trying to get published, and their editors and publishers have a stake in promoting the idea that your work should be cheaper.
If you want to pay me based on location, I'm going to charge you based on location, because I know what kind of prima donnas people from the bay area <or insert region> can be and I charge a risk premium for having to put up with their nonsense. If that sounds offensive, why should using their perception of my housing situation as leverage be legit?
If you are looking at a role, you need a clear idea of the total comp you are looking for as a part of your own plan for your life. Comp isn't a reward for good behaviour unless you are a prisoner begging guards for privileges or an animal doing tricks for treats - it's earned from value. When an HR person tells you what they want to pay you, say, "that's interesting, thank you, here is the data I have on what this role looks like from sources x, y, z, and these are the criteria I am using to evaluate the total package value." Those X, Y, and Z sources and references are things I've written about here before.
Please, please, please, if you write code, read a book on negotiation.
This comment should be pinned every time this topic hits hacker news. People are out here getting scammed by these hiring managers!
Just remember that negotiation has two sides. You're perfectly welcome to go into a negotiation stating that Google pays $X for the equivalent position in Mountain View. And the company you're negotiating with is perfectly able to come back and say they're not Goggle and they're not in Mountain View. Nothing says that two parties need to be able to come to an agreement.
[deleted]
Location-based pay is remarkably offensive, and for the exact reason you state:
> you have basically handed your wallet to the "wallet inspector"
By accepting location-based pay, you concede that your employer has the right to treat you like a child receiving an allowance; that your remuneration is based on the lifestyle that they think is appropriate for you, and not on the market value of your work. But your choice of lifestyle, your needs, etc, are strictly none of their business and it's exceptionally inappropriate for employers to act like your parents. Once you let these people "inspect your wallet," you are establishing an abusive relationship and will get hustled around the clock.
> you have basically handed your wallet to the "wallet inspector"
By accepting location-based pay, you concede that your employer has the right to treat you like a child receiving an allowance; that your remuneration is based on the lifestyle that they think is appropriate for you, and not on the market value of your work. But your choice of lifestyle, your needs, etc, are strictly none of their business and it's exceptionally inappropriate for employers to act like your parents. Once you let these people "inspect your wallet," you are establishing an abusive relationship and will get hustled around the clock.
> and not on the market value of your work
Interesting choice to invoke market value to argue that the salaries that the market has settled on for remote work are too low.
The market value of work isn't the amount of revenue that the work brings in. If you think you can capture the full value of the work you do for yourself, you're always free to work as a solo entrepreneur instead of working a traditional job. That's kind of an upper bound on what the company could pay you, but the market value of the work is based on the number of employees the company needs and the number of qualified employees they can find. Remote work floods the supply with lots more available workers than they can find in any one city, so salaries for those roles go down. That's not treating you like a child, it's just how a market works.
Interesting choice to invoke market value to argue that the salaries that the market has settled on for remote work are too low.
The market value of work isn't the amount of revenue that the work brings in. If you think you can capture the full value of the work you do for yourself, you're always free to work as a solo entrepreneur instead of working a traditional job. That's kind of an upper bound on what the company could pay you, but the market value of the work is based on the number of employees the company needs and the number of qualified employees they can find. Remote work floods the supply with lots more available workers than they can find in any one city, so salaries for those roles go down. That's not treating you like a child, it's just how a market works.
A lot of people on HN scream against location-based pay, because for some reason they assume they'll make more without it. If they live in Europe, or rural America, they might be right. But HN has a highly disproportionate number of Valley and NYC residents. They're all getting [big] pay cuts if you get rid of location-based pay. The biggest (but not only) reason someone in SF makes $250k+ total comp is because it's so expensive to live in SF.
Not too long ago, I remember threads on HN where people were saying that $200k or $250k wasn't enough for a SF dev and using real estate prices and general cost of living as justification. You can't have it both ways - either your general cost of living is taken into account in your salary (location-based pay), or it's not. If it's not, get ready for a market where the average senior developer makes $90-110k/yr, total comp.
Not too long ago, I remember threads on HN where people were saying that $200k or $250k wasn't enough for a SF dev and using real estate prices and general cost of living as justification. You can't have it both ways - either your general cost of living is taken into account in your salary (location-based pay), or it's not. If it's not, get ready for a market where the average senior developer makes $90-110k/yr, total comp.
> But HN has a highly disproportionate number of Valley and NYC residents. They're all getting [big] pay cuts if you get rid of location-based pay. The biggest (but not only) reason someone in SF makes $250k+ total comp is because it's so expensive to live in SF.
I'd argue that this isn't really what location based pay is worried about. In this case, you're being paid specifically be close to some location or collective building because your employer values that collectiveness. That's okay. That's the company communicating "we value the ability for you to be here, in person, with this group of people - so we're going to incentivize it".
The problem with location based pay is when an employer says, "You can work from anywhere you want, but we want to know where that is so we can pay you less". You provide them the same value from mid-city America as you do in rural America. They simply want to pay you less when they can.
I'd argue that this isn't really what location based pay is worried about. In this case, you're being paid specifically be close to some location or collective building because your employer values that collectiveness. That's okay. That's the company communicating "we value the ability for you to be here, in person, with this group of people - so we're going to incentivize it".
The problem with location based pay is when an employer says, "You can work from anywhere you want, but we want to know where that is so we can pay you less". You provide them the same value from mid-city America as you do in rural America. They simply want to pay you less when they can.
This exactly. If they want me to live somewhere specific they should pay me more to live there. If my employer isn't requiring me to love somewhere, I should be compensated for my value and work, not judged for living where and how I choose.
> I should be compensated for my value and work,
No, you are compensated for how much someone doing the same work would demand.
No, you are compensated for how much someone doing the same work would demand.
You are assuming that the employer had many candidates to choose from. Usually, that is not really the case.
Like the original comment said, most programmers probably need to read a book about negotiation so that they can clearly communicate their skills and why they are not easily replaceable. Once you're established as an unique professional with an unique skill mix, you'll be compensated for how much the team to replace you would cost.
Like the original comment said, most programmers probably need to read a book about negotiation so that they can clearly communicate their skills and why they are not easily replaceable. Once you're established as an unique professional with an unique skill mix, you'll be compensated for how much the team to replace you would cost.
You don't need an exact equivalent. You simply need the idea of an equivalent and an idea of the cost/value of such a candidate.
A candidate can't ask for an obviously uncompetitive salary, but they can ask on the high end for what a company expects to pay for an employee.
A candidate can't ask for an obviously uncompetitive salary, but they can ask on the high end for what a company expects to pay for an employee.
Yes, so if we all demand that that isn’t based on where we live we should be fine right?
I don’t understand why pepple keep repeating this. Obviously we are paid what they can get away with. We’re just trying to change what that is. If everyone starts accepting location based pay, we’ll be fucked in the long term.
Or, well. It’s strictly better for me if I get paid SF wages anywhere in the world.
I don’t understand why pepple keep repeating this. Obviously we are paid what they can get away with. We’re just trying to change what that is. If everyone starts accepting location based pay, we’ll be fucked in the long term.
Or, well. It’s strictly better for me if I get paid SF wages anywhere in the world.
A far more likely outcome is that this would converge on being paid something like Prague/Barcelona wages anywhere in the world. (Think 50-75% of Kansas City, Des Moines, Pittsburgh wages today.)
There is, obviously, incredible incentive to defect. If you're going to demand 100% of SF wages, I can improve my lot by demanding 99%. Then the next SWE can undercut me at only 98%, and so on.
There is, obviously, incredible incentive to defect. If you're going to demand 100% of SF wages, I can improve my lot by demanding 99%. Then the next SWE can undercut me at only 98%, and so on.
Yep, both sides have a BATNA
> so we can pay you less
Setting aside that obviously, on an individual level, an employer will typically want to pay you as little as they can get away with, this isn't how location based pay works at a macro level.
Saying "You can work from anywhere you want, but we want to know where that is so we can pay you more" is an equally (in)valid statement since it's about pay distribution.
Setting aside that obviously, on an individual level, an employer will typically want to pay you as little as they can get away with, this isn't how location based pay works at a macro level.
Saying "You can work from anywhere you want, but we want to know where that is so we can pay you more" is an equally (in)valid statement since it's about pay distribution.
Not having it both way is an argument to fairness. You should want fairness in a game of checkers. It was never a thing in employment anyway nor will it be.
A high local real estate price is a reason you can't profitably work for less and its something you can profitably express to an employer if they will take it into account in order to access the local labor market.
A lower local real estate cost is a reason you could work for less not a reason you ought to want to.
You absolutely should try to have it both ways to the greatest extent possible because they are too.
A high local real estate price is a reason you can't profitably work for less and its something you can profitably express to an employer if they will take it into account in order to access the local labor market.
A lower local real estate cost is a reason you could work for less not a reason you ought to want to.
You absolutely should try to have it both ways to the greatest extent possible because they are too.
At the end of the day, it is neither a matter of fairness or formula, it is a market, supply vs demand. If companies switch to remote working from any location, it will be easier to find a cheaper workforce, the equilibrium will go down. If you don’t like the new rate, find an employer that will pay more. If there isn’t one, then the new rate is a fair rate.
I am not sold on full remote working for most companies. I am not even convinced the little covid experiment demonstrated anything, as companies still benefit from employees knowing each others from before the lockdown. Long term the effects in term of productivity, employee morale or culture may be quite different. A compromise is having more local offices, but even then, everywhere I saw it before, it creates a “them” vs “us” between offices, people feel remote from the centres of decision, etc.
I am not sold on full remote working for most companies. I am not even convinced the little covid experiment demonstrated anything, as companies still benefit from employees knowing each others from before the lockdown. Long term the effects in term of productivity, employee morale or culture may be quite different. A compromise is having more local offices, but even then, everywhere I saw it before, it creates a “them” vs “us” between offices, people feel remote from the centres of decision, etc.
To me, the "little covid experiment" kind of validated the value of an office: Situational awareness. Previously, it was so easy to grab a coffee or lunch, and get an overall awareness of who is doing what. I'm still struggling to find a substitute for that.
Not sure why you are downvoted. I observed this as well. One manager hired a few new grads during covid. I spoke with them over Zoom to introduce myself, seemed like really smart and passionate people. One later told me that they are really lonely, managers are rarely there to push them / give them work / check up on them. I bet they feel awkward .. they're barely working, they don't know anyone in the company, and no one really cares about them. Perhaps this is just a symptom of mismanagement but I bet they feel invisible, they're probably asking themselves "why am I here? oh well the paycheque is nice"
I actually agree with you that this is not actually a remote experiment.
But -- and I feel like I'm alone in this -- my personal observation is that even for teams that knew each other before full time WFH I've noticed the teams _mostly_ are not doing new and challenging projects. There's a ton of work and small iterating possible in any company, but I notice all the challenging projects have been punted - or are moving very slowly.
My personal conclusion is that remote work does not, in fact, work well, at least for some types of projects. I can totally see UI-heavy stuff working out, for example, but not embedded or high complexity projects.
But -- and I feel like I'm alone in this -- my personal observation is that even for teams that knew each other before full time WFH I've noticed the teams _mostly_ are not doing new and challenging projects. There's a ton of work and small iterating possible in any company, but I notice all the challenging projects have been punted - or are moving very slowly.
My personal conclusion is that remote work does not, in fact, work well, at least for some types of projects. I can totally see UI-heavy stuff working out, for example, but not embedded or high complexity projects.
A good question is if a local workforce drawn from major hubs of civilization doesn't add value why are tech companies paying so much for it now?
They aren't isolated of course, SV is expensive because SV has money. Rentals go up because people keep paying stupid high rents, property goes up because people CAN afford it. Rent seekers keep pushing their luck and it keeps working.
I have become interested with the real value of software, and how getting rid of stupid high wages could be a great thing for the industry.
As an analogy, if a country has reasonably priced infrastructure workers (laymen and engineers) it can afford to build the infrastructure it's community needs. If you blow your annual budget building 6 miles of train line, you'll never have high speed rail. Real world example: Australia, one of the richest countries in the world, notoriously high infrastructure costs. While the rest of the world is speeding away with high speed rail, we could barely afford a two stop tram extension in the CBD.
Now have a think about all the software that doesn't get written because it's prohibitively expensive to make it, lots of boutique applications for specific needs, or local communities that need software to help with problems in their community. There are probably a lot of companies that could really do with an inhouse software team, but would never entertain the idea on account of the cost.
I have become interested with the real value of software, and how getting rid of stupid high wages could be a great thing for the industry.
As an analogy, if a country has reasonably priced infrastructure workers (laymen and engineers) it can afford to build the infrastructure it's community needs. If you blow your annual budget building 6 miles of train line, you'll never have high speed rail. Real world example: Australia, one of the richest countries in the world, notoriously high infrastructure costs. While the rest of the world is speeding away with high speed rail, we could barely afford a two stop tram extension in the CBD.
Now have a think about all the software that doesn't get written because it's prohibitively expensive to make it, lots of boutique applications for specific needs, or local communities that need software to help with problems in their community. There are probably a lot of companies that could really do with an inhouse software team, but would never entertain the idea on account of the cost.
Many contractor shops have terrible wages yet they charge eye watering prices. You can’t improve the costs here by pushing the worker wages down. All that money is just going to accumulate in jeff bezos bank account
High Speed Rail is not being built because no one is sure it'll be used, whereas expanding public rail in the cities is always going to be expensive because you're renovating around a dense urban area. It's also non-optional - Sydney's traffic problems are bad, and getting worse. We either do something now or watch as the CBD eventually dies.
Public HSR even going out into the sticks gets rapidly surrounded by commercial and residential real estate rent-seekers, and prices quickly (within 10-20 years) arrive close enough to CBD parity to again price out young families. You would need something like a community land trust or transit authority trust that locks up the land and locks in the basis pricing along the rail line about 1-2 km out on either side of the rail, and around a 3-6 km radius around the terminals, with a taxing jurisdiction about double those radii, that gives the families a shot at entry without the same housing pricing dynamics we see now. That trust would have to plan for incremental, systemic densification on a self-funding model based upon the "rent" charged through taxes. Otherwise, the funding for densification evaporates into land developer hands through the years, because it is non-linearly more expensive to densify than spread out, but the energy utilization and efficiency is much lower and higher respectively per capita with densification than spread out. Land developers are valuable, but it is unfair to expect them to behave contrary to their incentives.
Is Australia and HSR really a good example of this? I would think the only viable route would be Sydney-Melbourne, and that seems far enough apart to be directly competing with air travel, likely a major reason for it to be marginal profit-wise.
Also Australian workers are no doubt well paid compared with some, but compared with the U.S. or Western Europe? Taking into account cost of living etc.? Certainly engineers in Australia in general don't seem to be getting SV wages.
Also Australian workers are no doubt well paid compared with some, but compared with the U.S. or Western Europe? Taking into account cost of living etc.? Certainly engineers in Australia in general don't seem to be getting SV wages.
I can confirm, I moved from Seattle to Sydney. It's not even close.
Single data point on new grad s/w engineer salary at small/medium business in Melbourne, circa 2015 ~40k in USD.
we have generally higher wages and prices on the low end (that is, the rest of the population and high minimum wages), and comparatively lower wages compared to the US coasts for tech/stem. That high minimal wage and remoteness affects the price of a lot of things.
That being said, the original poster is a little bit off, as both Sydney and Melbourne have inner-city transport options and infrastructure that outcompete practically all American cities in that regard, and punches pretty damn well on a worldwide basis (behind only a few cities that are notable specifically because they are world leaders).
That being said, the original poster is a little bit off, as both Sydney and Melbourne have inner-city transport options and infrastructure that outcompete practically all American cities in that regard, and punches pretty damn well on a worldwide basis (behind only a few cities that are notable specifically because they are world leaders).
You're right that Melbourne and Sydney infrastructure outcompete pretty much all US cities, but the punching above their weight on a worldwide basis is Australian mythology. I've lived on both and several cities in Europe and Melbourne and Sydney are behind pretty much every big city in Europe and Asia. Public transport for example is absolutely atrocious, the state of the roads are extremely poor...
That reminds me of a story. In 2009 I flew into Sydney with a team of 20 people and 40 duffle bags, and the regional airline to Melbourne refused to check half the luggage despite us having a pre-arranged letter from them stating otherwise. So, a team member and I rented a car, bought a SIM card and several Red Bulls, and drove to Melbourne to join the rest of the team the next morning. With the international flight, that was a very long day!
> You can't have it both ways - either your general cost of living is taken into account in your salary (location-based pay), or it's not.
Cost of living allowance/adjustment (COLA) was a retention strategy originally designed to give workers being transferred overseas and to large metropolitan areas more money, not less. You should do some reading up on HR practices if you want them to stop taking advantage of you.
Cost of living allowance/adjustment (COLA) was a retention strategy originally designed to give workers being transferred overseas and to large metropolitan areas more money, not less. You should do some reading up on HR practices if you want them to stop taking advantage of you.
Was approached by a headhunter for a role in Bratislava for Amazon. They were giving a 'generous' salary of €20k (net) per year (it was a few years ago). The headhunter was desperate and wanted to convince me that "this is a lot of money!!!" (for Bratislava).
My simple counter was that "if I save 20% of my salary per month, I will have 4k in the end of the year. If I take an €60k (net) job in Frankfurt and again I save 20%, I will have 12k". Why would I 'sell myself short' for 8k of savings per year? It only made him angrier because my narrative did not match his sales-pitch. I never got to work for Amazon (or anyone else in Bratislava).
Location matters.
If you want €100k then don't look in Bratislava.
If you want a 'slow calm life' (away from the madness of London/Paris/etc.) go to Bratislava or Ljubljana and be happy with the €40k.
> You can't have it both ways..
No but people love to complain.
PS/Addition: it feels like "bait and switch". It's like hiring me in Bratislava, giving me a small (net) salary and ask me to work from London. I wouldn't accept that. The employee would also feel cheated the other way around. And with that said this is my favorite cities' cost comparison: https://www.numbeo.com/cost-of-living/comparison.jsp
My simple counter was that "if I save 20% of my salary per month, I will have 4k in the end of the year. If I take an €60k (net) job in Frankfurt and again I save 20%, I will have 12k". Why would I 'sell myself short' for 8k of savings per year? It only made him angrier because my narrative did not match his sales-pitch. I never got to work for Amazon (or anyone else in Bratislava).
Location matters.
If you want €100k then don't look in Bratislava.
If you want a 'slow calm life' (away from the madness of London/Paris/etc.) go to Bratislava or Ljubljana and be happy with the €40k.
> You can't have it both ways..
No but people love to complain.
PS/Addition: it feels like "bait and switch". It's like hiring me in Bratislava, giving me a small (net) salary and ask me to work from London. I wouldn't accept that. The employee would also feel cheated the other way around. And with that said this is my favorite cities' cost comparison: https://www.numbeo.com/cost-of-living/comparison.jsp
> it feels like "bait and switch". It's like hiring me in Bratislava, giving me a small (net) salary and ask me to work from London.
Many IT companies in Bratislava hire local people for local salaries... and then make them travel to other countries exactly 49% of the year (so they still pay taxes locally); the remaining 51% of time working for a foreign client remotely from a local office.
My friend had a job where he had to fly to a Western country every Monday morning, and fly back home every Friday evening, to maximize the number of working days within that 49% of the year. (This way you can work abroad for 36 weeks a year, instead of "mere" 26.) And of course he had to spend 8 hours working each Monday or Friday, so he left home on Monday soon after midnight, and arrived home on Friday shortly before midnight, so he basically spent the whole weekend sleeping. (He already quit that job.)
Many IT companies in Bratislava hire local people for local salaries... and then make them travel to other countries exactly 49% of the year (so they still pay taxes locally); the remaining 51% of time working for a foreign client remotely from a local office.
My friend had a job where he had to fly to a Western country every Monday morning, and fly back home every Friday evening, to maximize the number of working days within that 49% of the year. (This way you can work abroad for 36 weeks a year, instead of "mere" 26.) And of course he had to spend 8 hours working each Monday or Friday, so he left home on Monday soon after midnight, and arrived home on Friday shortly before midnight, so he basically spent the whole weekend sleeping. (He already quit that job.)
Ljubljana is lovely for a vacation by the way. Slovenia is a very beautiful country. Unfortunately we were sick with a cold for most of our stay and I didn't partake in the beer fountain or drink nearly as much wine as I wanted to. Our landlady was a bit uptight and got upset that we were hand washing clothes in the bathroom sink, but with the communication barrier I don't think she fully appreciated that we were dealing with sick baby throw-up 3+ times a day...
Yea, i really don't get so many of the comments here.
If i live in a low COL area and i apply, why wouldn't i want the competitive advantage of being able to charge them half as much and make twice as much profit as my competition?
People outside the bay area can make a good living charging well below crazy SF rates.
This isn't even an argument to me. It's not even a discussion. Of course when you have a pool of talent, and that talent is competing for a single job, they will use every tool possible. If you can work for half the price of some SF guy paying massive SF rates, why wouldn't you use that tool?
Yea sure, i could make $200k a year - that would be neat i suppose, but it's insane imo. The number only exists because of SF specific problems. And i'm not in SF.
If i live in a low COL area and i apply, why wouldn't i want the competitive advantage of being able to charge them half as much and make twice as much profit as my competition?
People outside the bay area can make a good living charging well below crazy SF rates.
This isn't even an argument to me. It's not even a discussion. Of course when you have a pool of talent, and that talent is competing for a single job, they will use every tool possible. If you can work for half the price of some SF guy paying massive SF rates, why wouldn't you use that tool?
Yea sure, i could make $200k a year - that would be neat i suppose, but it's insane imo. The number only exists because of SF specific problems. And i'm not in SF.
The point is that the companies are making the same amount of revenue regardless of where you live. If Google cuts your salary 50% because you move to a cheaper area, maybe that doesn't make a difference to you but it is free profit for Google shareholders. It makes it more obvious to people that the amount they are paid and the amount of marginal profit they earn for the company is WILDLY incommensurate, even for over-compensated Silly Valley engineers, and would be even moreso if you move somewhere cheaper and take a pay cut.
>. If Google cuts your salary 50% because you move to a cheaper area, maybe that doesn't make a difference to you but it is free profit for Google shareholders.
And thats exactly how a company should operate - maximize profit while minimizing cost. And conversly, as an individual, you should do the exact same, which is get paid as much as you can for your work (or do the minimum amount of work for the pay you get). When both of those strategies meet in the middle, you get a paid job position.
And thats exactly how a company should operate - maximize profit while minimizing cost. And conversly, as an individual, you should do the exact same, which is get paid as much as you can for your work (or do the minimum amount of work for the pay you get). When both of those strategies meet in the middle, you get a paid job position.
> The point is that the companies are making the same amount of revenue regardless of where you live.
Agreed entirely. It depends on what specifically we're discussing. I often look at hiring.
> If Google cuts your salary 50% because you move to a cheaper area, maybe that doesn't make a difference to you but it is free profit for Google shareholders. It makes it more obvious to people that the amount they are paid and the amount of marginal profit they earn for the company is WILDLY incommensurate, even for over-compensated Silly Valley engineers, and would be even moreso if you move somewhere cheaper and take a pay cut.
I wouldn't work somewhere that did this for this very reason. But there's a huge difference to paying someone based on their finances, and negotiating hiring pay. I'm just talking about hiring pay being negotiable.
Agreed entirely. It depends on what specifically we're discussing. I often look at hiring.
> If Google cuts your salary 50% because you move to a cheaper area, maybe that doesn't make a difference to you but it is free profit for Google shareholders. It makes it more obvious to people that the amount they are paid and the amount of marginal profit they earn for the company is WILDLY incommensurate, even for over-compensated Silly Valley engineers, and would be even moreso if you move somewhere cheaper and take a pay cut.
I wouldn't work somewhere that did this for this very reason. But there's a huge difference to paying someone based on their finances, and negotiating hiring pay. I'm just talking about hiring pay being negotiable.
They could also hire more engineers or expand into new territory which requires additional (non-engineering) labor. The cost of living in the bay area seems almost an artificial constraint on the supply of labor at these companies
You're assuming a highly optimistic scenario where you take an even pay cut but make out like a bandit. The reality is that a "fair wage" for many rural white collar workers is 40% of what you might make in SV, or even worse. Getting $250k in SV sucks, but try getting paid $50k in Cincinnati. Then imagine a scenario where there's maybe 2-3 local companies that hire, and they all collude on prices.
I feel like people saying "just move to a low COL area" have never actually lived and worked in a low COL.
If you lose your job or get fired, there's no one to back up that "half as much, x2 profit" unless you find remote work again, and then you're also at the mercy of whatever people feel they can get out of you. Without competing offers or local competition, you're at the mercy of the market.
People are underselling the competition that nuclei of talent can produce from top competing companies.
I feel like people saying "just move to a low COL area" have never actually lived and worked in a low COL.
If you lose your job or get fired, there's no one to back up that "half as much, x2 profit" unless you find remote work again, and then you're also at the mercy of whatever people feel they can get out of you. Without competing offers or local competition, you're at the mercy of the market.
People are underselling the competition that nuclei of talent can produce from top competing companies.
I think people are also assuming that the "market" rate for tech jobs in these "low COL" areas keeps up with the cost of living. I am here to tell you that it does not, in the cases I'm familiar with. Especially in the relatively hot "cheap" areas, outsiders moving in are driving housing prices up dramatically, but the pay rates have not increased the same amount. So if five years ago you could make 2X the profit, now it might only be 1.25X, and getting worse.
Also, people need to remember that "cost of living" is not actually one thing. It's not like I get a "living" bill once a year that I have to pay. Even in relatively cheap areas, there are some things that cost the same as or even more than they do in major metro areas. Don't do math based on some web-based COL calculator or even on housing prices and assume that it will apply across the board.
I have absolutely seen offers within the last six months where the candidate would be worse off financially despite living in a "cheap" place because the pay reduction was more than the all-in cost of living a similar lifestyle (yes, if you're willing to downgrade lifestyle you can offset this, but you can do the same thing in SF. Most people I've seen actually want to UPGRADE lifestyle with larger houses, more land, nicer neighborhoods, etc.).
Also, people need to remember that "cost of living" is not actually one thing. It's not like I get a "living" bill once a year that I have to pay. Even in relatively cheap areas, there are some things that cost the same as or even more than they do in major metro areas. Don't do math based on some web-based COL calculator or even on housing prices and assume that it will apply across the board.
I have absolutely seen offers within the last six months where the candidate would be worse off financially despite living in a "cheap" place because the pay reduction was more than the all-in cost of living a similar lifestyle (yes, if you're willing to downgrade lifestyle you can offset this, but you can do the same thing in SF. Most people I've seen actually want to UPGRADE lifestyle with larger houses, more land, nicer neighborhoods, etc.).
> Getting $250k in SV sucks
Ok hold up in what world does $250k in SV suck? Median household income here is around $120k last I checked. Making more than double that cannot be described as sucking, come on.
Ok hold up in what world does $250k in SV suck? Median household income here is around $120k last I checked. Making more than double that cannot be described as sucking, come on.
It was mostly sarcastic. I don't actually believe it's bad, that's just "average market rate" for senior/mid level engineer. Roughly translated, 250k in SV is 120k in the Midwest. Housing issues aside.
> Roughly translated, 250k in SV is 120k in the Midwest.
I'll believe this only insofar as $120k in the Midwest means you are "set" in the sense that you can max out your retirement, buy a home, have nice cars, etc. and basically live on autopilot from a financial sense.
I'll believe this only insofar as $120k in the Midwest means you are "set" in the sense that you can max out your retirement, buy a home, have nice cars, etc. and basically live on autopilot from a financial sense.
That’s how bad housing is. If you grew up on the dream of a nice house with a garage and a big yard, $250k still doesn’t get you there in SV.
This type of housing setup that would cost $300k in, say Dallas, will cost $2.5 million on the peninsula. Between property taxes, mortgage insurance, interest, and principal payments and a jaw dropping $140k down payment, that is a monthly payment of $14k or so.
Your take-home after taxes on 250k in the bay is probably around 160k, or 13.3k a month. Whoops, no “American dream” home for you.
This type of housing setup that would cost $300k in, say Dallas, will cost $2.5 million on the peninsula. Between property taxes, mortgage insurance, interest, and principal payments and a jaw dropping $140k down payment, that is a monthly payment of $14k or so.
Your take-home after taxes on 250k in the bay is probably around 160k, or 13.3k a month. Whoops, no “American dream” home for you.
As a European I think American expectations of a reasonable home size are completely ridiculous. Guess that’s a hidden immigrant advantage :D
Then again I would describe most of the houses here as somewhere between a hovel and a shack in terms of build quality. But I’m getting used to it after 6 years.
Then again I would describe most of the houses here as somewhere between a hovel and a shack in terms of build quality. But I’m getting used to it after 6 years.
> As a European I think American expectations of a reasonable home size are completely ridiculous.
I would agree if it weren’t for the fact that this is still a completely reasonable expectation in most of the rest of the country.
I would agree if it weren’t for the fact that this is still a completely reasonable expectation in most of the rest of the country.
How is it reasonable in the least to expect a big house with a garage and a yard in one of the most expensive places in the country?
Of course it’s going to cost a crazy amount of money. It’s not even an option in Manhattan, but plenty of people would disagree it “sucks” there.
Of course it’s going to cost a crazy amount of money. It’s not even an option in Manhattan, but plenty of people would disagree it “sucks” there.
> It’s not even an option in Manhattan, but plenty of people would disagree it “sucks” there.
In Manhattan thats the expectation. You’re in a super dense area filled with high rises. Life is good for apartment dwelling.
In Mountain View, you’re in a suburb that’s mostly single family homes that you’re constantly reminded you won’t ever be able to afford.
> How is it reasonable in the least to expect a big house with a garage and a yard
That’s the lifestyle of the peninsula. It’s reasonable to expect the lifestyle you are constantly surrounded by. Back to the Manhattan analogy, $250k absolutely would not be considered good money if it could not afford you the ability to live like the average property owner.
The Bay Area is a stark contrast between the people lucky enough to have purchased 10+ years ago + some FAANGs and everyone else. Everyone else is stuck in a terrible apartment telling themselves stories about how they’ll get out after making their money or whatever.
It’s nice living in a walkable apartment with no car in Manhattan (or nyc in general). It’s dreary AF on the peninsula.
In Manhattan thats the expectation. You’re in a super dense area filled with high rises. Life is good for apartment dwelling.
In Mountain View, you’re in a suburb that’s mostly single family homes that you’re constantly reminded you won’t ever be able to afford.
> How is it reasonable in the least to expect a big house with a garage and a yard
That’s the lifestyle of the peninsula. It’s reasonable to expect the lifestyle you are constantly surrounded by. Back to the Manhattan analogy, $250k absolutely would not be considered good money if it could not afford you the ability to live like the average property owner.
The Bay Area is a stark contrast between the people lucky enough to have purchased 10+ years ago + some FAANGs and everyone else. Everyone else is stuck in a terrible apartment telling themselves stories about how they’ll get out after making their money or whatever.
It’s nice living in a walkable apartment with no car in Manhattan (or nyc in general). It’s dreary AF on the peninsula.
It’s reasonable to expect the lifestyle you are constantly surrounded by.
No, it's not. Should you be able to afford a home in Beverley Hills? Should you be able to afford a home in San Francisco itself? 40 years ago that was the norm.
No, it's not. Should you be able to afford a home in Beverley Hills? Should you be able to afford a home in San Francisco itself? 40 years ago that was the norm.
> No, it's not.
Yes, it is. The norm in cities in the US until very recently was that you could get a middle class job, buy a small home, raise a family, etc. This phenomenon of only being able to lick the boots of the homeowners near the good jobs is relative new.
> able to afford a home in Beverley Hills
We’re talking about the entire Bay Area, not a specific suburb. Anywhere within an hour commute of Google HQ is like this.
> Should you be able to afford a home in San Francisco itself? 40 years ago that was the norm.
Yes. It was the norm. Then the nimby dickheads stepped in and pulled up the ladder behind them by blocking everything they could and pushed through a very favorable proposition to existing homeowners (prop 13).
Your opinion might be that it’s fine to block out an entire generation from the bay and rent seek. I personally think that’s a shitty drag on society propped up by government created housing scarcity.
Yes, it is. The norm in cities in the US until very recently was that you could get a middle class job, buy a small home, raise a family, etc. This phenomenon of only being able to lick the boots of the homeowners near the good jobs is relative new.
> able to afford a home in Beverley Hills
We’re talking about the entire Bay Area, not a specific suburb. Anywhere within an hour commute of Google HQ is like this.
> Should you be able to afford a home in San Francisco itself? 40 years ago that was the norm.
Yes. It was the norm. Then the nimby dickheads stepped in and pulled up the ladder behind them by blocking everything they could and pushed through a very favorable proposition to existing homeowners (prop 13).
Your opinion might be that it’s fine to block out an entire generation from the bay and rent seek. I personally think that’s a shitty drag on society propped up by government created housing scarcity.
There is no nice way to say this anyhow, but it needs to be said to further the discussion that does in fact exist: this is thinking like a chump. Being a chump is not a competitive advantage, it’s being taken advantage of. I fully respect your right to sell yourself short, but please don’t present it as somehow economically sophisticated and potentially lead less experienced readers here to follow the same foolish path.
Not at all. It's playing the numbers.
If you're aiming for $50k/y in profit after all COL, your required pricing is different in SF than it is in rural America.
If you live in rural America and compete at hiring with SF people, it's your competitive advantage to keep the same profit as them but negotiate a lower price. This increases your relative value in the hiring process.
Sure, i _could_ keep the same SF rates, but then my competitive advantage may just be my skill. If i want more than skill alone, i could lower my rates.
I'm not making less profit. I'm competing to get a job.
If you're aiming for $50k/y in profit after all COL, your required pricing is different in SF than it is in rural America.
If you live in rural America and compete at hiring with SF people, it's your competitive advantage to keep the same profit as them but negotiate a lower price. This increases your relative value in the hiring process.
Sure, i _could_ keep the same SF rates, but then my competitive advantage may just be my skill. If i want more than skill alone, i could lower my rates.
I'm not making less profit. I'm competing to get a job.
> advantage to keep the same profit as them but negotiate a lower price. This increases your relative value in the hiring process.
That is how you negotiate when you’re struggling to find a job. By doing this you’re admitting that you’re not going to be as good as the high CoL candidate so you adjust your price to make your offer more attractive to the company. That’s a terrible position to put yourself in (but entirely understandable if you can’t get offers otherwise).
If you’ve passed the same bar and the company is truly fine with remote, there no reason to accept anything less than what they would pay a local. Speaking from experience in several tech companies in the bay, a proven remote employee is just as valuable as a local and getting decent software people is fucking hard.
It’s unlikely as a candidate that there is even any competition for the position you are filling (as in not multiple candidates that have passed the bar being picked over). Talking you into cost of living adjustments or whatever bullshit is just salary negotiation, not competition with other engineers.
Get multiple offers if you have to, but there is literally no reason a company willing to pay Bay Area salaries can’t pay that to a remote employee. Accepting less is just letting them convince you your labor isn’t as good as Bay Area SWE labor.
That is how you negotiate when you’re struggling to find a job. By doing this you’re admitting that you’re not going to be as good as the high CoL candidate so you adjust your price to make your offer more attractive to the company. That’s a terrible position to put yourself in (but entirely understandable if you can’t get offers otherwise).
If you’ve passed the same bar and the company is truly fine with remote, there no reason to accept anything less than what they would pay a local. Speaking from experience in several tech companies in the bay, a proven remote employee is just as valuable as a local and getting decent software people is fucking hard.
It’s unlikely as a candidate that there is even any competition for the position you are filling (as in not multiple candidates that have passed the bar being picked over). Talking you into cost of living adjustments or whatever bullshit is just salary negotiation, not competition with other engineers.
Get multiple offers if you have to, but there is literally no reason a company willing to pay Bay Area salaries can’t pay that to a remote employee. Accepting less is just letting them convince you your labor isn’t as good as Bay Area SWE labor.
> That is how you negotiate when you’re struggling to find a job. By doing this you’re admitting that you’re not going to be as good as the high CoL candidate so you adjust your price to make your offer more attractive to the company. That’s a terrible position to put yourself in (but entirely understandable if you can’t get offers otherwise).
Yup. That's what i said.
If you see no reason to negotiate, why negotiate? Set your price at what your think your value is. Don't indulge COL requirements of another location.
> It’s unlikely as a candidate that there is even any competition for the position you are filling (as in not multiple candidates that have passed the bar being picked over). Talking you into cost of living adjustments or whatever bullshit is just salary negotiation, not competition with other engineers.
As someone who hires, i disagree. Every one of our hires has been a debate on expected output when compared to cost. But we're a fully remote company.
edit: Oh, and we're not flush with VC cash. We also can't afford any SF employees for this reason. We're much more willing to hire a junior engineer if their priced accordingly. Likewise, if we hired someone at $250k/y, we'd expect twice the output of him/her - and that's unlikely.
I don't get why this is controversial.
Yup. That's what i said.
If you see no reason to negotiate, why negotiate? Set your price at what your think your value is. Don't indulge COL requirements of another location.
> It’s unlikely as a candidate that there is even any competition for the position you are filling (as in not multiple candidates that have passed the bar being picked over). Talking you into cost of living adjustments or whatever bullshit is just salary negotiation, not competition with other engineers.
As someone who hires, i disagree. Every one of our hires has been a debate on expected output when compared to cost. But we're a fully remote company.
edit: Oh, and we're not flush with VC cash. We also can't afford any SF employees for this reason. We're much more willing to hire a junior engineer if their priced accordingly. Likewise, if we hired someone at $250k/y, we'd expect twice the output of him/her - and that's unlikely.
I don't get why this is controversial.
It is actually more than likely to get 2x the throughput when paying for better talent. The bottom of the talent pool is saturated with coasters who never invest in learning. I am seeing way more than 2x. There is also a cumulative factor when you get most of your employess in that caliber. Lastly, there is a limit on what a low talent pool can achieve regardless of the numbers. 1,000 people with my physics skill won't invent the theory of relativity. 10,000 coasters can't invent page rank.
I think it’s disingenuous to assume everyone in SF is commanding higher rates because they are all super talented and not coasters. There are definitely tons of undervalued engineers in poorer or lower cost areas being overlooked to do this fallacy.
Just because someone is charging $200k doesn’t mean they are worth it.
Companies previously established artificial constraints such as colocation that forced higher salaries. If colocation is no longer a requirement, it’s only natural the associated premium is going away. That is, if you want the benefit of living in, say India, then you’ll also have to incur the cost of competing against someone like Ramanujan (famous mathematician) rather than whoever just happens to be within commuting distance of Mountain View.
Just because someone is charging $200k doesn’t mean they are worth it.
Companies previously established artificial constraints such as colocation that forced higher salaries. If colocation is no longer a requirement, it’s only natural the associated premium is going away. That is, if you want the benefit of living in, say India, then you’ll also have to incur the cost of competing against someone like Ramanujan (famous mathematician) rather than whoever just happens to be within commuting distance of Mountain View.
> I'm not making less profit. I'm competing to get a job.
You are competing on price instead of quality. I'd rather compete on talent and keep the money, thanks.
You are competing on price instead of quality. I'd rather compete on talent and keep the money, thanks.
Being a chump is living in the Midwest and asking for SV rates just because you think it's "being taken advantage of" to underbid someone else for the same work.
The era of $400k total comp software development is going to end someday and more accessible remote work is only going to hasten it.
The era of $400k total comp software development is going to end someday and more accessible remote work is only going to hasten it.
It wont end, just be reserved for the elite, much like it is today. Few Average Joes are making that 400k total comp.
> The era of $400k total comp software development is going to end someday and more accessible remote work is only going to hasten it.
Well, the same argument has been made before regarding offshoring and so far that hasn't seemed to have spurred any major declines in total compensation.
Well, the same argument has been made before regarding offshoring and so far that hasn't seemed to have spurred any major declines in total compensation.
> "Well, the same argument has been made before regarding offshoring and so far that hasn't seemed to have spurred any major declines in total compensation."
Yes, but things are different this time (famous last words, I know). Prior to COVID-19, offshoring was competing with the convenience of having everybody in the same physical space. Now, with every tech company currently having nearly all of their staff working from home, they are learning to make the equivalent of offshoring work; they have no choice in the matter if they want to continue operating. It's a small, small jump from there to outsourcing to low cost of living regions or even real offshoring.
Yes, but things are different this time (famous last words, I know). Prior to COVID-19, offshoring was competing with the convenience of having everybody in the same physical space. Now, with every tech company currently having nearly all of their staff working from home, they are learning to make the equivalent of offshoring work; they have no choice in the matter if they want to continue operating. It's a small, small jump from there to outsourcing to low cost of living regions or even real offshoring.
> The era of $400k total comp software development is going to end someday and more accessible remote work is only going to hasten it.
I'm not sure I buy this when the vast majority of these CEOs have magnitudes more money than they could feasibly spend even if they used a flamethrower. Honestly I don't see tech becoming less useful/profitable in the future, quite the opposite. As long as these $400k employees are netting people higher up a lot more, it isn't going to stop. One could argue that there's still room to pay the employees even more. (and let's be real, most people aren't getting $400k tc)
I'm not sure I buy this when the vast majority of these CEOs have magnitudes more money than they could feasibly spend even if they used a flamethrower. Honestly I don't see tech becoming less useful/profitable in the future, quite the opposite. As long as these $400k employees are netting people higher up a lot more, it isn't going to stop. One could argue that there's still room to pay the employees even more. (and let's be real, most people aren't getting $400k tc)
It follows from this that you think the future of software companies will be reaping even greater profits from massive payroll cuts. I doubt it.
We're all somebody else's chump
I'd argue the opposite. The price of living rose to meet the means of the people who lived there. People in tech are highly paid because it is a workers' market where talent and special education and skills are generally required. If the industry could hire people who could do the same job remote at $50k per year this trend would have begun decades ago.
It did, didn't it? faangs have been moving development to the Midwest for at least 20years.
Look carefully at what is moving to midwest. Either projects that are in maintenance or non-tech workers.
Interesting! In the embedded systems arena it has been happening even longer than that, including developers. Maybe that explains part but not all of why webserver developers make double on average an embedded developer's salary, or last time I checked.
Frankly I would be ok with that.
The situation in the valley developed in the 90s and 00s, so that companies could be located close to their investors. That was a time when remote work tools sucked and work practices forced people to be in the same office as the founders, so it made lots of sense that the proximity to capital spiked rents and comp to match.
But now, post-pandemic, remote work is the norm. The founders can relocate to the valley because investment finance is largely a relationship game and those are still way better done in person, but there’s no longer any reason the technical team needs to be located near the founders or even each other.
There is huge disparity in engineering salaries — if you work for a smallish company in a rural area you’re probably making $80k/yr for doing the same job someone in the bay gets $175+ for. Ideally it will work the other way around though — the folks making $80k are much more likely to jump ship for a remote job that pays $125k than the folks making $175k are to jump to the same job.
Of course, if organize via collective bargaining we can likely push that even higher, so listen to your union organizers.
The situation in the valley developed in the 90s and 00s, so that companies could be located close to their investors. That was a time when remote work tools sucked and work practices forced people to be in the same office as the founders, so it made lots of sense that the proximity to capital spiked rents and comp to match.
But now, post-pandemic, remote work is the norm. The founders can relocate to the valley because investment finance is largely a relationship game and those are still way better done in person, but there’s no longer any reason the technical team needs to be located near the founders or even each other.
There is huge disparity in engineering salaries — if you work for a smallish company in a rural area you’re probably making $80k/yr for doing the same job someone in the bay gets $175+ for. Ideally it will work the other way around though — the folks making $80k are much more likely to jump ship for a remote job that pays $125k than the folks making $175k are to jump to the same job.
Of course, if organize via collective bargaining we can likely push that even higher, so listen to your union organizers.
I always assumed that it the high paid jobs in SF were proper software engineering positions as opposed to line of business apps that lower paid jobs else where often are?
There's a wide range of salaries. The highest paying companies will pay $175+ to a new grad. A of jobs pay $200k+ with equity for senior engineers.
175K seems kinda crazy unless that's total yearly compensation including equity. These days even interns are making 80K+ though. The crazy SV money is in getting early equity in a company with enough secret sauce to make it long term, though, and those opportunities don't usually come with big salaries right away. It's also a very high risk way to be compensated. If you are in the position to do so, I suggest focusing on finding a job that's a good fit for your skills, work style and risk tolerance. Let the compensation details fall into place from there. Assuming you've joined a good group of people working on a real project, things will probably work out. (You of course need to be responsible for yourself and understand your financial situation. It's too easy to miss a deadline and lose equity options, for example.)
Yeah, I'm including equity. Equity at a public company like Google is liquid and easier to value. But usually new grad offers don't include a lot of equity. I'd say that pre-ipo unicorns can also be a great option if it's available to you. Base salaries are usually high, and equity can end up being really valuable. Recent IPOs have made a lot of millionaires.
But I do agree with you, it's high risk and there's a lot of luck involved. And it's much more important to find a job that's a good fit for you.
But I do agree with you, it's high risk and there's a lot of luck involved. And it's much more important to find a job that's a good fit for you.
What is "proper software engineering"?
Calling it "proper software engineering" is little pretentious at best, but there is some distinction to be made between software engineering in the bay area and most software engineering elsewhere.
When we think of SF software, we think of software created by a company whose core product is the software itself, especially when the end-users are individuals or other software companies.
This is quite a bit different than most software developed outside of the bay area. Most of it is either in-house stuff or industry-specific B2B stuff. In these situations, the software doesn't have to be pretty, it doesn't have to use cutting-edge tech to woo investors, resource utilization is much less important, and hell - it usually doesn't even have to scale. It just has to work. It just has to make someone's job incrementally better, and it'll be a success.
This software can be tremendously valuable, and creating it has its own unique challenges, but the job is indeed a bit different than software engineering in the bay, and the compensation is different as well.
When we think of SF software, we think of software created by a company whose core product is the software itself, especially when the end-users are individuals or other software companies.
This is quite a bit different than most software developed outside of the bay area. Most of it is either in-house stuff or industry-specific B2B stuff. In these situations, the software doesn't have to be pretty, it doesn't have to use cutting-edge tech to woo investors, resource utilization is much less important, and hell - it usually doesn't even have to scale. It just has to work. It just has to make someone's job incrementally better, and it'll be a success.
This software can be tremendously valuable, and creating it has its own unique challenges, but the job is indeed a bit different than software engineering in the bay, and the compensation is different as well.
But collocated teams are still more efficient - there's plenty of studies that prove that.
And my current job quite often has multiple teams from multiple employers/agencies from multiple time zones - even being able to have key meetings with all hand present would massively speed up - we could have avoided so many problems and delivered things months quicker.
And my current job quite often has multiple teams from multiple employers/agencies from multiple time zones - even being able to have key meetings with all hand present would massively speed up - we could have avoided so many problems and delivered things months quicker.
In my experience, the efficiency benefits aren’t as clear-cut as you think. I have a client who is a big Fortune 10 company, with most of their engineering teams located in the same high-rise office building for this collocation efficiency benefit.
They’ve actually seen a huge increase in productivity by moving to a virtual model during the pandemic — exactly because nobody is wasting 2 hours of their day waiting on elevators or waiting for meetings to start. People have more autonomy to block off their day and there aren’t the distractions present in a normal open office.
If I were to informally poll all of the product development organizations I work with, I would expect to see at least 90% of folks want to maintain the remote workplace going forward. They’ll still probably go back to some level of in-person work later this year, but the difference is that remote will still probably be the default for most folks. I don’t think we’ll ever get back to a model that assumes all or even most of the team is located in the same room — it’s just too much better to do things this way.
They’ve actually seen a huge increase in productivity by moving to a virtual model during the pandemic — exactly because nobody is wasting 2 hours of their day waiting on elevators or waiting for meetings to start. People have more autonomy to block off their day and there aren’t the distractions present in a normal open office.
If I were to informally poll all of the product development organizations I work with, I would expect to see at least 90% of folks want to maintain the remote workplace going forward. They’ll still probably go back to some level of in-person work later this year, but the difference is that remote will still probably be the default for most folks. I don’t think we’ll ever get back to a model that assumes all or even most of the team is located in the same room — it’s just too much better to do things this way.
Well I normally work with a well known brand and we often have main client 2 -3 locations two or three agencies agencies plus our dev/project teams a Liviv .
Trying to get things done properly is very hard if we could have even kickoff meetings with every one in the room and have printed designs stuck to the wall
Trying to get things done properly is very hard if we could have even kickoff meetings with every one in the room and have printed designs stuck to the wall
Yeah, that’s why I think long-term it’s going to be coming into the office a few days a month for meetings, and WFH the rest of the time. Productivity is up and people are generally ok with the remote work situation — it’s the fact that they have to babysit their kids and can’t go anywhere for a change of scenery that’s causing the stress.
And frankly most of the dev projects I work on are globally distributed anyway, so you’re never getting everyone in the same room to begin with.
And frankly most of the dev projects I work on are globally distributed anyway, so you’re never getting everyone in the same room to begin with.
Two different groups of people. The ones complaining about location based pay are the ones who would rather work in cheaper cities.
Of course getting paid Bay Area salaries while simultaneously living somewhere you can buy a big cheap house is a great arbitrage, but not achievable for many.
But many engineers can work in the Bay Area for 10 years to become a millionaire then move elsewhere, buy a house cash and retire early (or work a lower pay job if they feel like it).
But many engineers can work in the Bay Area for 10 years to become a millionaire then move elsewhere, buy a house cash and retire early (or work a lower pay job if they feel like it).
> But many engineers can work in the Bay Area for 10 years to become a millionaire then move elsewhere, buy a house cash and retire early (or work a lower pay job if they feel like it).
This sounds good on paper, but what you’re saying is establish roots in one place and then rip them up (take your kids out of schools, away from their friends, leave your friends, hobbies, etc). 10 years isn’t exactly an in-n-out stint on an oil rig.
This sounds good on paper, but what you’re saying is establish roots in one place and then rip them up (take your kids out of schools, away from their friends, leave your friends, hobbies, etc). 10 years isn’t exactly an in-n-out stint on an oil rig.
On the coasts it's normal to not have kids until your early 30s, so you can definitely graduate and work 10 years in the Bay Area before moving elsewhere and establishing a family.
You're right. I think so much of this discussion is missing the forest for the trees though. The bigger picture question is whether dense, expensive metropolitan areas, or other locales with expensive cost-of-living are the right fit for many jobs. I think there will be major changes in the next five-to-ten years.
This holds true for junior engineers, but not for seniors.
Raises tend to be percentage-based. The junior making 200k in SF may be worse off than the junior making 100k in Pittsburgh.
But the senior making 400k in SF is much better off than the senior making 200k in Pittsburgh.
Since Silicon valley is that one weird place where it takes five years for a junior to become a senior, taking that job in Pittsburgh is quite short-sighted.
Raises tend to be percentage-based. The junior making 200k in SF may be worse off than the junior making 100k in Pittsburgh.
But the senior making 400k in SF is much better off than the senior making 200k in Pittsburgh.
Since Silicon valley is that one weird place where it takes five years for a junior to become a senior, taking that job in Pittsburgh is quite short-sighted.
> Remote work floods the supply with lots more available workers than they can find in any one city, so salaries for those roles go down.
You’re correct, but that’s not what’s happening here. Facebook isn’t paying remote workers uniformly less than in person workers. It is paying different amounts for different remote workers depending on where they live. That makes no sense given that, as you observe, there is a single national market for remote workers. The fact that Facebook can do that is an indicator that it either has market power in the employment market for programmers, or that we’re in an odd situation where the market hasn’t reached equilibrium.
You’re correct, but that’s not what’s happening here. Facebook isn’t paying remote workers uniformly less than in person workers. It is paying different amounts for different remote workers depending on where they live. That makes no sense given that, as you observe, there is a single national market for remote workers. The fact that Facebook can do that is an indicator that it either has market power in the employment market for programmers, or that we’re in an odd situation where the market hasn’t reached equilibrium.
> the full value of the work you do > That's kind of an upper bound on what the company could pay you
No. If you have a monopoly on a skill/knowledge/certification/etc, then in theory you can extract rent from the business, potentially up to the profits of the business (well, profits less the returns required to cover risk of capital). The maximum you can earn is far more than the value you create.
No. If you have a monopoly on a skill/knowledge/certification/etc, then in theory you can extract rent from the business, potentially up to the profits of the business (well, profits less the returns required to cover risk of capital). The maximum you can earn is far more than the value you create.
Your comment could justify a divide in pay between in-person and remote workers. Presumably, the ability to be available in person is valuable in some companies and the market for that is smaller, so more compensation.
However, what it does not justify is location-based pay. From the company's perspective, there is no significant difference between a remote worker in New York City or Birmingham, Alabama.
However, what it does not justify is location-based pay. From the company's perspective, there is no significant difference between a remote worker in New York City or Birmingham, Alabama.
I still think what I said is true basically by definition, but yeah fair enough it does beg the question why companies don't hire exclusively in cheap areas now, driving down the market rates in expensive cities.
I think supply and demand is still a big part of the answer. By square mileage the potential locations where employees can live has grown by 200x by opening up to remote work anywhere in the US (napkin math, US is 3.8 million sq miles, bay area and tri-state area combined are ~20k sq miles). But obviously the number of available engineers hasn't expanded by nearly that much, engineers are much more concentrated in the areas where most of the jobs have been concentrated up until now. I.e. companies still can't afford to limit their supply to remote only, just as they increasingly can't afford to limit supply to bay area only.
Then there's also the perhaps more controversial issue of skill & experience. The most in-demand engineers are the people with experience at Google, FB, etc. and these people are concentrated in the places where these companies are. Ambitious people also have self-selected to live in these hot markets for years. You could argue that these proxy factors shouldn't matter and companies should be measuring skill directly, but as an industry we still haven't cracked that problem. So on average, a remote engineer in NYC probably is more valuable to most companies than one in Birmingham, Al. Like it or not, there's still a lot inertia to overcome here (and maybe even a little bit of validity to these patterns).
I think supply and demand is still a big part of the answer. By square mileage the potential locations where employees can live has grown by 200x by opening up to remote work anywhere in the US (napkin math, US is 3.8 million sq miles, bay area and tri-state area combined are ~20k sq miles). But obviously the number of available engineers hasn't expanded by nearly that much, engineers are much more concentrated in the areas where most of the jobs have been concentrated up until now. I.e. companies still can't afford to limit their supply to remote only, just as they increasingly can't afford to limit supply to bay area only.
Then there's also the perhaps more controversial issue of skill & experience. The most in-demand engineers are the people with experience at Google, FB, etc. and these people are concentrated in the places where these companies are. Ambitious people also have self-selected to live in these hot markets for years. You could argue that these proxy factors shouldn't matter and companies should be measuring skill directly, but as an industry we still haven't cracked that problem. So on average, a remote engineer in NYC probably is more valuable to most companies than one in Birmingham, Al. Like it or not, there's still a lot inertia to overcome here (and maybe even a little bit of validity to these patterns).
This is pretty much wrong, the evidence is against you, you are paying for in-location developers.
There are plenty of developers who speak great English in the EU, many natively in the UK and Australia and Canada.
Why are these not all getting heavily poached by SV?
Because SV value in-person developers, so have driven up the pay for developers in SV, but in Europe a mid-level developer is still on something like €40-50k.
There are plenty of developers who speak great English in the EU, many natively in the UK and Australia and Canada.
Why are these not all getting heavily poached by SV?
Because SV value in-person developers, so have driven up the pay for developers in SV, but in Europe a mid-level developer is still on something like €40-50k.
Remote work from Europe for a SV company is problematic, there's practically no overlap of working time so the European workers needs to work late evening and into the night to be able to stay in touch with the team. Not that many experienced (i.e. older and with families) people are ok with that.
timezone and cultural differences.
It’s funny how the power of markets seems so easily used to reinforce the current market outcome. Like wage prices are artificially high or right where they should be because the market must be right. Without looking at the factors closely (like one should when discussing labor especially), there’s the possible outcome that current wages are held down below their market clearing prices by external factors and market power.
The market is always right pretty much by definition.
The “external factors” you speak of are the market conditions in which the market operates. You can change the external factors and the market will rebalance to a new equalibrium but that doenst mean the market was wrong before and correct now.
The “external factors” you speak of are the market conditions in which the market operates. You can change the external factors and the market will rebalance to a new equalibrium but that doenst mean the market was wrong before and correct now.
This line of thinking breaks down since those companies have a much larger pool of workers to draw from, but they are also competing against every other company who is hiring remotely in their country.
In the end, employers are free to make whatever excuse they want to try to pay less, but I will respectfully decline to take a 50% pay cut to produce the same value for them :)
In the end, employers are free to make whatever excuse they want to try to pay less, but I will respectfully decline to take a 50% pay cut to produce the same value for them :)
>Interesting choice to invoke market value to argue that the salaries that the market has settled on for remote work are too low.
My friend who works remote makes just as much as I used to working in the office (when I was in industry). He's not getting "location-based" pay, so I'd say that "the market" has not unanimously decided on that quite yet.
My friend who works remote makes just as much as I used to working in the office (when I was in industry). He's not getting "location-based" pay, so I'd say that "the market" has not unanimously decided on that quite yet.
Absolutely, and also it opens up a whole host of other questions that are similarly intrusive:
- I have a family with children. Should I get paid more than an employee who lives alone? - I have a big house that has a large mortgage. Should I get paid more than an employee who lives in a cheap apartment? - I have purchased a yacht that requires maintenance. Should I get paid more than an employee who hasn't?
Sure, the last one is ridiculous, but honestly, they're _all_ ridiculous. The idea that your employer should be able to look at your expenses and judge which ones are valid and which ones aren't, and then adjust your pay "appropriately" is offensive on a deep level.
- I have a family with children. Should I get paid more than an employee who lives alone? - I have a big house that has a large mortgage. Should I get paid more than an employee who lives in a cheap apartment? - I have purchased a yacht that requires maintenance. Should I get paid more than an employee who hasn't?
Sure, the last one is ridiculous, but honestly, they're _all_ ridiculous. The idea that your employer should be able to look at your expenses and judge which ones are valid and which ones aren't, and then adjust your pay "appropriately" is offensive on a deep level.
I don't have a boat, my friends who do have one bill based on what it costs to maintain it. Do they tell the HR person or clients "I have a boat I need to maintain," never, as that just gives away leverage, but they only seek out roles that facilitate their life.
The language itself, "should I get paid" assumes a parental allowance relationship and we should get out of the habit of using it. "Get paid" is a day-labourers colloquialism. The form of the phrase itself defines you as the passive subject.
Bill for work, draw a salary, agree to compensation, accept consideration, negotiate a package, earn bonuses, settle invoices, sell services (not time), sell equity - do not "get paid" by anyone. It's a psychological impediment that keeps people poor.
The language itself, "should I get paid" assumes a parental allowance relationship and we should get out of the habit of using it. "Get paid" is a day-labourers colloquialism. The form of the phrase itself defines you as the passive subject.
Bill for work, draw a salary, agree to compensation, accept consideration, negotiate a package, earn bonuses, settle invoices, sell services (not time), sell equity - do not "get paid" by anyone. It's a psychological impediment that keeps people poor.
Structural impediments keep people poor. Not internal monologues.
Internal monolouges enable structural inequalities and broken paradigmes. Memetic constructs form the basis for all societal constructs, so I think maybe you are under selling the importance of thoughts in this case.
Your first sentence is quite a claim. Do you have evidence that this is what enables structural inequalities and broken paradigms? Maybe it would be more reasonable to say such internal monologues help perpetuate these things. It seems to me that the structural inequality comes from first.
Internal monologues absolutely keep people poor. Failure to effectively negotiate is nearly 100% about internal monologues, particularly once the time has come for negotiation.
Perhaps. Wouldn't you agree that internal monologues often reinforce structural impediments, though? I.e. "I couldn't possibly do ACTION, I'm just an ADJECTIVE NOUN".
// Structural impediments keep people poor. Not internal monologues.
Penniless immigrants come to the US and within one (at most 2) generations become the 1% exactly because they DON'T think the way you do.
Mindset is everything.
Penniless immigrants come to the US and within one (at most 2) generations become the 1% exactly because they DON'T think the way you do.
Mindset is everything.
> The idea that your employer should be able to look at your expenses and judge which ones are valid and which ones aren't, and then adjust your pay "appropriately" is offensive on a deep level.
It truly is. I may have a passion for Alizé and Cristal and to afford that passion I may want to live in a rural setting. That’s my business. Who are these people to try and tell me that whether I live in SF or Nebraska, they’re only going to let me drink André?
It truly is. I may have a passion for Alizé and Cristal and to afford that passion I may want to live in a rural setting. That’s my business. Who are these people to try and tell me that whether I live in SF or Nebraska, they’re only going to let me drink André?
The argument from the employers point of view is: we are forcing you to live in SF in order to work, thus we will pay you a premium to accept our choices.
If an employer has nothing to do with your lifestyle choices, then they won't pay for them. For a truly remote position, they won't pay extra if you life in NY/SF vs Nebraska.
However, I think the world hasn't adapted to that market economics yet, so in this time of transition people talk about location-based pay as a stopgap measure. Software development doesn't benefit from a centralized location, so in the future developers won't naturally live in big expensive cities and employers won't pay them wages that permit them to do so.
To be honest, I think the best thing would be for SW Devs to have a guild that aids in collective bargaining. Otherwise, the power balance will gradually tilt too far towards employers. Other professional jobs (e.g. medicine, law) have similar arrangements, and that's the only reason why pay can remain high in them.
If an employer has nothing to do with your lifestyle choices, then they won't pay for them. For a truly remote position, they won't pay extra if you life in NY/SF vs Nebraska.
However, I think the world hasn't adapted to that market economics yet, so in this time of transition people talk about location-based pay as a stopgap measure. Software development doesn't benefit from a centralized location, so in the future developers won't naturally live in big expensive cities and employers won't pay them wages that permit them to do so.
To be honest, I think the best thing would be for SW Devs to have a guild that aids in collective bargaining. Otherwise, the power balance will gradually tilt too far towards employers. Other professional jobs (e.g. medicine, law) have similar arrangements, and that's the only reason why pay can remain high in them.
> guild that aids in collective bargaining
Sort of like a worker’s union?
Sort of like a worker’s union?
>The idea that your employer should be able to look at your expenses and judge which ones are valid and which ones aren't, and then adjust your pay "appropriately" is offensive on a deep level.
No one making these decisions actually has this idea. It's just more acceptable PR than "we're going to lower your pay because we think you will accept it because we think that you won't or you think you won't have better options."
No one making these decisions actually has this idea. It's just more acceptable PR than "we're going to lower your pay because we think you will accept it because we think that you won't or you think you won't have better options."
> I have a family with children. Should I get paid more than an employee who lives alone? - I have a big house that has a large mortgage. Should I get paid more than an employee who lives in a cheap apartment? - I have purchased a yacht that requires maintenance. Should I get paid more than an employee who hasn't?
Should you? No. Do you have to? Yes.
If you have a family of four, a yacht and a mortgage maybe you need to make - say - $200k/y. Cool. But what about some single guy with none of those things, he can work for $100k/y and make the same profit as you.
Are you saying he shouldn't use his competitive advantage over you to get hired?
This isn't about the employer. It's about the employee, and what their life allows them to work for.
Should you? No. Do you have to? Yes.
If you have a family of four, a yacht and a mortgage maybe you need to make - say - $200k/y. Cool. But what about some single guy with none of those things, he can work for $100k/y and make the same profit as you.
Are you saying he shouldn't use his competitive advantage over you to get hired?
This isn't about the employer. It's about the employee, and what their life allows them to work for.
> It's about the employee, and what their life allows them to work for.
So rather than compete in the job market based on your skill set and what value they bring to a company, you should instead focus on not starting a family and living as cheaply as possible in order to make yourself attractive to companies. I'm sure employers would love for you to center your life around making yourself as cheap to hire as possible, but from the point of view of the employee it sounds extremely unhealthy.
So rather than compete in the job market based on your skill set and what value they bring to a company, you should instead focus on not starting a family and living as cheaply as possible in order to make yourself attractive to companies. I'm sure employers would love for you to center your life around making yourself as cheap to hire as possible, but from the point of view of the employee it sounds extremely unhealthy.
> So rather than compete in the job market based on your skill set and what value they bring to a company, you should instead focus on not starting a family and living as cheaply as possible in order to make yourself attractive to companies. I'm sure employers would love for you to center your life around making yourself as cheap to hire as possible, but from the point of view of the employee it sounds extremely unhealthy.
Maybe. I got into this market because i was able to apply at a much cheaper position, beating out other more skilled employees. I levered my lower pay to offset my lack of history in the market. Were there more skilled people applying? Definitely. Did they apply at a higher rate? Definitely.
Sure if you wanted to go to extremes you should live as cheaply as possible. But you could say that about anything. Instead, live how you want to live and expect to deal with that cost of living. You said it yourself, "skill set and what value they bring". What value you bring to a company is relative to what they pay you. If you cost $500k/y but your skillset is that of a junior engineer, do you honestly think your value is the same of a similar junior engineer working for $100k/y? Unlikely.
If you want to live in a city you are simply required to make more money than someone living in a rural environment. If i have a huge mortgage i can't work at walmart. I need to make more. These are all relative values based on COL, how much you spend, etc. This shouldn't be a controversial statement, in my view.
Mind you i'm very liberal. I believe in worker rights. But forcing everyone to be paid for insanely high COL SF rates seems bonkers. Absolute bonkers.
Maybe. I got into this market because i was able to apply at a much cheaper position, beating out other more skilled employees. I levered my lower pay to offset my lack of history in the market. Were there more skilled people applying? Definitely. Did they apply at a higher rate? Definitely.
Sure if you wanted to go to extremes you should live as cheaply as possible. But you could say that about anything. Instead, live how you want to live and expect to deal with that cost of living. You said it yourself, "skill set and what value they bring". What value you bring to a company is relative to what they pay you. If you cost $500k/y but your skillset is that of a junior engineer, do you honestly think your value is the same of a similar junior engineer working for $100k/y? Unlikely.
If you want to live in a city you are simply required to make more money than someone living in a rural environment. If i have a huge mortgage i can't work at walmart. I need to make more. These are all relative values based on COL, how much you spend, etc. This shouldn't be a controversial statement, in my view.
Mind you i'm very liberal. I believe in worker rights. But forcing everyone to be paid for insanely high COL SF rates seems bonkers. Absolute bonkers.
The reason they look at cost of living is because they won't fill the jobs otherwise. You can pay a Bangalore wage for a developer in San Francisco but it'd be less than a local janitor makes. So obviously they have to take this into account.
> you concede that your employer has the right to treat you like a child receiving an allowance
(off-topic) this reminds me of a job interview I had early in my career. The person interviewing me was one of the directors of the company and he asked me why I'd requested such a salary.
Initially I was thinking he'd want me to answer some bullshit about Bringing Value To The Company etc but he started probing about my personal life - do I have a wife/kids, what do I spent money on, how much is your rent, how much disposable income do you have and why do you want more.
Needless to say I wasn't impressed by this and decided to cut the interview short.
(off-topic) this reminds me of a job interview I had early in my career. The person interviewing me was one of the directors of the company and he asked me why I'd requested such a salary.
Initially I was thinking he'd want me to answer some bullshit about Bringing Value To The Company etc but he started probing about my personal life - do I have a wife/kids, what do I spent money on, how much is your rent, how much disposable income do you have and why do you want more.
Needless to say I wasn't impressed by this and decided to cut the interview short.
At one of my first jobs in the early days of the internet, the hiring manager had a very low budget and was offering me really really low pay, and to try and convince me he literally said: "Look, I know it's not much, but we work long hours here and there's free food. You'll get home at around 9pm every day and just collapse to sleep, so believe me, your expenses will be very, very low".
(I actually took the job despite this because I wanted to get on the internet train, and I don't regret it. Also, it took me a bit over a year to take over that manager's role and make X2.5 of the original lowball salary)
(I actually took the job despite this because I wanted to get on the internet train, and I don't regret it. Also, it took me a bit over a year to take over that manager's role and make X2.5 of the original lowball salary)
[deleted]
> and not on the market value of your work.
The market value of your work depends, in no small part, on whether or not that work includes showing your face X days a week at an office in San Francisco.
The market value of your work depends, in no small part, on whether or not that work includes showing your face X days a week at an office in San Francisco.
For sure I see the argument there: it is way more of a pain in the ass to show up to an office on Market Street than chilling wherever you want. And if that was their stated argument, I'd have no problem with it.
However, that this not the argument these people are making. The argument I see time and again is that your compensation should be location-adjusted based on cost of living. And by making that argument, they are clearly saying you are—or are not—entitled to a certain degree of living, which is where it gets creepy, inappropriate and inevitably abusive.
And why do I say creepy? Because saying that a person does or does not deserve a certain lifestyle, and saying that they will or will not facilitate that lifestyle for you, crosses a boundary into your personal life that degrades you as an independent individual who is entitled to decide whether or not you do basic things like saving money. Instead of treating you like a person, they treat you and force you to conceive of yourself some sort of "lifestyle consumer." Sure, some people just have no leverage. But normalizing this way if thinking is going to lead us down an even worse labor path than we are on right now. Your employer is not your legal guardian.
However, that this not the argument these people are making. The argument I see time and again is that your compensation should be location-adjusted based on cost of living. And by making that argument, they are clearly saying you are—or are not—entitled to a certain degree of living, which is where it gets creepy, inappropriate and inevitably abusive.
And why do I say creepy? Because saying that a person does or does not deserve a certain lifestyle, and saying that they will or will not facilitate that lifestyle for you, crosses a boundary into your personal life that degrades you as an independent individual who is entitled to decide whether or not you do basic things like saving money. Instead of treating you like a person, they treat you and force you to conceive of yourself some sort of "lifestyle consumer." Sure, some people just have no leverage. But normalizing this way if thinking is going to lead us down an even worse labor path than we are on right now. Your employer is not your legal guardian.
I think there’s poor reasoning on all sides. Plenty of employees that want to make SF market salaries while living in Thailand talk about the value of their work. Whether or not those claims are accurate they are irrelevant.
Employees have no more reason to be concerned about the value of their work to employers than employers have to be concerned about the value of their pay to employees.
If you want to be logical about it the only thing that matters is the market. But both sides try to bring in irrelevant arguments in hopes of getting leverage in negotiations. Sometimes it even works!
Employees have no more reason to be concerned about the value of their work to employers than employers have to be concerned about the value of their pay to employees.
If you want to be logical about it the only thing that matters is the market. But both sides try to bring in irrelevant arguments in hopes of getting leverage in negotiations. Sometimes it even works!
Employees are a marketing asset and powered by a SV dev team is more marketable compared to a dev team. Many companies are funded / sold by the value of their employees.
There isn't one market. A remote SV developer should be able to command more if they can sell a connection to SV. Same for a FAANG company.. you can get paided more for being associated with a faang
There isn't one market. A remote SV developer should be able to command more if they can sell a connection to SV. Same for a FAANG company.. you can get paided more for being associated with a faang
Actually, COVID-19 has shown that this is a small part of the work. Non-trivial, but mostly meaningless.
Pay market rates. If you want people on location in SF, pay SF market rates. If you want people occasionally on location in SF, pay SF market rates. If you want people to travel rarely to SF pay local area rates to the nearest office the person lives by.
SF is neither the center of the universe nor where all the interesting problems/projects reside.
Pay market rates. If you want people on location in SF, pay SF market rates. If you want people occasionally on location in SF, pay SF market rates. If you want people to travel rarely to SF pay local area rates to the nearest office the person lives by.
SF is neither the center of the universe nor where all the interesting problems/projects reside.
> Pay market rates. If you want people on location in SF, pay SF market rates. If you want people occasionally on location in SF, pay SF market rates. If you want people to travel rarely to SF pay local area rates to the nearest office the person lives by.
One change. For those you only rarely require to travel to any of your offices, pay the same regardless of where they live. All remote locations are the same as far as the company is concerned [1].
For a company with N offices, there are only N+1 locations as far as pay should go: the local rate in each of the N office's local area, paid to people who are required to be on location there more than rarely, and the rate for everyone else.
On those rare occasions when someone in the everyone else group is required to come to one of the offices, treat it like any other required business trip and the company pays for travel and lodging and food.
[1] to a first approximation. If the company needs a job to be done on a particular daily schedule, then there are two remote locations as far as the company is concerned: time zones where that schedule is reasonable, and everywhere else.
One change. For those you only rarely require to travel to any of your offices, pay the same regardless of where they live. All remote locations are the same as far as the company is concerned [1].
For a company with N offices, there are only N+1 locations as far as pay should go: the local rate in each of the N office's local area, paid to people who are required to be on location there more than rarely, and the rate for everyone else.
On those rare occasions when someone in the everyone else group is required to come to one of the offices, treat it like any other required business trip and the company pays for travel and lodging and food.
[1] to a first approximation. If the company needs a job to be done on a particular daily schedule, then there are two remote locations as far as the company is concerned: time zones where that schedule is reasonable, and everywhere else.
So which office are we using for the remote rate? It's probably not going to be SF. Tampa? Austin? Buffalo? Memphis?
You don't use any of your offices for the remote rate. The remote rate is whatever is sufficient to get enough qualified remote workers to fill your needs.
The point is that you as a company do not care where your remote workers are except perhaps they need to be in a timezone close to that of whichever office of yours they are working most closely with.
If you can pay remote workers what would be a good wage in El Paso or Tulsa or Boise and that is sufficient to get you enough good workers from such places to fill your needs, you don't care that it is not enough to get workers from Boston or Minneapolis or Chicago because you don't specifically need workers from Boston or Minneapolis or Chicago.
The point is that you as a company do not care where your remote workers are except perhaps they need to be in a timezone close to that of whichever office of yours they are working most closely with.
If you can pay remote workers what would be a good wage in El Paso or Tulsa or Boise and that is sufficient to get you enough good workers from such places to fill your needs, you don't care that it is not enough to get workers from Boston or Minneapolis or Chicago because you don't specifically need workers from Boston or Minneapolis or Chicago.
Experience is not yet evenly distributed today, because of non-remote jobs in the recent past. I chose to relocate to our industry's most competitive market, and here I had the benefit of problems and expert peers like none before.
So, in other words, salary is going to be location based? Because you can probably get folks from lower CoL areas for less than from higher CoL areas.
This is exactly why the grandparent post doesn’t make sense. Market rates matter.
Mumbay, probably.
(i'm being ironic here, btw)
(i'm being ironic here, btw)
:-) You're not going to have equalization across countries for the most part for many reasons, especially those in distant timezones. It's a more interesting discussion within the US because there are at least reasonable arguments to be made for flat pay bands across locations.
If you exist in the 20th century.
Say hi to Doc Brown for me, thanks.
Say hi to Doc Brown for me, thanks.
Sure, for inefficient businesses likely to have their lunch eaten by wiser competition.
That remains to be seen, doesn’t it? Because right now the scoreboard is looking pretty good for companies with lots of office space in the Bay Area.
I tend to agree with your post (how could I not, i'm on the same side of the table as you) but I cannot help but see THE fallacy in your thinking.
You claim that you should be paid based on market value. You are probably speaking about the pre-covid market value.
But once you open up to full-remote working... The market broadens immensely.
Your "competitors" in the market are not bay-area people anymore. It's the whole US. If your company has branches in other countries too (think FAANGs) and the workforce was already spread across timezone then now most of the world is filled with potential competitors for your job.
And now with a huge supply of workers, your market value decreases a lot.
And to be 100% honest: as an european, if you (an american) think you're worth 250k and your employer is thinking of firing you and offering me 125k for your job... Well good luck with your next job search.
You claim that you should be paid based on market value. You are probably speaking about the pre-covid market value.
But once you open up to full-remote working... The market broadens immensely.
Your "competitors" in the market are not bay-area people anymore. It's the whole US. If your company has branches in other countries too (think FAANGs) and the workforce was already spread across timezone then now most of the world is filled with potential competitors for your job.
And now with a huge supply of workers, your market value decreases a lot.
And to be 100% honest: as an european, if you (an american) think you're worth 250k and your employer is thinking of firing you and offering me 125k for your job... Well good luck with your next job search.
> Your "competitors" in the market are not bay-area people anymore. It's the whole US.
Agreed, not just American, anyone roughly in the same time zone. There are lots of well educated people in Peru/Chile/Brazil that would work 24hrs a day for a $25k salary.
Agreed, not just American, anyone roughly in the same time zone. There are lots of well educated people in Peru/Chile/Brazil that would work 24hrs a day for a $25k salary.
> employer has the right to treat you like a child receiving an allowance
i can’t understand this pov at all. unlike a child allowance, you can say no and court a different parent.
you are simply labor, and location based pay reflects this. the only ones complaining are those receiving less pay. it’s like when people complain (loudly) that “stealerships” add a markup above msrp for high demand cars, but the same people don’t complain about discounts from msrp for basic cars. if you don’t want the car at the offered price, move on!
i can’t understand this pov at all. unlike a child allowance, you can say no and court a different parent.
you are simply labor, and location based pay reflects this. the only ones complaining are those receiving less pay. it’s like when people complain (loudly) that “stealerships” add a markup above msrp for high demand cars, but the same people don’t complain about discounts from msrp for basic cars. if you don’t want the car at the offered price, move on!
Its just part of negotiation, The reason I will accept lower pay is to entice you to continue using my service, rather than replacing me with other people.
Its not about the location, employer should always try maximize profit, if they can get the same service with lower expense, they should.
Its not about the location, employer should always try maximize profit, if they can get the same service with lower expense, they should.
That is right, one can chose to accept any offer that works for them for whatever reason. If you have no leverage, you may need to accept an offer just to avoid being replaced by other people.
But, I am saying, that if you accept an offer that is based on what your employer thinks is an appropriate lifestyle for you, adjusted to the cost of living in your area, and not on the value of your work, that will immediately establish what I consider is a particularly inappropriate relationship between employer and employee. Of course this happens all the time for many reasons, but what we're seeing now is employers inventing and normalizing yet another, new tactic to deploy when trying to get you to accept less compensation. It's just another trick. But what's particularly insidious about this trick is that what they're doing is openly laying claim to your lifestyle by saying that: suppose you're a senior developer, you are entitled to organic groceries, whereas a junior developer is entitled to conventional produce, regardless of where you live, that's what you deserve. But that's wholly inappropriate: your compensation should depend on what you produce, and your lifestyle should be none of their business. If I want to move to Thailand or the middle of a field in Nebraska and save money, that's none of their business. There is no "objective" lifestyle that a senior developer should be entitled to. But that's this new trick they are trying to pull, and it's nothing short of disturbing and creepy.
But, I am saying, that if you accept an offer that is based on what your employer thinks is an appropriate lifestyle for you, adjusted to the cost of living in your area, and not on the value of your work, that will immediately establish what I consider is a particularly inappropriate relationship between employer and employee. Of course this happens all the time for many reasons, but what we're seeing now is employers inventing and normalizing yet another, new tactic to deploy when trying to get you to accept less compensation. It's just another trick. But what's particularly insidious about this trick is that what they're doing is openly laying claim to your lifestyle by saying that: suppose you're a senior developer, you are entitled to organic groceries, whereas a junior developer is entitled to conventional produce, regardless of where you live, that's what you deserve. But that's wholly inappropriate: your compensation should depend on what you produce, and your lifestyle should be none of their business. If I want to move to Thailand or the middle of a field in Nebraska and save money, that's none of their business. There is no "objective" lifestyle that a senior developer should be entitled to. But that's this new trick they are trying to pull, and it's nothing short of disturbing and creepy.
Its nothing disturbing and creepy, it is expected that employer to use all available 'tricks' they have.
The same way employee should use whatever 'tricks' at their disposal to get a higher pay.
The same way employee should use whatever 'tricks' at their disposal to get a higher pay.
Every single reason given for why the pay is what it is is just a veneer for the reality that the buyer and seller couldn’t (or think they couldn’t) get a better deal elsewhere.
For a buyer, that means a lower price. For the seller, that means a higher price.
Not a single other factor matters.
For a buyer, that means a lower price. For the seller, that means a higher price.
Not a single other factor matters.
This is the ground truth of how life works. Like gravity.
I keep repeating this on HN whenever a comp conversations come up. Unless lotsofpulp's comment resonates deeply with your bone marrow level intuition of what gets you paid, you're totally missing the point (and making bad choices.)
I keep repeating this on HN whenever a comp conversations come up. Unless lotsofpulp's comment resonates deeply with your bone marrow level intuition of what gets you paid, you're totally missing the point (and making bad choices.)
If you're going to say that, then you ought to accept that labeling the employer action creepy and disturbing is a great 'trick'.
If we can remove location-based pay as a negotiation tactic, merely by creating social disapproval because its 'invasive', and the like then that's wonderful for us as as employees.
Why shouldn't we work together to hobble employers at the negotiation table? They have enough power as it is.
If we can remove location-based pay as a negotiation tactic, merely by creating social disapproval because its 'invasive', and the like then that's wonderful for us as as employees.
Why shouldn't we work together to hobble employers at the negotiation table? They have enough power as it is.
OK, but if "lower pay" is a main enticing tactic, don't be shocked when someone else in a cheaper locale makes them a "better" offer and they accept it.
They don’t even need to be in a cheaper location.
I have worked with two kinds of employees that are willing to accept lower pay.
- those moving for a better lifestyle who have earned and saved considerably more elsewhere. I call these “working retirees”.
- those who have family sending them money to subsidize their cost of living in an expensive city.
I have worked with two kinds of employees that are willing to accept lower pay.
- those moving for a better lifestyle who have earned and saved considerably more elsewhere. I call these “working retirees”.
- those who have family sending them money to subsidize their cost of living in an expensive city.
[deleted]
Or they believe (possibly correctly) that you don't have as strong a negotiating position because there are fewer options for you based on location.
This is it. Free market at work. If you live in Tulsa, OK you won't have easy access to as many $150k jobs. The goal of the company is to get the best quality of work for the lowest price. Why would they pay extra?
People move, and these policies give people an incentive be in certain places. Paying more in SF is saying, "Please move to a city where you'll have more opportunities outside this company." The company is shelling out five or six figures to increase your cost of living, bid up SF house prices, and increase your likelihood of leaving the company. And even the other way around -- "Don't move somewhere you'd rather be, where you'd be happier and more loyal. We'll cut your pay if you do."
When looking at an individual employee's decisions, these policies don't seem to help the company. I think they only really make sense when thinking about populations, where people are less mobile and more fungible.
When looking at an individual employee's decisions, these policies don't seem to help the company. I think they only really make sense when thinking about populations, where people are less mobile and more fungible.
I'm not a fan of location-based pay, but I think this is too strident:
> that your remuneration is based on the lifestyle that they think is appropriate for you
Often, these schemes happen because it's employees who have lifestyle expectations. "I'd love to work for your company, but I'm not cutting my standard of living." And that's reasonable. The raw amount of money means way less to most people than what it means for their lives. And straight cash compensation is only one factor in picking a job.
The truth here is that the Internet has caused context collapse in far more than work. Labor markets used to be local. They still mostly are, but for those of us lucky enough to be able to work remotely, that's changing. That's going to have knock-on effects in other markets (housing, food, education, etc) for at least a couple of generations.
As we jointly work out the new normal, I think it's worth starting with the assumption that people are not all complete assholes. Yes, by all means let's watch out for worker exploitation; there's a lot of it. But from what I've seen, so many policies are just well-meaning people tinkering with things that they inherited. We can be firm about negotiating for fairness without assuming everybody's out to get us.
> that your remuneration is based on the lifestyle that they think is appropriate for you
Often, these schemes happen because it's employees who have lifestyle expectations. "I'd love to work for your company, but I'm not cutting my standard of living." And that's reasonable. The raw amount of money means way less to most people than what it means for their lives. And straight cash compensation is only one factor in picking a job.
The truth here is that the Internet has caused context collapse in far more than work. Labor markets used to be local. They still mostly are, but for those of us lucky enough to be able to work remotely, that's changing. That's going to have knock-on effects in other markets (housing, food, education, etc) for at least a couple of generations.
As we jointly work out the new normal, I think it's worth starting with the assumption that people are not all complete assholes. Yes, by all means let's watch out for worker exploitation; there's a lot of it. But from what I've seen, so many policies are just well-meaning people tinkering with things that they inherited. We can be firm about negotiating for fairness without assuming everybody's out to get us.
I'm against location based pay. But I'm not sure your argument is a good one against it.
Just about all benefits offered by employers, from maternity leave to health care, function as allowances for particular purposes. They pay a variable amount based on the varying needs of a workforce.
One could even relabel the location-based-pay as a "rent supplement". If everyone get the same pay but those paying crazy high rents get extra to ameliorate this, it sound better.
Which still isn't saying I like this idea. I don't think pay should be able to be easily translated to benefits and I think only things that are unalterably unequal, like health care and maternity leave, should be doled out as benefits.
But I don't think one can make the argument that "allowance" type pay is inherently offensive. I mean, one allowance thing that's totally reasonable is when employees have to go to conferences for a work and the employer gives them an allowance for the incidental expenses they're incur.
Just about all benefits offered by employers, from maternity leave to health care, function as allowances for particular purposes. They pay a variable amount based on the varying needs of a workforce.
One could even relabel the location-based-pay as a "rent supplement". If everyone get the same pay but those paying crazy high rents get extra to ameliorate this, it sound better.
Which still isn't saying I like this idea. I don't think pay should be able to be easily translated to benefits and I think only things that are unalterably unequal, like health care and maternity leave, should be doled out as benefits.
But I don't think one can make the argument that "allowance" type pay is inherently offensive. I mean, one allowance thing that's totally reasonable is when employees have to go to conferences for a work and the employer gives them an allowance for the incidental expenses they're incur.
You’re still confusing your costs as important here - which is very convenient for employers! It isn’t how they operate (if they’re smart anyway) in the open market, and if you’re smart you won’t operate that way in the labor market either.
Understand and negotiate based off the value you provide, and what you can bring to the business. Chances are, your local cost of living has very little to do with that.
Understand and negotiate based off the value you provide, and what you can bring to the business. Chances are, your local cost of living has very little to do with that.
You’re still confusing your costs as important here - which is very convenient for employers!
No, I'm just saying sometimes employers can reasonably take employee costs into account - health care, maternity leave, day care, etc. Not here, I agree employers should not consider this. But I think saying employers should never take variable employee costs into account is an argument that's wrong, so making that absolutist argument won't help the case.
No, I'm just saying sometimes employers can reasonably take employee costs into account - health care, maternity leave, day care, etc. Not here, I agree employers should not consider this. But I think saying employers should never take variable employee costs into account is an argument that's wrong, so making that absolutist argument won't help the case.
I don’t think that was the argument was it?
It’s all negotiations. If you think it’s worth taking a $10k paycut for a $5k (for the business)/$12k (as an individual) health plan, then it’s win-win.
If you take a $10k paycheck because you live in Nebraska (and nothing else), and the Company is in SF? That’s just bad negotiating.
If the company is in Nebraska and only pays $10k less and can get plenty of takers locally - then they won’t get many people from SF, and they’re probably fine with that.
It’s all negotiations. If you think it’s worth taking a $10k paycut for a $5k (for the business)/$12k (as an individual) health plan, then it’s win-win.
If you take a $10k paycheck because you live in Nebraska (and nothing else), and the Company is in SF? That’s just bad negotiating.
If the company is in Nebraska and only pays $10k less and can get plenty of takers locally - then they won’t get many people from SF, and they’re probably fine with that.
> offensive
You're really not doing the HN user stereotype of entitled valley types any favors using very personal ego-centred words such as "offensive".
You're really not doing the HN user stereotype of entitled valley types any favors using very personal ego-centred words such as "offensive".
Isn’t having a “wallet inspector” what working a salary gig is all about? Low financial risk for pre-determined financial reward?
It was, but they got rid of the pension and the gold watch so it really isn't like that anymore.
I like your allowance simile better than my post.
But, as a certain bearded German economist once noted, the remuneration of labour is not related to the value it produces. As long as there is a reserve mass of unemployed people, that remuneration is related to the minimum that the worker needs to survive. Agree or disagree with the rest, Marx was right on the money with this one.
Of course, since there is more demand than supply of qualified workers, remuneration rises above that minimum. But as long as an Indian developer is "glad" to do the same work as you for 1/4 pay...
Of course, since there is more demand than supply of qualified workers, remuneration rises above that minimum. But as long as an Indian developer is "glad" to do the same work as you for 1/4 pay...
Location-based pay is based on your market value. Different locations have different markets.
In a location constrained, pre wfh market you are right. Now, that is definitely not the case. For those working remotely before, it also pulls back the current more directly.
Local cost of living, if everyone is working remotely, has no bearing on the value you provide your employer. Discussing location based pay in that environment is rather absurd, is it not?
Local cost of living, if everyone is working remotely, has no bearing on the value you provide your employer. Discussing location based pay in that environment is rather absurd, is it not?
If it stops being the case, the salaries will equalize due to market pressures. But it is not the case and it probably will never be the case because different locations have different amenities and different economic situations in general, this coupled with the fact that lots of jobs can’t be done from home means that local job markets will always be differentiated.
It's not an if (for certain industries), it's been happening and is only accelerating. It's exactly what was behind the outsourcing to India of IT for instance.
The difference now is artificial constraints within countries around locale are loosening, meaning locals can play the same game (and take advantage of similar bid/ask spreads personally). IT work in India happened because while super hard to get started/get over the bar, the wage differential was huge (between what a viable candidate would accept, and what the company was willing to pay). Multinationals who could get over the bar to take advantage of it have reaped trillions.
For jobs that are fundamentally local, it is different (plumber for instance). The number of those jobs is decreasing over time, however.
This will likely result in a 'reverse brain drain' as long as conditions persist, with rural areas benefitting from smart and ambitious people no longer being forced to relocate to a city to benefit. They'll pump money into the local economy.
For people already remote, they'll have more competition and will need to continue to differentiate.
For those in cities, well - it's gonna be rough.
Long term, it's likely that center of gravity will shift back to the cities - physical distance does have beneficial effects, and at least when there isn't a pandemic, it tends to override the other issues with city life (competition for space means high rents, noise, etc.). It might take awhile though.
The difference now is artificial constraints within countries around locale are loosening, meaning locals can play the same game (and take advantage of similar bid/ask spreads personally). IT work in India happened because while super hard to get started/get over the bar, the wage differential was huge (between what a viable candidate would accept, and what the company was willing to pay). Multinationals who could get over the bar to take advantage of it have reaped trillions.
For jobs that are fundamentally local, it is different (plumber for instance). The number of those jobs is decreasing over time, however.
This will likely result in a 'reverse brain drain' as long as conditions persist, with rural areas benefitting from smart and ambitious people no longer being forced to relocate to a city to benefit. They'll pump money into the local economy.
For people already remote, they'll have more competition and will need to continue to differentiate.
For those in cities, well - it's gonna be rough.
Long term, it's likely that center of gravity will shift back to the cities - physical distance does have beneficial effects, and at least when there isn't a pandemic, it tends to override the other issues with city life (competition for space means high rents, noise, etc.). It might take awhile though.
And to address your concerns re: salary equalization - it's happened/happening for sure. It is why it is so important to uplevel and be the higher/more valuable employee/asset. If you're a good problem solver and software engineer, you can demand a higher wage, even with the equalization, as you're in a top %'tile market demand wise.
If you're aiming for low/mid-level (generic) employee, you're eventually going to have a hard time competing with someone who can survive on less. It has been what is causing a lot of the angst in the middle and lower class (especially in manufacturing jobs), as their labor is easy to outsource in many cases to cheaper places.
If you're aiming for low/mid-level (generic) employee, you're eventually going to have a hard time competing with someone who can survive on less. It has been what is causing a lot of the angst in the middle and lower class (especially in manufacturing jobs), as their labor is easy to outsource in many cases to cheaper places.
The employer setting most of the terms is the reality for most of the working class.
Weird argument. I guess you can have your freedom and live in some tent city in Palo Alto under the freeway, or live in a reasonable house anywhere else.
the only question, is how long employers will continue to pay a premium based on your postcode.
Do you have any recommendations on books to read to help with negotiation?
And please, read patio11's famous and log post about salary negotiation.
It'd be a start if people just started trying to do any negotiation.
Over 25 years in tech, I've hired many dozen developers. Only maybe 3-4 of the candidates I've given offers to in that time have tried negotiating.
I've never given an offer where there wouldn't be at least some room for us to negotiate.
Meanwhile I always negotiate when I receive offers, and have usually ended up with substantial increases over the initial offer.
Over 25 years in tech, I've hired many dozen developers. Only maybe 3-4 of the candidates I've given offers to in that time have tried negotiating.
I've never given an offer where there wouldn't be at least some room for us to negotiate.
Meanwhile I always negotiate when I receive offers, and have usually ended up with substantial increases over the initial offer.
I was one of those developers who didn't know you're supposed to negotiate. I ended up being friends with a guy who got hired at the same time into the same team, for a slightly lower position, and got paid about 10% more for it. Because he had asked.
That was 15 years ago, people didn't talk about this stuff as much back then, and hopefully I'm wiser now.
Next time I have a salary negotiation, if ever, I'm definitely going to scour HN for advice and read some books.
That was 15 years ago, people didn't talk about this stuff as much back then, and hopefully I'm wiser now.
Next time I have a salary negotiation, if ever, I'm definitely going to scour HN for advice and read some books.
One of the most important things I learned in life, and I'm really glad I learned it early, is that if you want something, ask for it. The worst that can happen is that the other person says no.
Or “no and we don’t like your attitude; offer retracted.” I think it’s rare, but it happened to me once and I was sore about it and am a bit less confident in my negotiating now (but I still do).
I could see that happening if two candidates are at the offer stage and you delayed your acceptance by negotiating and the other person accepted right away.
Unless you desperately need that job to stave off imminent homelessness, that's generally a good thing. An employer who outright refuses negotiation, or any request with a "no, thx, bye" is not someone you want to work for.
I would say any company that would retract an offer when you attempt to negotiate isn’t worth working for. Probably an awful culture. The only way I could see you losing out an offer at a good company is if the negotiation drags out long enough (weeks) that someone else comes along and agrees to take the role at X pay while you’re still negotiating.
I’ve hired many engineers. Neither myself, nor any cofounder has been insulted or angry by a counter-offer. Sometimes we said to ourselves “this is kinda high for someone at their experience level” and held firm or met in the middle, but most of the time if you ask you’ll squeeze at least 5K more out of it even if your counter was 30K higher than the offer.
I’ve hired many engineers. Neither myself, nor any cofounder has been insulted or angry by a counter-offer. Sometimes we said to ourselves “this is kinda high for someone at their experience level” and held firm or met in the middle, but most of the time if you ask you’ll squeeze at least 5K more out of it even if your counter was 30K higher than the offer.
That might be a problem if you've only got enough money for this month's rent, but otherwise any company that would pull that would abuse you in other ways had you been hired.
Speaking of rent, you can often negotiate that as well! When I was living in an apartment, any time there was a rent increase, I would go into the leasing office and ask if they could do anything about the increase. I always walked away with knocking around $100 off the monthly rent.
I've never seen that happen, and would never do it. Not doubting you, but I'd expect this to be rare enough that it's worth ignoring.
The closest I've seen was someone with wildly out of line expectations (a developer who asked for basically the whole employee option pool to himself). Even then we gave a counter-offer (that he declined).
Personally I'd see it as a sign they're not someone I'd want to work for.
The closest I've seen was someone with wildly out of line expectations (a developer who asked for basically the whole employee option pool to himself). Even then we gave a counter-offer (that he declined).
Personally I'd see it as a sign they're not someone I'd want to work for.
In hindsight, I overshot. But not by much. I considered their retraction to be in poor taste and poor faith. All it would have taken is a counter-offer to realign the discussion.
Yeah, I think you probably dodged a bullet. If people come to me with a ridiculous counter, all it tells me is they don't know what the market is like, and I'd have a conversation about that, and make another offer. If people come to me with a high counter but one that might be plausible, I'd ask them to justify it, explain why we can't/won't go that high, and counter.
If someone takes it as some perceived slight that you've asked for a higher amount, then consider they'd probably be equally offended if you asked for a raise down the road, and then you'd be in a bad spot...
Of course being able to not worry about being turned down is a luxury we can't always afford.
(Also, I have at times thought I massively overshot, and kicked myself because they immediately accepted; you'd be surprised how much of an increase you can ask for sometimes)
If someone takes it as some perceived slight that you've asked for a higher amount, then consider they'd probably be equally offended if you asked for a raise down the road, and then you'd be in a bad spot...
Of course being able to not worry about being turned down is a luxury we can't always afford.
(Also, I have at times thought I massively overshot, and kicked myself because they immediately accepted; you'd be surprised how much of an increase you can ask for sometimes)
I know it seems like that but most people simply “negotiate” by getting multiple offers and taking the one that suits them best, or leaving one company and joining another. In that way it’s a bit like a blind auction. Whatever room to negotiate you’ve left at the top of your offer represents risk that you’ve underestimated the other partys’ offers.
If we kept having a lot of people turn down offers, that'd likely be the case, but even if we assumed all rejected offers was down to pay, it'd mean most people are not "negotiating" that way either.
Could you be so kind as to link this?
Any negotiation books that you suggest?
Been years since I've read it but Getting to Yes is a nice slim volume that seems still to be hugely popular.
For me 'Getting to yes' was too idealistic. It is a classic and good starter but did find it that usable for me.
I was impressed though by radical approach of Chris Voss on 'Never Split the Difference'. Author is a former hostage negotiator, so there are also a lot intriguing stories included w high makes it a great read.
If you want to get your feet wet with a short writeup online, I found these two blog posts (part 1 and 2) to be extremely valuable. It does a fantastic job of making sure you're mentally framing the situation correctly, which makes an enormous difference.
part 1: https://haseebq.com/my-ten-rules-for-negotiating-a-job-offer...
part 2: https://haseebq.com/how-not-to-bomb-your-offer-negotiation/
part 1: https://haseebq.com/my-ten-rules-for-negotiating-a-job-offer...
part 2: https://haseebq.com/how-not-to-bomb-your-offer-negotiation/
I don't think it matters how a company or candidate justifies their offers and demands. It really comes down to their respective bargaining power. So when remote work increases the pool of potential candidates, it's no surprise that employers will try to use this to lower costs.
Ah, but it also increases the pool of potential employers.
It's not a symmetric increase. Employers that pay FANG level salaries are concentrated in a few major cities. Lots of very skilled developers scattered across the globe don't care about money that much, so they aren't tempted to move to SV for a dramatic salary bump. However, they may be tempted by a modest salary bump if they're allowed to stay with their social circle.
True, it’s the law of one price. However, privileges / capabilities aren’t evenly distributed. So, while remote does widen the labor market, wealthy countries tend to carry large shares.
It’s not a zero-sum game at all. Employees from wealthy countries can gain labor surplus through technology transfer a number of ways or even find business partners and employers.
Mutually beneficial exchange is the name of the game. It’s true that different folks achieve different relative success compared to their peers. That’s okay and good when it’s the product of honest just exchange.
It’s not a zero-sum game at all. Employees from wealthy countries can gain labor surplus through technology transfer a number of ways or even find business partners and employers.
Mutually beneficial exchange is the name of the game. It’s true that different folks achieve different relative success compared to their peers. That’s okay and good when it’s the product of honest just exchange.
I don’t know what x, y, and z you have in mind, but it seems that companies have pretty much standardized on cost of living adjustments to pay for remote workers. So maybe you can try to cherry-pick some numbers that help your case, but the data probably works against what you’re arguing for here. It feels like the ship has sailed, as long as enough other people are willing to accept location based pay then it will be the norm.
Also, I guess YMMV but I haven’t found this approach to be very effective. Lots of companies will openly admit they just can’t compete with FAANG salaries for instance. The recruiter wants to sign you for the sake of their commission, but they lose people all the time and aren’t going to lose sleep over you walking away. Even if you really are 1 in a million, the recruiter is not incentivized to avoid missing out on those people at all costs. They’re incentivized to bring in a steady stream of pretty good people, and you’re still just one person.
I’m not saying there is no use in negotiating, but you’re basically hyping it up as if there is some magic incantation that will let you convince anyone to pay you whatever you want. I think that does a disservice to anyone looking for salary advice. In my experience, if you can get a 5-20% increase from their first offer that’s about all you can expect. You’re better off applying for higher paying companies from the beginning, and learning skills/playing the politics to get promoted to higher levels (e.g. senior, staff, principal engineer) where the comp you want is in band, rather than trying to turn a mediocre offer into an amazing one due to sheer force of negotiation.
Also, I guess YMMV but I haven’t found this approach to be very effective. Lots of companies will openly admit they just can’t compete with FAANG salaries for instance. The recruiter wants to sign you for the sake of their commission, but they lose people all the time and aren’t going to lose sleep over you walking away. Even if you really are 1 in a million, the recruiter is not incentivized to avoid missing out on those people at all costs. They’re incentivized to bring in a steady stream of pretty good people, and you’re still just one person.
I’m not saying there is no use in negotiating, but you’re basically hyping it up as if there is some magic incantation that will let you convince anyone to pay you whatever you want. I think that does a disservice to anyone looking for salary advice. In my experience, if you can get a 5-20% increase from their first offer that’s about all you can expect. You’re better off applying for higher paying companies from the beginning, and learning skills/playing the politics to get promoted to higher levels (e.g. senior, staff, principal engineer) where the comp you want is in band, rather than trying to turn a mediocre offer into an amazing one due to sheer force of negotiation.
Try to get %20 from the stock market. If your tech role typically earns ~$100k/year, that conversation is a $20,000 phone call.
The difference between their first offer and 15 minutes on the phone with the right attitude and tools is what a lot of people make in a year. On an hourly 1-year contract rate haggle, upping $10/hr is $20,000 in the contract value. I'd call that a valuable phone call and probably the best return on $15.95 anyone ever spent, especially because it was probably just for some cheesy ebook on negotiation.
Is that hype?
I may have to write that cheesy ebook. :)
The difference between their first offer and 15 minutes on the phone with the right attitude and tools is what a lot of people make in a year. On an hourly 1-year contract rate haggle, upping $10/hr is $20,000 in the contract value. I'd call that a valuable phone call and probably the best return on $15.95 anyone ever spent, especially because it was probably just for some cheesy ebook on negotiation.
Is that hype?
I may have to write that cheesy ebook. :)
For sure, everyone should try to get more on their offer, it can be significant. I'm still not convinced there are many secrets an ebook can unlock, vs just asking for it and trying, as always, to be both confident and likable.
But I suspect it's equally possible whether you're in a low or high CoL area, I haven't seen anything to suggest otherwise. It's unrelated to the issue of whether the company will pay you more in certain locations than others.
But I suspect it's equally possible whether you're in a low or high CoL area, I haven't seen anything to suggest otherwise. It's unrelated to the issue of whether the company will pay you more in certain locations than others.
Can you recommend any books on negotiation? I checked your profile but I couldn't find what you were referring to earlier.
“Never Split The Difference”
>Lots of companies will openly admit they just can’t compete with FAANG salaries for instance.
Yeah. Anecdotally, many tech companies don't have big location-based pay differences across the US. But they mostly do that by not having offices or at least major offices in places like SV and NYC--and basically don't really try to salary match the big tech companies. I have a feeling that if you looked at most tech employers you'd see a lot more outflow to FAANG than the other way around.
Yeah. Anecdotally, many tech companies don't have big location-based pay differences across the US. But they mostly do that by not having offices or at least major offices in places like SV and NYC--and basically don't really try to salary match the big tech companies. I have a feeling that if you looked at most tech employers you'd see a lot more outflow to FAANG than the other way around.
> Comp isn't a reward for good behaviour unless you are a prisoner begging guards for privileges or an animal doing tricks for treats - it's earned from value.
Comp is a retention mechanism that’s determined by supply and demand. Not a single reasonable company will be willing to pay you more that’s bare minimum to keep you to stay. Hiring isn’t about rewarding workers based on the value they provide, it’s about optimizing costs so you can maximize profits.
While location based term is a BS term, it is very real market mechanism. In your local market there’s less non remote companies than in high cost of living areas, that are willing to compete for you, so your price point is lower.
Comp is a retention mechanism that’s determined by supply and demand. Not a single reasonable company will be willing to pay you more that’s bare minimum to keep you to stay. Hiring isn’t about rewarding workers based on the value they provide, it’s about optimizing costs so you can maximize profits.
While location based term is a BS term, it is very real market mechanism. In your local market there’s less non remote companies than in high cost of living areas, that are willing to compete for you, so your price point is lower.
> Not a single reasonable company will be willing to pay you more that’s bare minimum to keep you to stay.
That's definitely not true. Indeed, I think that's a pretty bad way to think about comp, leading to an adversarial employer/employee relationship.
As examples, consider Netflix, which is widely known for paying above market, or Gravity Payments, which changed their minimum pay to $70k/year: https://en.wikipedia.org/wiki/Gravity_Payments
I'm just about to post 3 new positions, and I have no interest in squeezing people on cash comp. I want people who are happy, relaxed, and feel like they're being treated well. And I also want a fair salary structure. Could I pressure bad negotiators and naive people and pay less? Absolutely. Will I? Fuck no. Maximizing shareholder value has been called "the world's dumbest idea". I wouldn't go that far, but it's certainly up there.
That's definitely not true. Indeed, I think that's a pretty bad way to think about comp, leading to an adversarial employer/employee relationship.
As examples, consider Netflix, which is widely known for paying above market, or Gravity Payments, which changed their minimum pay to $70k/year: https://en.wikipedia.org/wiki/Gravity_Payments
I'm just about to post 3 new positions, and I have no interest in squeezing people on cash comp. I want people who are happy, relaxed, and feel like they're being treated well. And I also want a fair salary structure. Could I pressure bad negotiators and naive people and pay less? Absolutely. Will I? Fuck no. Maximizing shareholder value has been called "the world's dumbest idea". I wouldn't go that far, but it's certainly up there.
>> As examples, consider Netflix, which is widely known for paying above market
That's not a counterexample of what the post you're replying to is talking about. Netflix feels they need to "overpay" to get the caliber of talent they want, and also to make it harder for it to be tempted to leave. At the end of the day it's what they feel to be the "bare minimum to keep you to stay" for the kind of people they want.
>> I want people who are happy, relaxed, and feel like they're being treated well.
Right, same thing. You want that because that's what strong employees demand and is your strategy for getting sustainable quality output out of them. If you were just a good guy, you'd pay MORE than that :)
That's not a counterexample of what the post you're replying to is talking about. Netflix feels they need to "overpay" to get the caliber of talent they want, and also to make it harder for it to be tempted to leave. At the end of the day it's what they feel to be the "bare minimum to keep you to stay" for the kind of people they want.
>> I want people who are happy, relaxed, and feel like they're being treated well.
Right, same thing. You want that because that's what strong employees demand and is your strategy for getting sustainable quality output out of them. If you were just a good guy, you'd pay MORE than that :)
I agree with you on Netflix; I have been corrected by you and others. But I disagree with you on the latter. In practice people who believe it's important to pay the "bare minimum to keep you to stay" act very differently.
Netflix is skewing hiring heavily towards very senior people, and is paying all cash, no stock. For the level of skills, total compensation you get from them is pretty much in line with peer big tech in Bay Area market.
You can call maximizing profits maximizing shareholder value, and often they’re aligned. But it’s how businesses were always designed to work, long before stock markets. Is it fair? Most likely not, but it’s business 101, same as me writing reliable production code is engineering 101.
You can call maximizing profits maximizing shareholder value, and often they’re aligned. But it’s how businesses were always designed to work, long before stock markets. Is it fair? Most likely not, but it’s business 101, same as me writing reliable production code is engineering 101.
Businesses are not necessarily designed to maximize profits. In theory they’re designed to provide a comfortable lifestyle for the owner and keep them busy.
If that involves maximizing profits, then great, but if the owner enjoys doing work with happy, un-stressed people more than he does a few humdred extra dollars in his pocket, it’s clearly not (only) about optimizing profits.
If that involves maximizing profits, then great, but if the owner enjoys doing work with happy, un-stressed people more than he does a few humdred extra dollars in his pocket, it’s clearly not (only) about optimizing profits.
> But it’s how businesses were always designed to work
[citation needed]
As far as I can tell, that's a modern, MBA-ish fantasy about the nature of business. I have small business owners in my family going back generations. Maximizing profit was not the goal. It was making a living and being part of a community. This is definitely not uncommon. See, for example, the writings of the late economist Alison Snow Jones: https://www.interfluidity.com/v2/1095.html
[citation needed]
As far as I can tell, that's a modern, MBA-ish fantasy about the nature of business. I have small business owners in my family going back generations. Maximizing profit was not the goal. It was making a living and being part of a community. This is definitely not uncommon. See, for example, the writings of the late economist Alison Snow Jones: https://www.interfluidity.com/v2/1095.html
> But it’s how businesses were always designed to work
Who taught you this? If there's a specific historian pushing this narrative I'd love to know who it is, because on the surface this claim sounds absolutely outlandish.
Who taught you this? If there's a specific historian pushing this narrative I'd love to know who it is, because on the surface this claim sounds absolutely outlandish.
gravity also famously walked that back. netflix may be famous for paying above market but actually they pay market.
Can you link or point me to a source about Gravity Payments walking that back? I can't find anything about it.
Yeah, I don't think that's true. The most recent story I can find about them does involve pay cuts, but they're voluntary and temporary as a way of dealing with the pandemic: https://www.geekwire.com/2020/gravity-payments-employees-vol...
mea culpa! I was thinking about a different company, a smallish law or other professional services company, whose name I don't recall. It wasn't a high minimum wage, rather everyone top to bottom was paid exactly the same amount. was
Yes, an easy way to understand this is to imagine yourself living where costs are low, and pay is adequate. Now you interview for a job that requires you to relocate to London or San Francisco. You wouldn't accept the offer unless the pay was much higher.
Feels like this reasoning changes for those starting in San Francisco or London, looking to relocate?
Feels like this reasoning changes for those starting in San Francisco or London, looking to relocate?
Companies probably like people moving from the middle of nowhere to SF or London better though. Especially young kids will probably undervalue themselves. They may know or figure out that you gotta ask for more salary in those areas but they might not know how much exactly they need to ask for and/or go down too much when HR starts their spiel.
Hopefully they've learned enough about how much the company values them and how much it cares about them, that they don't just accept a relocation and whatever salary their company gives them. I'm not too hopeful though, given what working conditions they already accept while living in SF (or wherever).
Hopefully they've learned enough about how much the company values them and how much it cares about them, that they don't just accept a relocation and whatever salary their company gives them. I'm not too hopeful though, given what working conditions they already accept while living in SF (or wherever).
> total comp you are looking for as a part of your own plan for your life.
I very recently learned a damned hard lesson in this. I believed in the product, I was given interesting problems to solve, there were good benefits, there was a good culture, I had stock options. The pay was shit, the options evaporated during a merger, and I want to buy a home.
Next round, I'm getting paid my worth and it's going to remote. "Believing in the product" is just a load of bullshit that C-suite spin to enrich themselves. They believe in nothing but their own bottom line, so why shouldn't you? Figure out what you are worth, what working conditions (overtime etc.) you can tolerate, and do good work for good money.
I very recently learned a damned hard lesson in this. I believed in the product, I was given interesting problems to solve, there were good benefits, there was a good culture, I had stock options. The pay was shit, the options evaporated during a merger, and I want to buy a home.
Next round, I'm getting paid my worth and it's going to remote. "Believing in the product" is just a load of bullshit that C-suite spin to enrich themselves. They believe in nothing but their own bottom line, so why shouldn't you? Figure out what you are worth, what working conditions (overtime etc.) you can tolerate, and do good work for good money.
The best advice I've seen is to value stock options at zero. Most startups fail. There can also be huge dilution and other risks. At the end of the day, it comes down, as you're saying, to whether you enjoy working there or not, and whether or not the base salary is enough to make it worthwhile.
> The best advice I've seen is to value stock options at zero.
I don't know. I understand that, but on the flip side I got lucky and currently my equity is worth money. In SV equity can make up a large portion of your compensation, it shouldn't be ignored.
Sure, generally equity from a public company is worth more money. But equity at startups can still be valuable. A better conservative approach to startup equity would be to negotiate first for a good base salary and then negotiate for equity. VC-funded startups can pay well.
I don't know. I understand that, but on the flip side I got lucky and currently my equity is worth money. In SV equity can make up a large portion of your compensation, it shouldn't be ignored.
Sure, generally equity from a public company is worth more money. But equity at startups can still be valuable. A better conservative approach to startup equity would be to negotiate first for a good base salary and then negotiate for equity. VC-funded startups can pay well.
Can you extract actual money from your equity or is it locked in until some future event happens? Private stock can be internally valued highly but the hard part is extracting the value. Before going public so many events can legally occur to reduce the value of your shares.
Don't count your chickens before they have hatched.
Don't count your chickens before they have hatched.
This is true of all variable compensation components, regardless of being stock options, profit sharing or discretionary bonuses. You need to weight it by risk, which typically means zero real value and potentially a nice surprise.
I will say that it's not BS to "believe in the product and have interesting problems to solve." I've been there myself.
However, you have to look out for #1 and "interesting problems to solve" won't pay the mortgage, so you better make sure that despite how great the job is, you are paid at least the market rate.
However, you have to look out for #1 and "interesting problems to solve" won't pay the mortgage, so you better make sure that despite how great the job is, you are paid at least the market rate.
From the outside it looks like you're swinging too far the other way now. Pay is known to be a huge motivator to a specific point, then fade rapidly; that's where a product you believe in and interesting work picks up. It sounds like you didn't get enough money, or your needs changed, and obviously it's best if you get both types of rewards. I just quit my job knowing I was getting paid more than comparable coworkers because I was bored though, so try and be conscious and intentional in your own motivators.
I would say there's an equilibrium (that many people don't seem to reach).
With an actual objective look at it, I couldn't care less for any of the products of my past (or current) companies. However, I'm able to care about doing my best work for whatever the company is building but I also haven't had to contend with having to build stuff that I actively disbelieve in (like no advertising for example). I do like the fact that my companies have used reasonably recent technologies and at times also "too new technologies" - as in "the newest JS framework that nobody knows yet and that screws up all the time and you can't google for troubleshooting". So that keeps me interested enough. However, I am not someone that will work 80 hour weeks just because I am allowed to work on project X or with technology Y or because I "believe in the product". That's what many companies are trying to achieve. You believe in Facebook and their product, you get 'great perks' and are willingly staying at the office for way longer than you should for your own good.
The other end of the spectrum is unionized workers that will drop everything as soon as the clock hits 5p.m. And no I'm not talking Walmart cashier type work here. It can be understandable enough I suppose given how some companies treat workers but so far my companies have been treating me well enough.
With an actual objective look at it, I couldn't care less for any of the products of my past (or current) companies. However, I'm able to care about doing my best work for whatever the company is building but I also haven't had to contend with having to build stuff that I actively disbelieve in (like no advertising for example). I do like the fact that my companies have used reasonably recent technologies and at times also "too new technologies" - as in "the newest JS framework that nobody knows yet and that screws up all the time and you can't google for troubleshooting". So that keeps me interested enough. However, I am not someone that will work 80 hour weeks just because I am allowed to work on project X or with technology Y or because I "believe in the product". That's what many companies are trying to achieve. You believe in Facebook and their product, you get 'great perks' and are willingly staying at the office for way longer than you should for your own good.
The other end of the spectrum is unionized workers that will drop everything as soon as the clock hits 5p.m. And no I'm not talking Walmart cashier type work here. It can be understandable enough I suppose given how some companies treat workers but so far my companies have been treating me well enough.
Right, this was more along my line of thinking "good work for good money." I'm still delivering great ideas and code for my new/acquisition employer, but their money isn't good so I'm not sticking around.
My main contention with "believe in the product" is that it's a canned phrase that I've heard time and time again, to encourage employees to "pull through for our mission" through "sacrifice from your family that is appreciated." The only people who ever benefit from that are the C-suite; customers get broken software coded by broken developers and support has to break themselves fixing the mess. It's a meme, by the purest definition, and it seems to work: people (myself included) get riled up in cameraderi and put themselves and their family second.
If they truly appreciated our sacrifices, we'd have money in our bank accounts, not "belief in the product."
My main contention with "believe in the product" is that it's a canned phrase that I've heard time and time again, to encourage employees to "pull through for our mission" through "sacrifice from your family that is appreciated." The only people who ever benefit from that are the C-suite; customers get broken software coded by broken developers and support has to break themselves fixing the mess. It's a meme, by the purest definition, and it seems to work: people (myself included) get riled up in cameraderi and put themselves and their family second.
If they truly appreciated our sacrifices, we'd have money in our bank accounts, not "belief in the product."
Slightly off topic, In 2019 I did some work for a company. The project started when they were in a pinch regarding the product, and I just happened to have the expertise that they needed (very niche expertise).
I quoted a figure that is usually reserved for the Thoughtworks of the world rather than individual contractors. They accepted without hesitation.
The project went well, and eventually ended in a support contract. Fast-forward ~2 years and there is a new head of procurement. In a conversation he balked at approving a purchase order for a large chunk of work that they want done this year and said something about wanting to negotiate closer to the work.
At the time I couldn't help think 'good luck with that'. If anything time has only strengthened my position. The only other person knowledgeable about the product at the company moved on to a new job. I'm the only person that now knows the domain (let alone the code base).
To your point, it's all about knowing the position that you're in. I'm not likely to be an asshole about it cough 2021 rate cough, but they're not likely to have success negotiating a better price either.
I quoted a figure that is usually reserved for the Thoughtworks of the world rather than individual contractors. They accepted without hesitation.
The project went well, and eventually ended in a support contract. Fast-forward ~2 years and there is a new head of procurement. In a conversation he balked at approving a purchase order for a large chunk of work that they want done this year and said something about wanting to negotiate closer to the work.
At the time I couldn't help think 'good luck with that'. If anything time has only strengthened my position. The only other person knowledgeable about the product at the company moved on to a new job. I'm the only person that now knows the domain (let alone the code base).
To your point, it's all about knowing the position that you're in. I'm not likely to be an asshole about it cough 2021 rate cough, but they're not likely to have success negotiating a better price either.
[deleted]
This whole thread is side-stepping the point of the original article. As I understand it, the point is this: if we're going to get on a moral high horse about equal pay, then we should also apply that standard to the things we consume. So I'd think that links to ethical consumption guides would be more on point for this thread than further discussion of what _we_ are paid.
Oh, by the way, Starbucks has "fair-trade" coffee, which costs more because the farmers get a decent wage.
And the produce I buy at the grocery store comes from Florida, Texas, and California that hire legal immigrants with an American minimum wage.
I’m all for clothes that I want being manufactured for a fair price (e.g. not next best to slave labour)
But it should be just as easy to buy those as others. Right now everything is made China. It’s super hard to find made in [home country] stuff
But it should be just as easy to buy those as others. Right now everything is made China. It’s super hard to find made in [home country] stuff
[deleted]
[deleted]
I doubt the employer is considering what is moral when they cut your pay. It's all just rhetoric to them.
Sure. And my point is that we who are relatively fortunate should focus on what we're indirectly doing to people less fortunate than us, and what we can do instead. In other words, we shouldn't keep seeing ourselves as victims.
That would be a good point, unfortunately the article misses it entirely by advocating people don't have to 'right' to demand equal pay because they're guilty of the same thing (by association).
It's the kind of tit-for-tat moral whataboutism that really doesn't do much to solve either problem.
It's the kind of tit-for-tat moral whataboutism that really doesn't do much to solve either problem.
True, the author backed away from the uncomfortable point when they wrote:
> I don’t have a good answer to this, but I buy Chinese- and Bangladeshi-manufactured clothes anyway.
But that doesn't mean we should avoid the more difficult discussion. I know that I'm privileged, and I figure I should focus on what I do, not what's done to me. I expected more commenters on this thread to take that position. As it is, the insistence on discussing what we are paid just makes us look like prima donnas.
> I don’t have a good answer to this, but I buy Chinese- and Bangladeshi-manufactured clothes anyway.
But that doesn't mean we should avoid the more difficult discussion. I know that I'm privileged, and I figure I should focus on what I do, not what's done to me. I expected more commenters on this thread to take that position. As it is, the insistence on discussing what we are paid just makes us look like prima donnas.
Negotiation only works if both parties are equal. You are not equal to Facebook, they have a hiring pipelines miles long to replace you, and have no need to negotiate anything with you. The cost to replace you is just the cost of doing business.
I hate how this always comes up as if the hiring model is in any way balanced between an employer and employee.
I was once asked by a New York based company, at one of their remote offices, what I wanted for a salary. I said “$180k, what you’re paying for this position in NY”. They said “No. We know what you were making before, so we’ll offer you $5k over that.” It was never a negotiation.
I hate how this always comes up as if the hiring model is in any way balanced between an employer and employee.
I was once asked by a New York based company, at one of their remote offices, what I wanted for a salary. I said “$180k, what you’re paying for this position in NY”. They said “No. We know what you were making before, so we’ll offer you $5k over that.” It was never a negotiation.
> Negotiation only works if both parties are equal.
That is not true at all. It only works if both parties have something of value that the other wants. It's always a negotiation, but the only thing that ever matters in a negotiation is the BATNA (best alternative to negotiated agreement) on both sides.
If your BATNA is unemployment and their BATNA is a minor delay getting someone almost exactly equivalent to you, then you'll take their offer and they'll politely decline if you ask for more. If your BATNA is one of a few other competing offers all of which excite you, and their BATNA is having to settle for someone who doesn't bring your particular expertise to the company, or worse, having to start their search over again, you're in a much stronger position to ask for more money.
That is not true at all. It only works if both parties have something of value that the other wants. It's always a negotiation, but the only thing that ever matters in a negotiation is the BATNA (best alternative to negotiated agreement) on both sides.
If your BATNA is unemployment and their BATNA is a minor delay getting someone almost exactly equivalent to you, then you'll take their offer and they'll politely decline if you ask for more. If your BATNA is one of a few other competing offers all of which excite you, and their BATNA is having to settle for someone who doesn't bring your particular expertise to the company, or worse, having to start their search over again, you're in a much stronger position to ask for more money.
Your batna is only unemployment if Facebook is the only company on the face of planet that will hire you
Philosophically yes, but "unemployment" and "unemployed for another month that I really can't afford while I go through this whole process yet again with another company who's just going to do the same damn thing" can feel pretty equivalent.
As a general rule, never disclose current or old salary. Just because you get asked, doesn't mean you need to tell anyone.
I usually politely sidestep the "what's your current salary?" with a "in rolling to accept at least x, but we can negotiate if both parties are satisfied and get to offers". If a recruiter insists, I tell them I have a personal rule to never disclose that. I think I have lost a single prospect, which likely was never real to begin with. Likely just fishing.
While I'm at it, I never mention who my current employer is either. I usually obscure it on my cv of I'm still employed. I also had a request recently to provide a scan of my passport on initial application, which i also declined.
Honestly, recruiters think they can ask for any and all personal information they want. If you have value, no one will drop you because of it.
I usually politely sidestep the "what's your current salary?" with a "in rolling to accept at least x, but we can negotiate if both parties are satisfied and get to offers". If a recruiter insists, I tell them I have a personal rule to never disclose that. I think I have lost a single prospect, which likely was never real to begin with. Likely just fishing.
While I'm at it, I never mention who my current employer is either. I usually obscure it on my cv of I'm still employed. I also had a request recently to provide a scan of my passport on initial application, which i also declined.
Honestly, recruiters think they can ask for any and all personal information they want. If you have value, no one will drop you because of it.
You can use this to your advantage by setting the anchor. I'd never give a dollar figure but I would give an acceptable range. At my current position there's a variable comp component based on personal and company performance; this is a legitimate opportunity to give a forward-looking optimistic range: "Looking towards the next year, if I meet performance metrics similar to what I've demonstrated in the past I will be somewhere in the range of x and y".
>> I never mention who my current employer is either
Why is this? It's typically the most relevant information to a new position, and usually trivial to determine without you volunteering it.
>> I never mention who my current employer is either
Why is this? It's typically the most relevant information to a new position, and usually trivial to determine without you volunteering it.
I think next time I will say, “Sure, I’ll tell you my salary once you tell me those of the hiring manager and my new teammates. That way we all have the relevant information.”
> As a general rule, never disclose current or old salary
Don’t worry, Equifax takes care of that for us. Both who you’re currently working for, and your current salary. It’s a service it offers to HR departments across the US.
Don’t worry, Equifax takes care of that for us. Both who you’re currently working for, and your current salary. It’s a service it offers to HR departments across the US.
Equifax does not have accurate information. Do you know something I don't?
One time they thought I worked on staff at the local zoo. Seriously.
It would be a waste of effort for HR. They don't have time for that I don't think. They want to get to a number not do forensics on your background.
One time they thought I worked on staff at the local zoo. Seriously.
It would be a waste of effort for HR. They don't have time for that I don't think. They want to get to a number not do forensics on your background.
Bonuses and RSUs presumably give you wiggle room to handwave your total comp though.
Refusing to answer a fact seeking question in a negotiation isn’t great strategy. it may not even help your case. if you make too little, that’s already your problem. Someone offering you more than what you make is a net positive. Withholding information leading to a whitheld offer does you no good.
I've had people say that they already had other offers well in excess of current pay, making current pay moot. It's not a fact seeking question in a conventional sense. It's just one method of trying to move the process along with least effort. If you give an answer then they can make an effective offer quicker. If you don't there may be more work, that's all.
Suppose you are just finishing a Ph.D. and took a few years off. Suppose you took a year or two to do freelance or work 1099. Suppose you went abroad to work for a year or two to take of your dying parent. These are all things I have run into.
Edit: One more good one. I've known people who won a green lottery or married an American citizen they met abroad. Showed up in USA with lots of skills having made much less in Eastern Europe.
Suppose you are just finishing a Ph.D. and took a few years off. Suppose you took a year or two to do freelance or work 1099. Suppose you went abroad to work for a year or two to take of your dying parent. These are all things I have run into.
Edit: One more good one. I've known people who won a green lottery or married an American citizen they met abroad. Showed up in USA with lots of skills having made much less in Eastern Europe.
Do you prefer other people put in more effort than necessary?
If I understand your point, you're only considering marginal engineers that aren't expected to make a significant contribution to a product, and don't have competing offers.
In the other case, the company needs to accomplish something, believes you can do it, and you have a list of companies sending you offers.
Thats not so far fetched! Many of us hit that point in our careers.
In the other case, the company needs to accomplish something, believes you can do it, and you have a list of companies sending you offers.
Thats not so far fetched! Many of us hit that point in our careers.
> you're only considering marginal engineers that aren't expected to make a significant contribution to a product
So, 99% of the workforce? Or, 99.9999% if you consider that companies just don’t give a fuck unless you happen to be Guido van Rossem?
HR departments, who approve/deny pay changes, don’t care. My current company is being forced (with the approval of the board) to compensate high performers in alternative ways (like stock grants, or vacation time) if they’re outside of the “approved pay bands”.
I know someone who 100% qualifies for a title of “high performer” (they promoted him to a director a month after this) who would have had his pay cut in half if he moved away from his current location due to “remaining competitive with the local market”.
So, 99% of the workforce? Or, 99.9999% if you consider that companies just don’t give a fuck unless you happen to be Guido van Rossem?
HR departments, who approve/deny pay changes, don’t care. My current company is being forced (with the approval of the board) to compensate high performers in alternative ways (like stock grants, or vacation time) if they’re outside of the “approved pay bands”.
I know someone who 100% qualifies for a title of “high performer” (they promoted him to a director a month after this) who would have had his pay cut in half if he moved away from his current location due to “remaining competitive with the local market”.
Can they really have right to know where you are at every instant in time?
You could be a resident of San Francisco but just rent a token shared bedroom with a bunch of people just to have an SF address, or even a UPS box, and actually be on working vacations in random houses across the country close to 100% of the time, and I'd say they shouldn't have a right to know exactly where you are through your journey, only what times you will be working. Everything else including location should be abstracted out if it's defined as a remote job.
You could be a resident of San Francisco but just rent a token shared bedroom with a bunch of people just to have an SF address, or even a UPS box, and actually be on working vacations in random houses across the country close to 100% of the time, and I'd say they shouldn't have a right to know exactly where you are through your journey, only what times you will be working. Everything else including location should be abstracted out if it's defined as a remote job.
There are tax implications to where you live and work. If you're moving around the country say one new state every month, you're required to file taxes in all the states that you've worked from and received salary.
This increases the burden on both the employer and employee.
This increases the burden on both the employer and employee.
And some states are starting to crack down on this sort of thing. Someone was telling me that their company is going to start tracking time spent in different locations based on expense reports so that they can take appropriate actions (and have the employee do so as well) if they're above thresholds.
> based on expense reports
Don't expense anything from the state you are in.
Have everything shipped to an address in California and forwarded.
This is the snail mail version of a VPN, and I'm not sure why people are downvoting me on a hacker site. Hacking the world is what we do. This is how we stand up for our privacy. If you use VPNs at all in your online life to conceal your location there is no reason you can't invent a VPN for packages and mail as well.
Don't expense anything from the state you are in.
Have everything shipped to an address in California and forwarded.
This is the snail mail version of a VPN, and I'm not sure why people are downvoting me on a hacker site. Hacking the world is what we do. This is how we stand up for our privacy. If you use VPNs at all in your online life to conceal your location there is no reason you can't invent a VPN for packages and mail as well.
I don't think the hacking argument will stand-up when you're up again the IRS for tax evasion.
Don't evade taxes. The only thing I'm suggesting evading and standing up against is location-based salary discrimination.
Remote workers should be allowed to move and live wherever they want as long as they can be online at hours that are useful for the company, and they should be treated as a black box that gets work done and paid according to what they get done, not where they get it done.
Remote workers should be allowed to move and live wherever they want as long as they can be online at hours that are useful for the company, and they should be treated as a black box that gets work done and paid according to what they get done, not where they get it done.
Don't get my position wrong, I'm all for freedom of workers moving around and working from wherever they want.
The issue is the current regulatory and taxation structures aren't built for that. You're encountering friction because of these current systems.
The way to properly address this js to overhaul the system itself, this is by legislation and having representation that is aligned with what you want.
"Hacking" around it isn't the way to go.
To take a coding analogy, you're currently frustrated with the limitations of the architecture, which is understandable and I emphasize. But adding hacky patches to get around it isn't the way to go.
Unfortunately architectural overhauls in society are slow and take a long time.
I strongly encourage you to get involved in any grassroots movement to further the way you want to the world to become.
The issue is the current regulatory and taxation structures aren't built for that. You're encountering friction because of these current systems.
The way to properly address this js to overhaul the system itself, this is by legislation and having representation that is aligned with what you want.
"Hacking" around it isn't the way to go.
To take a coding analogy, you're currently frustrated with the limitations of the architecture, which is understandable and I emphasize. But adding hacky patches to get around it isn't the way to go.
Unfortunately architectural overhauls in society are slow and take a long time.
I strongly encourage you to get involved in any grassroots movement to further the way you want to the world to become.
Fundamentally, there's an incompatibility between living in a country that normally has complete freedom of movement between states and a system that also essentially requires you to be a resident of a specific state for reason of things like driver's licenses and state income taxes (although if you split your time in multiple locations you may actually be required to file in multiple locations anyway). It can be done legally but, as I commented up-thread, a number of states are starting to look harder at people who spend a lot of time in their state but are paying all their income taxes elsewhere. You can't just say you live in Nevada because you have a PO Box there.
> overhaul the system itself
I agree with this, but it will take decades, and I'll leave it to politics experts to deal with that. There are things I want to get done in my life, and I will get them done without needing to involve myself in that mess. If it needs me to move into another country or jurisdiction to get those things done, I'm open to that.
I respect those that want to go fight that battle, but everyone needs to pick their own battles to fight, and I have enough battles I'm fighting already.
> adding hacky patches to get around it isn't the way to go
I disagree. You should fix the architecture but you should also feel free to use hacky patches until the fix is done.
Meanwhile it isn't the taxation structure I'm arguing against, it's the salary discrimination by location.
If a company values my work at $X/year they should give me $X/year independent of all other considerations, and also give someone else who accomplishes the same exact work $X/year independent of other considerations.
I agree with this, but it will take decades, and I'll leave it to politics experts to deal with that. There are things I want to get done in my life, and I will get them done without needing to involve myself in that mess. If it needs me to move into another country or jurisdiction to get those things done, I'm open to that.
I respect those that want to go fight that battle, but everyone needs to pick their own battles to fight, and I have enough battles I'm fighting already.
> adding hacky patches to get around it isn't the way to go
I disagree. You should fix the architecture but you should also feel free to use hacky patches until the fix is done.
Meanwhile it isn't the taxation structure I'm arguing against, it's the salary discrimination by location.
If a company values my work at $X/year they should give me $X/year independent of all other considerations, and also give someone else who accomplishes the same exact work $X/year independent of other considerations.
Many companies don't make "significant" (yes, word doing a lot of work) cost of living adjustments within the US. But most of them probably have salary bands that are materially lower than top of SV scale. Flat wages for remote across the country isn't a general problem but it is if you want to get paid what Google will pay locally.
Am I going to ship my hotel room? It's business travel that's being discussed here.
They need to know where your primary residence is. Because of things like payroll taxes, social security taxes, income tax withholding and unemployment insurance. Which vary by state and (sometimes) city. Not knowing means the company is not in compliance with labor laws and can lead to rather large fines.
> They need to know where your primary residence is
I think even for privacy reasons it's perfectly reasonable to never give out your address. You can always give out a UPS box as your primary address.
You could also have 2 residences in 2 states or even 2 countries and have them both with weight=0.5 and no primary node.
The entire idea of a "residence" address is an invented notion and de facto optional. You could always be on the move in an RV for example and still go show up for remote work every day.
I think even for privacy reasons it's perfectly reasonable to never give out your address. You can always give out a UPS box as your primary address.
You could also have 2 residences in 2 states or even 2 countries and have them both with weight=0.5 and no primary node.
The entire idea of a "residence" address is an invented notion and de facto optional. You could always be on the move in an RV for example and still go show up for remote work every day.
I'm no lawyer, but that sounds like tax fraud to me.
Ok, help me out here. I currently work for a company that has offices all over the globe. Pre Covid, I was in the office 5 days a week.
I work in Texas, with pretty low COL. The people who work in DC, NY, or SF all get paid more than I do. Should I get paid the same as them?
Our company also has people in India (some are outsourced, but we have many full time associates). Should I get paid the same as them?
What, then, is the value of my work? If I ask my employeer to disregard location based pay, how much do I get paid?
I work in Texas, with pretty low COL. The people who work in DC, NY, or SF all get paid more than I do. Should I get paid the same as them?
Our company also has people in India (some are outsourced, but we have many full time associates). Should I get paid the same as them?
What, then, is the value of my work? If I ask my employeer to disregard location based pay, how much do I get paid?
You determine the value you're willing to work for: not just your employer. It sounds like you've never looked for a job while still employed. Take your location out of the equation: Is another employer willing to pay more for your skills? If so, you should be interviewing. When I'm hiring an employee I'm looking for anybody that has the skills I need, not their location. I'll pay top dollar to get hard-to-find skills regardless of where that person is located. I'm not going to tell them "Well you live in India so I'm only going to pay you half of what you're looking for" because they'll reject my offer and take one from another employer. If your colleagues are making more than you and your skills are comparable then you need to begin interviewing immediately because you're undervaluing your own work.
It's shocking to me that I had to read a whole blog post and scroll through 50+ comments on HN to find someone who understood how salaries work. Well said.
I feel like this entire discussion can be summed up in four sentences: "Feel like you're not making enough? Find another company that will pay you more. No one will pay you more? Keep adding skills until they do."
Everything else is just window dressing for the negotiating table.
I feel like this entire discussion can be summed up in four sentences: "Feel like you're not making enough? Find another company that will pay you more. No one will pay you more? Keep adding skills until they do."
Everything else is just window dressing for the negotiating table.
> I'll pay top dollar to get hard-to-find skills
I feel like that's more true at a small-scale company than a large company with thousands of employees. Maybe the large company has already found those "hard-to-find skills".
I feel like that's more true at a small-scale company than a large company with thousands of employees. Maybe the large company has already found those "hard-to-find skills".
Small-scale companies are probably more likely to have shapes for hard-to-find people. If you can hire one person to do three jobs you need 1/3rd of a person for, that's more valuable than finding three people who can do that; especially if those three people would have needed to be in close communications with each other.
Big companies tend not to have as many places where they need one person to wear many hats; so their hard-to-finds will tend to be finding deep experts, but there's probably not a lot of positions that really need that.
Big companies tend not to have as many places where they need one person to wear many hats; so their hard-to-finds will tend to be finding deep experts, but there's probably not a lot of positions that really need that.
So what? Don't work for a large company if they're not willing to pay your salary.
IMO, assuming everyone is WFH, Location based pay should only be considered within a same timezone and in same country.
Even if market rate price for developers in India was same as SF, to maintain its "output/$ per employee", the salary may differ.
For instance, a company whose main operations are happening in PST, engineers whose main hours are offset 13h30min are less valuable to the company than those with 0h0min offset.
Sending a PR for review or reviewing a PR from someone with more than 8h time zone difference usually means you have to wait a full day of turnaround time.
Now within a same time zone but different country (or even states in the US), the differences diminish but there are still local labor laws and taxes that affect what the ratio of "what the employee provides" vs "what it costs the employer"
So at the moment, people living in SF and [some remote town in the middle of california with fiber internet] should be paid the same, but, people in TX should not. (This only applies to 100% WFH companies whose majority of workforce is all in California)
Even if market rate price for developers in India was same as SF, to maintain its "output/$ per employee", the salary may differ.
For instance, a company whose main operations are happening in PST, engineers whose main hours are offset 13h30min are less valuable to the company than those with 0h0min offset.
Sending a PR for review or reviewing a PR from someone with more than 8h time zone difference usually means you have to wait a full day of turnaround time.
Now within a same time zone but different country (or even states in the US), the differences diminish but there are still local labor laws and taxes that affect what the ratio of "what the employee provides" vs "what it costs the employer"
So at the moment, people living in SF and [some remote town in the middle of california with fiber internet] should be paid the same, but, people in TX should not. (This only applies to 100% WFH companies whose majority of workforce is all in California)
What about the people in PST who work outside of normal office hours? Should they be penalized because they are effectively working in a different time zone? Should those in different time zones that decide to work PST regular office hours be paid more?
I'm in Europe. I'd work US hours for a US salary.
The value of your labor is how much the company is able to leverage it for a return. It has next to nothing to do with where you live. It's on the company to answer this question, not you or some third party to the negotiation between you and your employer.
>If you want to pay me based on location, I'm going to charge you based on location
Charging customers variable rates based on location is the de-facto norm amongst enterprise software vendors and most professional services segments, FWIW
Charging customers variable rates based on location is the de-facto norm amongst enterprise software vendors and most professional services segments, FWIW
Charging variable rates based on location is the standard for just about everything, outside of e-commerce where prices are clearly advertised online and mass-market consumer devices like an XBox.
The mistake I see in compensation discussions is to assume that abandoning location-based pay means everyone gets paid as much as the company's most expensive location.
In practice, prices for services start to trend toward the least expensive locations once location is removed from the equation. There's a reason why the price of electronics manufacturing went down when it moved to locations like China, not up when manufacturing in China became accessible to to the expensive locations.
The mistake I see in compensation discussions is to assume that abandoning location-based pay means everyone gets paid as much as the company's most expensive location.
In practice, prices for services start to trend toward the least expensive locations once location is removed from the equation. There's a reason why the price of electronics manufacturing went down when it moved to locations like China, not up when manufacturing in China became accessible to to the expensive locations.
As I understand your point, your trying to make it from the other side, as in "I negotiated this pay level so that I can afford to pay more for my house."
It isn't an unreasonable argument. The author of the piece glosses over the level of preparation/skill and automated vs non-automated manufacturing[1] in their clothing worker argument. And of course the cost of goods for a shirt that cost $10 in labor vs one that cost $1 in labor won't retail for the same amount.
[1] Jobs that train "on the job" (erroneously called "low skilled") typically have a wider workforce to choose from and thus get more workers competing for jobs and thus and lower wages.
It isn't an unreasonable argument. The author of the piece glosses over the level of preparation/skill and automated vs non-automated manufacturing[1] in their clothing worker argument. And of course the cost of goods for a shirt that cost $10 in labor vs one that cost $1 in labor won't retail for the same amount.
[1] Jobs that train "on the job" (erroneously called "low skilled") typically have a wider workforce to choose from and thus get more workers competing for jobs and thus and lower wages.
In reality, these days, software engineers train on the job to a large extent too. If your employer uses a dozen different technologies - languages, frameworks, tracing frameworks, infrastructure providers - which isn't at all unreasonable these days - then good luck to them with finding someone who has solid experience in all 12, especially if one or two are a bit off the beaten track. So I don't think "trains on the job" is a good definition for low-skilled. Low-skilled means there is less to learn, IMO.
For me, when someone designs a system from first principles it feels like software engineering, and when someone implements business logic in a preexisting framework, it feels more like software assembly. We can both agree that there is a wide range of definitions for "software engineer."
How would this work for Facebook offices in Europe? Should employees there demand the same pay as their colleagues in the Bay area?
Note that while the other offices don’t pay the same, my understanding is that Zurich pays similarly to SF / NYC / Seattle.
Yeah, but housing is also more pricey there.
It seems we are in a vicious cycle of high salaries -> higher housing costs -> even higher salaries -> even higher housing costs.
To prevent the same problems elsewhere, it might seem useful to not increase salaries too much. But the real problem is that housing cost depends too much on what the buyer can pay.
It seems we are in a vicious cycle of high salaries -> higher housing costs -> even higher salaries -> even higher housing costs.
To prevent the same problems elsewhere, it might seem useful to not increase salaries too much. But the real problem is that housing cost depends too much on what the buyer can pay.
Can you recommend a specific book?
In a world where no companies scale pay based on employee location:
- It's rare that employees in expensive areas do not get to work remotely - because there would almost always be someone of similar skill in a cheaper location to hire
- It's rare that a company that has in-office workers in an expensive area would hire someone working remotely - because they are certainly paying the local workers more than what would be considered normal for a remote worker... because those local people need to earn more to have the same quality of life. And if they hired the remote worker for that "normal remote rate", they would need to cut the pay of their local workers (otherwise they _are_ scaling pay based on location).
_(Note that certain "this is one of only a few people in the world that meet our criteria" situations would not follow the above)_
So it seems like either
- This world does not have in-office worker in expensive areas, or
- All areas have the same cost of living, or
- There is a hard split between companies that hire remote workers and those that do not.
- It's rare that employees in expensive areas do not get to work remotely - because there would almost always be someone of similar skill in a cheaper location to hire
- It's rare that a company that has in-office workers in an expensive area would hire someone working remotely - because they are certainly paying the local workers more than what would be considered normal for a remote worker... because those local people need to earn more to have the same quality of life. And if they hired the remote worker for that "normal remote rate", they would need to cut the pay of their local workers (otherwise they _are_ scaling pay based on location).
_(Note that certain "this is one of only a few people in the world that meet our criteria" situations would not follow the above)_
So it seems like either
- This world does not have in-office worker in expensive areas, or
- All areas have the same cost of living, or
- There is a hard split between companies that hire remote workers and those that do not.
There is a delicate balance to be handled here
Firstly, yeah negotiate based on (potential) value delivered. It's the best way for any freelancer to base their pay. But for an employee things get trickier. You see a freelancer is part of the gig economy - if at the upper end but still it's a gig - you negotiate per gig and move on from the bad ones.
But we hate the gig economy with a passion at the bottom end - it's exploitation - and a hundred years ago workers unionised (or sometimes less usefully revolted) in order to stop it.
And asking an employee to negotiate for their own salary at odds with their co-workers is how collective action gets strangled in the crib.
And let's face it, collective action in the US looks like it was strangled in the crib anyway.
So looking at the next ten years we have a real issue over how to pre/re/distribute the wealth the century will hopefully bestow. And solid collective action will be a significant and important part of that.
Grabbing the most value for yourself and to hell with the rest is not going to be the path to utopia.
So, to start with, put unions on the boards of major companies, have them elected by the employee / members - and start seeing questions like "why can't we vote for the other folks on the board"
Firstly, yeah negotiate based on (potential) value delivered. It's the best way for any freelancer to base their pay. But for an employee things get trickier. You see a freelancer is part of the gig economy - if at the upper end but still it's a gig - you negotiate per gig and move on from the bad ones.
But we hate the gig economy with a passion at the bottom end - it's exploitation - and a hundred years ago workers unionised (or sometimes less usefully revolted) in order to stop it.
And asking an employee to negotiate for their own salary at odds with their co-workers is how collective action gets strangled in the crib.
And let's face it, collective action in the US looks like it was strangled in the crib anyway.
So looking at the next ten years we have a real issue over how to pre/re/distribute the wealth the century will hopefully bestow. And solid collective action will be a significant and important part of that.
Grabbing the most value for yourself and to hell with the rest is not going to be the path to utopia.
So, to start with, put unions on the boards of major companies, have them elected by the employee / members - and start seeing questions like "why can't we vote for the other folks on the board"
> Grabbing the most value for yourself and to hell with the rest is not going to be the path to utopia.
That argument is not going to convince anyone who is able to twist a prospective employer's arm into paying them top dollar. Never mind utopia. I got mine!
That argument is not going to convince anyone who is able to twist a prospective employer's arm into paying them top dollar. Never mind utopia. I got mine!
Yes. Which is why it's a fine approach in the free market fir someone actively choosing to be a freelancer not an employee.
But employment (or rather the thing that the vast majority of people get paid via, which is normal employment right now) is protected because the vast majority of people get paid cia it. we want most people to have a reliable income stream for social reasons.
Setting employee vs employee is not a good path for that.
But employment (or rather the thing that the vast majority of people get paid via, which is normal employment right now) is protected because the vast majority of people get paid cia it. we want most people to have a reliable income stream for social reasons.
Setting employee vs employee is not a good path for that.
I came looking for a comment on negotiation, and frankly, it was a disappointing comment.
Yes, everyone should learn about negotiation. And as the authors of Negotiation Genius point out, you're making the mistake most people make - only considering your BATNA and not considering the other party's BATNA.
Ask yourself what alternative Facebook has if you insist on a Bay Area salary while living in the Midwest. The answer will be "More than they had pre-COVID." This reduces your bargaining power. Allowing remote work has significantly increased their pool of applicants. For every one of you, there are probably over 10 people as good as you who are happy taking a 20-30% salary increase while still getting paid 30% less than SV folks.
While your advice is sound, you are only providing one half of the dynamic. One of the lessons in almost all negotiation books is to spend time understanding the position of the other side.
Yes, everyone should learn about negotiation. And as the authors of Negotiation Genius point out, you're making the mistake most people make - only considering your BATNA and not considering the other party's BATNA.
Ask yourself what alternative Facebook has if you insist on a Bay Area salary while living in the Midwest. The answer will be "More than they had pre-COVID." This reduces your bargaining power. Allowing remote work has significantly increased their pool of applicants. For every one of you, there are probably over 10 people as good as you who are happy taking a 20-30% salary increase while still getting paid 30% less than SV folks.
While your advice is sound, you are only providing one half of the dynamic. One of the lessons in almost all negotiation books is to spend time understanding the position of the other side.
Based on price alone facebook would seek out lower paid workers and exclude SV employees. Is that the final outcome?
> Based on price alone facebook
Few good companies do things "based on price alone" That reasoning will not get you far.
Having said that, I did interview with an SV startup where probably over 50% of the employees were not in SV, so it may become the general trend.
Few good companies do things "based on price alone" That reasoning will not get you far.
Having said that, I did interview with an SV startup where probably over 50% of the employees were not in SV, so it may become the general trend.
Yeah as someone who has always lived in a low cost city, but getting 2-3x less salary than SF same level counterparts, should my salary also now increase to SF levels? But honestly, I should've been receiving that from the beginning then.
Exactly. And now expand this to the entire world. This is now the pool of applicants.
Only sort of.
If you need someone in the same time zone who speaks English at a level that enables them to contribute work of the same quality and volume as a native speaker, you've really only added Canada.
If you discount the language requirement, you can add Central and South America.
Only if you discount both the language requirement and the time zone requirement can you add the rest of the world.
If you need someone in the same time zone who speaks English at a level that enables them to contribute work of the same quality and volume as a native speaker, you've really only added Canada.
If you discount the language requirement, you can add Central and South America.
Only if you discount both the language requirement and the time zone requirement can you add the rest of the world.
I've worked in a global tech company, with development offices all over the world. It's very workable. Plenty of people all over who speak English well enough (once you get over the accents[1]).
Time zone issues are a bit of a pain, but manageable. As long as you don't have to meet with them daily, you (or they) simply schedule the once-every-week-or-two-weeks meeting at a time that can work (a little earlier in the morning or later in the evening). It was quite customary to leave early or start late on some days to make up for having a 1-2 hour meeting in the evening or early morning. This is well understood.
To be clear: Those developers were "first class" employees - treated similarly to the ones in the US.
[1] Indeed, although their accents may have been difficult to follow, the reality is they understand a wider variety of accents than do most Americans, and so Americans complaining about their accent would be viewed as petulant.
Time zone issues are a bit of a pain, but manageable. As long as you don't have to meet with them daily, you (or they) simply schedule the once-every-week-or-two-weeks meeting at a time that can work (a little earlier in the morning or later in the evening). It was quite customary to leave early or start late on some days to make up for having a 1-2 hour meeting in the evening or early morning. This is well understood.
To be clear: Those developers were "first class" employees - treated similarly to the ones in the US.
[1] Indeed, although their accents may have been difficult to follow, the reality is they understand a wider variety of accents than do most Americans, and so Americans complaining about their accent would be viewed as petulant.
One of the hardest problems in programming is naming--variables, function names, abstractions, etc. A larger vocabulary (in English, the lingua franca of programming,) will enable someone to write better names.
For jobs that can be done remotely, location based pay is the new “college degree required”.
It is a perfect strategy to save time reviewing resume’s today, and eliminate the need to in the future.
It is a perfect strategy to save time reviewing resume’s today, and eliminate the need to in the future.
So you read a book on negotiation and it didn’t cover leverage?
Sometimes I catch myself pondering if location-based pay makes any sense, and every single time I end whatever train of thought I'm having with "but they're not gonna pay me more if I decide to move to LA".
why do you think that in your theoretical world? higher pay actually happens in practice.
In all of my career I was never respected enough to get an SSD installed in my work machine after insisting that not having one hurt my productivity immensely. A pay increase after a personal decision to move to a bigger city sounds almost like parody to me.
Any negotiation book suggestions
Can you recommend a good book on negotiation please? You make a very good point.
Do you have any solid recommendations for a book on negotiating?
^^^ Yeah, this. "Location based pay" just means "I'm giving you a paycut," which in turn just means "I don't think you have any leverage." Pure and simple.
So go find what the negotiation wonks call your BATNA and then see if it's better than the paycut. If it is, now we're cooking.
So go find what the negotiation wonks call your BATNA and then see if it's better than the paycut. If it is, now we're cooking.
As someone who gave up 15% of his salary when moving from Germany to Sweden, let me give you a different perspective on location-based pay.
1. How much do you value commuting by bike 15 minutes, instead of taking the tube for one hour? 2. How much do you value walking 15 minutes to the nearest forest, instead of being surrounded by highways, buildings and artificial parks? 3. How much do you value having a proper lunch break, instead of taking a sandwich in front of the computer? 4. How much do you value your male CEO regularly staying home with sick kids, instead of women getting that task by default? 5. How much do you value not having to see beggars and homeless people everywhere you look? 6. How much do you value living in a 9-5 culture, instead of a "constant death march" one? 7. How much do you value pedestrians being given priority, instead of a honk? 8. How much do you value breathing in fresh air, instead of getting smog alerts every week?
I could go on and on.
Once you put a value on all of the above, location-based pay actually makes sense. Maybe not based on your exact zip code, but when moving from a large city to a smaller city, or from one country to another, you get certain things "for free" that you might value more than total compensation.
1. How much do you value commuting by bike 15 minutes, instead of taking the tube for one hour? 2. How much do you value walking 15 minutes to the nearest forest, instead of being surrounded by highways, buildings and artificial parks? 3. How much do you value having a proper lunch break, instead of taking a sandwich in front of the computer? 4. How much do you value your male CEO regularly staying home with sick kids, instead of women getting that task by default? 5. How much do you value not having to see beggars and homeless people everywhere you look? 6. How much do you value living in a 9-5 culture, instead of a "constant death march" one? 7. How much do you value pedestrians being given priority, instead of a honk? 8. How much do you value breathing in fresh air, instead of getting smog alerts every week?
I could go on and on.
Once you put a value on all of the above, location-based pay actually makes sense. Maybe not based on your exact zip code, but when moving from a large city to a smaller city, or from one country to another, you get certain things "for free" that you might value more than total compensation.
You gave up 15% of your salary to work in a company where, presumably, everyone earns 15% less than your previous salary. Would you accept earning swedish wages working remote from sweden in a german company?
Well, if I work as hard as a small-town Swede, with the quality of life of a small town Swede, then it makes sense to me to work at Swedish rate for a German company.
I bet he would, because he's saying "this is the quality of life I want and this is the price I am willing to pay to get it."
In your book "I want to live in Sweeden. I am happy to give up 15% less. But I won't do it to somehow spite my company for paying more to its German employees."
He's be an idiot to think like that.
In your book "I want to live in Sweeden. I am happy to give up 15% less. But I won't do it to somehow spite my company for paying more to its German employees."
He's be an idiot to think like that.
I feel like you should be able to get all of those in Germany too? At least it doesn’t sound at all representative.
More likely you switched from a bad company to a good one.
More likely you switched from a bad company to a good one.
Unfortunately, I don't have sufficient data to compare, but I believe that big cities come with a "work hard, play hard" attitude that is not for everyone.
I think this is a false dichotomy. In reality if your employer can afford to pay you this salary while you live in Germany, they should be able to pay you the same salary in Sweden (before taxes). So in reality without location based pay you can have all that without taking a paycut.
Another way to look at it, if these social changes were to happen in Germany, would you expect salaries to go down as a result?
Another way to look at it, if these social changes were to happen in Germany, would you expect salaries to go down as a result?
If Germany started handing out 480 days of parental leave per child and virtually unlimited "stay at home with sick child", plus a culture where everyone contributes equally to parenting, then I would definitely expect the overall German (net) salary to go down.
Location-based pay also has a disparate impact on Black and Latino people, who are statistically much more likely to have family in the south and Midwest, which have low cost of living. There’s something very troubling about two workers at a Bay Area company moving back home while working remotely, and a white or Asian worker getting paid more because family is in the Bay Area suburbs while a Black or Latino worker gets paid less because family is in the much cheaper Atlanta or Houston suburbs.
Spot on comment. Can you recommend any good books on the subject?
Your salary is based on supply and demand.
What is the supply of workers? All things being equal the company will pay the least amount possible.
What is the demand for those workers? All things being equal the worker will work for the company that pays the most.
When you move from San Francisco to Des Moines, Iowa you shift markets. If you move from San Francisco to “the metaverse” you shift markets.
Facebook may have moved from a small handful of people able to do a job to a whole world of people. You may have moved from a small handful of opportunities to a world of opportunities.
It’s difficult to predict how prices will change, but they almost definitely will, and it’s not a matter of “holding out” or “negotiating” in the long run.
What is the supply of workers? All things being equal the company will pay the least amount possible.
What is the demand for those workers? All things being equal the worker will work for the company that pays the most.
When you move from San Francisco to Des Moines, Iowa you shift markets. If you move from San Francisco to “the metaverse” you shift markets.
Facebook may have moved from a small handful of people able to do a job to a whole world of people. You may have moved from a small handful of opportunities to a world of opportunities.
It’s difficult to predict how prices will change, but they almost definitely will, and it’s not a matter of “holding out” or “negotiating” in the long run.
Based. Recruiters are in the business of lowballing you as much as possible. If you produce value and there is a market for your skills, then they are bidding against other people.
https://www.kalzumeus.com/2012/01/23/salary-negotiation/
https://www.kalzumeus.com/2012/01/23/salary-negotiation/
Can you recommend a book on negotiating?
[deleted]
Can you suggest a book on negotiation? I know I'm terrible at it and could really use such a book.
What about different countries? Where do you the draw the line? At some point it's just an economic reality we've lived with for centuries.
I'm not really saying it's right, just that if a company is set up to be able to handle you working at great distance and cross timezone, then probably the outcome is that they can get it cheaper than you are.
And it's nothing new, it's just that we call it 'outsourcing' when they're Indian, and 'remote working' or 'digital nomadism' otherwise.
I'm no 'SJW', far from it; in my book the modern free market capitalist employer embraces remote work, but certainly doesn't pay SFBA rates through the nose for it.
(To go with such remote friendly trends though, CoV has also brought anti-globalism trends, so who knows, really! I'm quite looking forward to reading about what's happening, in ten or twenty years' time.)
I'm not really saying it's right, just that if a company is set up to be able to handle you working at great distance and cross timezone, then probably the outcome is that they can get it cheaper than you are.
And it's nothing new, it's just that we call it 'outsourcing' when they're Indian, and 'remote working' or 'digital nomadism' otherwise.
I'm no 'SJW', far from it; in my book the modern free market capitalist employer embraces remote work, but certainly doesn't pay SFBA rates through the nose for it.
(To go with such remote friendly trends though, CoV has also brought anti-globalism trends, so who knows, really! I'm quite looking forward to reading about what's happening, in ten or twenty years' time.)
[deleted]
From my perspective as an employer the pay is primarily a function of scarcity. Location-based pay would make perfect sense for roles where supply is abundant and location is irrelevant. Example: simple data entry jobs of the kind you can outsource to Upwork. When looking for senior software engineers the supply is very limited relative to demand, and as a startup [0] we don't have the luxury to discriminate based on location other than timezone (though we're somewhat flexible there, too). Hence, we'll pay the right candidate the right salary, regardless of whether they're physically located in the Bay Area or in rural Vietnam. Because if we don't, someone else will.
[0] Yes, we're hiring - https://spacelift.io/careers.html
[0] Yes, we're hiring - https://spacelift.io/careers.html
"Should remote workers have their pay reduced if they move somewhere cheap?"
Who is anyone to say one way or another? It's a negotiation between 2 parties. Employee will try to argue that value they bring is indifferent of where they are based and employer will try to argue that employees are a) less valuable when remote and/or b) more replaceable by other similar workers in those/similar locations.
Either part will try to call each other bluff.
Both will learn that it's ultimately expensive to take an absolute approach and likely to negotiate a middle ground.
I don't buy that remote-only companies benefit by being able to quickly arbitrage by hiring only from cheapest places because you can only remain truly remote when vast majority of your workers are all in various locations, not pooled together in certain locations.
Who is anyone to say one way or another? It's a negotiation between 2 parties. Employee will try to argue that value they bring is indifferent of where they are based and employer will try to argue that employees are a) less valuable when remote and/or b) more replaceable by other similar workers in those/similar locations.
Either part will try to call each other bluff.
Both will learn that it's ultimately expensive to take an absolute approach and likely to negotiate a middle ground.
I don't buy that remote-only companies benefit by being able to quickly arbitrage by hiring only from cheapest places because you can only remain truly remote when vast majority of your workers are all in various locations, not pooled together in certain locations.
Soon the employer side of the debate is going to be "move somewhere cheaper or you're fired".
>The label in my shirt says Made in China. Likewise for my jacket, and my jeans were made in Bangladesh. “Equal pay for equal work” is a nice idea, but I don’t think we apply it universally.
Well, seen from one aspect we should. Clothes, gadgets, etc, should become more expensive, and those workers more well paid (let's ignore atm whether they'll still be given those jobs - perhaps jobs would move closer to the buyers in that case, though I doubt it).
This will discourage planet/society killing conspicuous or mechanical consumption of BS, and things like "fast fashion".
https://www.monbiot.com/2012/12/10/the-gift-of-death/
Well, seen from one aspect we should. Clothes, gadgets, etc, should become more expensive, and those workers more well paid (let's ignore atm whether they'll still be given those jobs - perhaps jobs would move closer to the buyers in that case, though I doubt it).
This will discourage planet/society killing conspicuous or mechanical consumption of BS, and things like "fast fashion".
https://www.monbiot.com/2012/12/10/the-gift-of-death/
I don't think the analogies made in this article stand for the markets nor the skills we are considering.
You may think I'm full of shit, and its within your right, but I the amount of time and resources you'll spend to find a good match for a factory worker at some assembly line, compared to that for a skilled software engineer with that's being paid 150k$, is not even remotely comparable.
And the value each bring to your company are not the same either. Perhaps you can make the argument that in both cases there are "plenty of fish in the sea", but I'd wager there's a lot less fish in the developer side of things.
I don't know, but it just smells like false analogies and I'm too tired to write about it ...
You may think I'm full of shit, and its within your right, but I the amount of time and resources you'll spend to find a good match for a factory worker at some assembly line, compared to that for a skilled software engineer with that's being paid 150k$, is not even remotely comparable.
And the value each bring to your company are not the same either. Perhaps you can make the argument that in both cases there are "plenty of fish in the sea", but I'd wager there's a lot less fish in the developer side of things.
I don't know, but it just smells like false analogies and I'm too tired to write about it ...
What if you drive around the country in an RV and call SF home for one month out of the year? If you've got an address there and spend more time in California than any of the other states you visit, seems like you'd be a Californian resident.
One of my coworkers did this.
One of my coworkers did this.
You will need to pass California residency test (probably being in California for more than 6 months).
Given the company is employing you, they should know where you reside.
If you're working through another company you could give an address to your actual employer without being resident.
If you're working through another company you could give an address to your actual employer without being resident.
California’s tax authorities are much quicker than that to decide you are a resident and tax you accordingly.
> But there’s another point I haven’t seen get as much attention: what right do any of us in the rich world have to complain about “location-based pay”?
> The label in my shirt says Made in China. Likewise for my jacket, and my jeans were made in Bangladesh. “Equal pay for equal work” is a nice idea, but I don’t think we apply it universally.
I actually heard that "record scratch" noise in my head. This is a totally different thing. Apples to oranges.
If an European or American textile worker moved to China but was doing the same work for the same company and the company tried to lower their salary that's the same problem.
If a company fires an European or American textile worker and outsources their job to China, that's not the same problem.
> The label in my shirt says Made in China. Likewise for my jacket, and my jeans were made in Bangladesh. “Equal pay for equal work” is a nice idea, but I don’t think we apply it universally.
I actually heard that "record scratch" noise in my head. This is a totally different thing. Apples to oranges.
If an European or American textile worker moved to China but was doing the same work for the same company and the company tried to lower their salary that's the same problem.
If a company fires an European or American textile worker and outsources their job to China, that's not the same problem.
Again with the corporate shills.
> Companies reduce your pay because they can.
And employees increase their pay because they can. There will always be at least a few companies that don't partake in this location-based BS, and the rest of the companies will have to compete with them somehow.
> Companies reduce your pay because they can.
And employees increase their pay because they can. There will always be at least a few companies that don't partake in this location-based BS, and the rest of the companies will have to compete with them somehow.
I’m not entirely clear on the purpose of this post.
It begins with “maybe I’ll regret this if I move to London”, and then the rest of the post is about how it’s fine that enormous pay cuts are cool because they aren’t happening to the author.
I’m somewhat perplexed that an openly equivocating casual musing that openly features the author’s complete disconnection from the topic made its way to the front page of HN. It doesn’t really appear to have any substantive material to justify its position aside from uh, jeans?
It kind of reads like boilerplate ad copy but instead of selling you “Buy this iPod” it’s “It’s actually cool if your employer decides to keep $60k of your current salary for themselves because of your zip code “
It begins with “maybe I’ll regret this if I move to London”, and then the rest of the post is about how it’s fine that enormous pay cuts are cool because they aren’t happening to the author.
I’m somewhat perplexed that an openly equivocating casual musing that openly features the author’s complete disconnection from the topic made its way to the front page of HN. It doesn’t really appear to have any substantive material to justify its position aside from uh, jeans?
It kind of reads like boilerplate ad copy but instead of selling you “Buy this iPod” it’s “It’s actually cool if your employer decides to keep $60k of your current salary for themselves because of your zip code “
[deleted]
I think it's a fallacy to compare different countries in this way. If you take the "What right do you have to complain" route it would just be a race to the bottom, and guess who wins? The companies who get to pay everyone less. You can advocate for making your local community better while still advocating that other parts of the world who have it worse off as well.
However I think missing in this argument is an admission that SV wages are ridiculously inflated thanks to the playground of economics software tends to play in, which is what is causing this issue to crop up in the first place.
However I think missing in this argument is an admission that SV wages are ridiculously inflated thanks to the playground of economics software tends to play in, which is what is causing this issue to crop up in the first place.
The analogy at the end is not accurate. I as the consumer don’t pay less for a shirt made in Bangladesh - I buy the highest quality shirt that is offered at the lowest price, and don’t factor on the cost of living (or mote accurately cost of labor) of where the shirt was manufactured.
Regarding the widespread practice of locale-adjusted pay (it generally is not cost of living adjusted e.g. London is paid far less than SF despite a similar cost of living), it is a clear example of why the argument of “women can’t be paid less because companies would hire more women if they were cheaper” is simply false.
Regarding the widespread practice of locale-adjusted pay (it generally is not cost of living adjusted e.g. London is paid far less than SF despite a similar cost of living), it is a clear example of why the argument of “women can’t be paid less because companies would hire more women if they were cheaper” is simply false.
Location based pay is generally set based on _cost of labor_, not cost of living.
And cost of labor is generally at least the cost of living.
Sure, but they vary by a lot. For example, engineering salaries in Canadian cities are roughly 60% of US cities with comparable cost of living. I see people talking about “cost of living” being an unfair criteria to set salaries and I agree! But that’s a strawman: almost no employer uses that to set salaries, they use a much more sensible number: the estimated cost to hire a replacement in the same area.
That's exactly the point - it's not good for people when the market rate goes too close to or below cost of living. 60% of cities having the same pay are irrelevant when there's the rest of the world, which is generally poorer.
Location based pay? "We looked at your '''Peer Group''' and the '''best''' we can offer you is Z" - Yeah, well you can blow it out your ass. There are N (which you know is a lot) other companies willing to hire me, and I currently make X amount (which I will not tell you). If you don't offer me Y, I will not move (which I will also not tell you how much it is).
I don't need money, but I'm not going to work for anything less than what I can pull, and I pull a lot already.
t. remote worker
I don't need money, but I'm not going to work for anything less than what I can pull, and I pull a lot already.
t. remote worker
I wonder to which degree do the companies still consider remote work subpar and count the expected loss in output into the total remuneration.
It isn't a given that people will work less at home, lone introverted developers may actually increase their output, or people who were freed from constant interruptions at their workplace. But people with family, especially with young kids, may really be way less efficient when working remotely.
It isn't a given that people will work less at home, lone introverted developers may actually increase their output, or people who were freed from constant interruptions at their workplace. But people with family, especially with young kids, may really be way less efficient when working remotely.
[deleted]
A simple thought experiment. A company in India decides to open an office in NYC. They say, it wouldn’t be fair to have different pay for different people doing the same work so let’s pay people in NYC a Bangalore wage. You’d laugh at them. That’s not how markets work. But for some reason we expect them to work differently in the opposite direction?
It's ridiculous to me that a company can say, "Hey, where you live requires less pay for a baseline standard of living, therefore we'll pay you less" but they would never, ever consider saying, "Oh, you live in a town with fewer opportunities and less pay? Well, we'll charge you less for our product then."
While it isn't due to less economic opportunities necessarily, price discrimination is absolutely a thing:
https://en.wikipedia.org/wiki/Price_discrimination
https://en.wikipedia.org/wiki/Price_discrimination
Oh, I totally agree that companies do it. Where they choose to differentiate in price or pay is based on their whims, so it's not a question of fairness, IMO.
Pay should be pegged to your skills and any demands the job is placing on you. The only time changing pay based on location makes sense is if where you work is a requirement of the job.
Paying people more because they work at an office in a high rent area makes sense.
Varying what remote workers get paid based on where they choose to live makes zero sense.
Paying people more because they work at an office in a high rent area makes sense.
Varying what remote workers get paid based on where they choose to live makes zero sense.
Author lost me at “you get paid what it takes to make you do the job”
In a distributed future (for tech at least), information re: my value to the company will also be increasingly available.
This availability of information + liquidity of talent will create a more perfect market where “what it takes for me to do the job” = how much value that job creates.
In a distributed future (for tech at least), information re: my value to the company will also be increasingly available.
This availability of information + liquidity of talent will create a more perfect market where “what it takes for me to do the job” = how much value that job creates.
".., and I have to wonder if “location-based pay” works in both directions. I live in suburban London, ten-ish Tube stops from the belly of the beast. If I worked remotely for Facebook and wanted to move somewhere central where rents are three times higher, would Zuck give me a raise? Somehow I doubt it."
This is just another example of the imbalance of the hiring process
Who a.i to complain: I'm the person. Interviewing your company
Who a.i to complain: I'm the person. Interviewing your company
I think we will see a shift where some companies continue paying current salaries, and others will do location-based. The companies who keep paying current salaries will see people with skill move to them.
If you're a great employee, you will still have people competing for you and I don't think this should concern you.
If you're a great employee, you will still have people competing for you and I don't think this should concern you.
> Should remote workers have their pay reduced if they move somewhere cheap?
That makes the most economic sense for the company, as they can judge employees based on their local office, not the other global employees at that salary level. Also it's good to not have people in the same office doing ostensibly the same job with wildly differing salaries.
> Some call this unfair, and they’re probably right.
Agreed. But fairness rarely factors into business decisions.
> Why? My value to the company hasn’t changed! I am still worth the same amount as I was before! The only thing that changed is where I choose to reside. What difference is that to the company?
By moving to a low-COL area, you have proven to the company that you can't handle the high-stress high-stakes world of a financial center. The company usually has a bad idea of your worth. What do you think happens when you send them an indicator like this?
> If I worked remotely for Facebook and wanted to move somewhere central where rents are three times higher, would Zuck give me a raise? Somehow I doubt it.
No, but you can go next door and interview at Google the next day, and get bumped up to the standard big-city salary. So it's a pointless argument.
> Companies reduce your pay because they can.
Not only that, they have to to compete with all of the other companies that do it. They made a risk/reward assessment and decided that the ill-will toward their employees and potential resignations is worth the salary savings.
The rest of the article dives into comparisons with extremely impoverished areas, which I don't think are relevant for a discussion about remote work.
That makes the most economic sense for the company, as they can judge employees based on their local office, not the other global employees at that salary level. Also it's good to not have people in the same office doing ostensibly the same job with wildly differing salaries.
> Some call this unfair, and they’re probably right.
Agreed. But fairness rarely factors into business decisions.
> Why? My value to the company hasn’t changed! I am still worth the same amount as I was before! The only thing that changed is where I choose to reside. What difference is that to the company?
By moving to a low-COL area, you have proven to the company that you can't handle the high-stress high-stakes world of a financial center. The company usually has a bad idea of your worth. What do you think happens when you send them an indicator like this?
> If I worked remotely for Facebook and wanted to move somewhere central where rents are three times higher, would Zuck give me a raise? Somehow I doubt it.
No, but you can go next door and interview at Google the next day, and get bumped up to the standard big-city salary. So it's a pointless argument.
> Companies reduce your pay because they can.
Not only that, they have to to compete with all of the other companies that do it. They made a risk/reward assessment and decided that the ill-will toward their employees and potential resignations is worth the salary savings.
The rest of the article dives into comparisons with extremely impoverished areas, which I don't think are relevant for a discussion about remote work.
There’s absolutely no reason they need to know your location before making an offer. “Where am I? Pacific time zone in US tax jurisdiction.”
I hope location becomes something people talk about in negotiations like salary expectations and previous compensation. “Don’t tell them where you live until you get an offer.” “Get them to name a number before you say where you are.” “Recruiters who force you to tell them up front are a huge red flag.”
There’s a big list of questions you aren’t allowed to ask a candidate because while yes they do indicate that a candidate has a weaker negotiating position and therefore paying them less is “fair” in a market sense, we have collectively decided that exploiting that market disparity is unfair. So you aren’t allowed to ask it anymore. In other words, the market doesn’t define a “fair” wage. Fairness comes from elsewhere.
Hopefully “what city are you in” becomes an off-limits question ASAP. You live in a historically disadvantaged location? Great we’ll pay you less. I wonder what kind of disparities that’s gonna cause.
I hope location becomes something people talk about in negotiations like salary expectations and previous compensation. “Don’t tell them where you live until you get an offer.” “Get them to name a number before you say where you are.” “Recruiters who force you to tell them up front are a huge red flag.”
There’s a big list of questions you aren’t allowed to ask a candidate because while yes they do indicate that a candidate has a weaker negotiating position and therefore paying them less is “fair” in a market sense, we have collectively decided that exploiting that market disparity is unfair. So you aren’t allowed to ask it anymore. In other words, the market doesn’t define a “fair” wage. Fairness comes from elsewhere.
Hopefully “what city are you in” becomes an off-limits question ASAP. You live in a historically disadvantaged location? Great we’ll pay you less. I wonder what kind of disparities that’s gonna cause.
Does anyone know how equity is affected by remote policies at most big tech companies? I think that perhaps it isn't? Companies take back unvested equity if you're terminated or resign, but I don't think I've seen anything in my equity agreement docs that would let them take some of it back for a cost of living adjustment (though they could probably adjust the terms of new equity grants going forward). If I'm hired in a low CoL area I bet they adjusted for, but what if I was hired in the Bay Area and then move?
Am I crazy or is there perhaps a huge loophole here, at least in the short term, that nobody is talking about? Let's look at a senior engineer (E5) at FB on levels.fyi - $380k total comp comprised of $196k base, $30k bonus, $154k equity. If your base & bonus get cut by 50% by going remote but you keep the equity, that's still $267k a year so your total comp has only been cut by 30%. And hell you could make up a significant amount of that in taxes alone. For a staff engineer or manager at E6/M1 level it's even more dramatic - $578k total comp down to $436k, which is only a 25% decrease and just a stupidly high compensation for somewhere with a low cost of living where, say, you can buy the equivalent of a $3M silicon valley home for well under $1 million.
Am I crazy or is there perhaps a huge loophole here, at least in the short term, that nobody is talking about? Let's look at a senior engineer (E5) at FB on levels.fyi - $380k total comp comprised of $196k base, $30k bonus, $154k equity. If your base & bonus get cut by 50% by going remote but you keep the equity, that's still $267k a year so your total comp has only been cut by 30%. And hell you could make up a significant amount of that in taxes alone. For a staff engineer or manager at E6/M1 level it's even more dramatic - $578k total comp down to $436k, which is only a 25% decrease and just a stupidly high compensation for somewhere with a low cost of living where, say, you can buy the equivalent of a $3M silicon valley home for well under $1 million.
Calls for location-blind "pay based on my value" share a remarkable parallel with the desire for house prices that track a house's uninflated intrinsic value: The market doesn't care what you think it should pay.
If it's all remote, how does your employer know where you're really at? I'm waiting for the story where someone's caught claiming to live in SF or NYC for the pay but really lives somewhere rural.
You are paid the minimum the company can get away with. No more, but a lot less.
If the company is not “remote first,” I think there’s a reasonable argument that your value is not location independent.
That being said, I can’t really think of a good argument for anything beyond pay based on in-office vs remote.
That being said, I can’t really think of a good argument for anything beyond pay based on in-office vs remote.
Anything having the premise “what right do laborers have to complain …” is offensive and ridiculous. (Regardless of who the laborers are or how well paid they are or what form the labor takes.)
I think it shows that employers are a cartelized oligopsony. That's why they can get away with paying different salaries based on anything but performance (in this case, location)
anecdotal evidence of mine is when i interviewed for a large US tech company for a remote role based in the UK. based on their pay bracket someone living in central london or in a rural village in northern ireland will be entitled to the same pay. how does that make any sense? this all remote work “bonanza” from big tech companies seems to be just another cost optimization trick - all thanks to supply-demand imbalance for remote roles
Location-based pay is an unfortunate necessity.
If it didn't exist, companies just wouldn't get any employees in San Francisco, nobody would be willing to work for the wage. Obviously they're not going to pay SF wages in the rest of the world. I mean a company like FaceBook could, they certainly have the means. But they wouldn't. The shareholders wouldn't let them, due diligence and all. They have to maximise their return to the shareholders.
If I would be earning what I do in Barcelona and living in SF I wouldn't be able to even pay the rent. If wages for the same jobs had to be the same everywhere, it would mean the lowest common pay would quickly become the standard. Effectively all IT jobs would be moved to India. Nobody would bother working in the US for that pittance so there'd be no point hiring for it.
So obviously cost of living factors into it. It makes sense that this goes both ways. Otherwise someone from SF moving elsewhere would be making a lot more than their local colleagues and that wouldn't be fair either.
In fact when I moved to Barcelona from Ireland (with the same company) my pay was reduced somewhat. I had to sign a new contract with the local entity against local conditions. It was a bit of a bummer but on the other hand, I did gain a lot of quality of life. Great weather. Free healthcare that's actually good. Public transport that actually works (so no more car expenses). In the end it was a good move.
If you fight against this you will only increase the race to the bottom (and to Asia). It's this very thing that keeps areas like San Francisco viable as an IT hub. If you're expecting them to honour the juicy SF pay everywhere you won't see that. Even if they do you'll be the first to get axed when budgets need cutting.
What you see in general is that pay is indexed to local standards so you get the same standard of living for the same job in each place. At least this is what my employer does. Which is fair enough in my point of view. Money is a means to live, not a goal on its own.
Would it really be fair to have people living in one place scraping pennies to get by and others living like a king while doing the same job?
If it didn't exist, companies just wouldn't get any employees in San Francisco, nobody would be willing to work for the wage. Obviously they're not going to pay SF wages in the rest of the world. I mean a company like FaceBook could, they certainly have the means. But they wouldn't. The shareholders wouldn't let them, due diligence and all. They have to maximise their return to the shareholders.
If I would be earning what I do in Barcelona and living in SF I wouldn't be able to even pay the rent. If wages for the same jobs had to be the same everywhere, it would mean the lowest common pay would quickly become the standard. Effectively all IT jobs would be moved to India. Nobody would bother working in the US for that pittance so there'd be no point hiring for it.
So obviously cost of living factors into it. It makes sense that this goes both ways. Otherwise someone from SF moving elsewhere would be making a lot more than their local colleagues and that wouldn't be fair either.
In fact when I moved to Barcelona from Ireland (with the same company) my pay was reduced somewhat. I had to sign a new contract with the local entity against local conditions. It was a bit of a bummer but on the other hand, I did gain a lot of quality of life. Great weather. Free healthcare that's actually good. Public transport that actually works (so no more car expenses). In the end it was a good move.
If you fight against this you will only increase the race to the bottom (and to Asia). It's this very thing that keeps areas like San Francisco viable as an IT hub. If you're expecting them to honour the juicy SF pay everywhere you won't see that. Even if they do you'll be the first to get axed when budgets need cutting.
What you see in general is that pay is indexed to local standards so you get the same standard of living for the same job in each place. At least this is what my employer does. Which is fair enough in my point of view. Money is a means to live, not a goal on its own.
Would it really be fair to have people living in one place scraping pennies to get by and others living like a king while doing the same job?
The inevitable result of Location Based Pay and all-remote workforce’s will look an awful lot like offshoring at many companies. Why wouldn’t it?
Basically “be careful what you wish for”. Really? I can stop capitalist globalization by merely asking inconvienent questions? Will Nike forego their profit margins by moving production close to wherever their HQ is? Somehow I doubt I have that power.
Also apply this to the price of college whose price is similarly set based on the circumstances of the applicant rather than its value.
It's SOP that relocations in neatspace comes with a cost of living adjustment, it makes sense that remote employees would follow.
The best explanation for this is to think of yourself (assuming you’re an employee) as a small business with one customer.
If some companies do location based pay, and others don’t, won’t the market naturally begin to favor those that don’t?
Why does it sometimes seem like there is a willful disregard for what actually drives companies (profit)?
As a consequence of US laws and the way the economy runs (US capitalism), companies are incentivized to seek cheap labor. They will pay the lowest price they can.
If person A and person B produce the exact same work but A will accept a lower wage, obviously the company will hire A.
If people are upset/perplexed/confused by this, I think the crux of it is: why do some people accept a lower wage? In this case it's ostensibly because some people live in lower cost of living areas.
As a consequence of US laws and the way the economy runs (US capitalism), companies are incentivized to seek cheap labor. They will pay the lowest price they can.
If person A and person B produce the exact same work but A will accept a lower wage, obviously the company will hire A.
If people are upset/perplexed/confused by this, I think the crux of it is: why do some people accept a lower wage? In this case it's ostensibly because some people live in lower cost of living areas.
I can see how something changes when an employee moves elsewhere but it is far from a simple cost of living factor.
Off the top of my head...
Possible new company costs:
- In theory a company could incur new costs based on where their employees are (e.g. you move to a different state; that changes how they compute taxes from your income, they may need to become aware of several new state laws, may need new licenses, etc.).
- The company may have made a deal with their HQ city, e.g. tax breaks in exchange for $X jobs. If they renege because everyone moved away, they may lose a lot.
- Maintaining widespread remote work is not free; not only IT setup (high availability, etc.) but a need to do so very securely. Probably at the very least new staff or contracts for this alone.
New company SAVINGS:
- Depending on how many people move, they may need MUCH less office space. This saves in rent in high-rent areas, air conditioning, coffee, cleaning or whatever else they have to count.
...Considering all of the above, the idea of a company scaling pay sounds like it should at the very least be negotiable. They clearly have some new costs but arguably also save a ton in the process! So does the employee. And it may be difficult to quantify the value of having a vastly greater talent pool, enabling the business to hire people that otherwise would not have wanted to move to SV.
Off the top of my head...
Possible new company costs:
- In theory a company could incur new costs based on where their employees are (e.g. you move to a different state; that changes how they compute taxes from your income, they may need to become aware of several new state laws, may need new licenses, etc.).
- The company may have made a deal with their HQ city, e.g. tax breaks in exchange for $X jobs. If they renege because everyone moved away, they may lose a lot.
- Maintaining widespread remote work is not free; not only IT setup (high availability, etc.) but a need to do so very securely. Probably at the very least new staff or contracts for this alone.
New company SAVINGS:
- Depending on how many people move, they may need MUCH less office space. This saves in rent in high-rent areas, air conditioning, coffee, cleaning or whatever else they have to count.
...Considering all of the above, the idea of a company scaling pay sounds like it should at the very least be negotiable. They clearly have some new costs but arguably also save a ton in the process! So does the employee. And it may be difficult to quantify the value of having a vastly greater talent pool, enabling the business to hire people that otherwise would not have wanted to move to SV.
I guess this is the digital version of a captive audience, i see it becoming more popular.
I have told clients they are entirely within their rights to work with another contractor who probably charges 1/3 of my rate from a cheap "developing" European country. It's up to them to assess if the additional costs working with me are value for money.
To this day, they are still my clients.
there was once a guy that said that wages, at the end of the day, trend toward the employee's means of subsistence. seems like companies now are doing away with the window dressing around the employer-employee relationship.
Why should I be truthful when my employer ask where I live ?
I have had this exact situation once way before the covid situation. And I did not take advantage, I should have perhaps.
Cannot even say lesson learned, covid will likely be the new normal for a long long time.
For one thing, you're probably committing tax fraud if you lie.
If you're going to lie, make you sure you fake the timezone in your git commit timestamps.
So just because capitalism exploits some people harder than you this somehow casts doubt on your right to complain?
I honestly don't see any other argument in the article, so apologies if this sounds like a strawman or a nitpick - this is definitely not intentional.
I honestly don't see any other argument in the article, so apologies if this sounds like a strawman or a nitpick - this is definitely not intentional.
My family and I were set to move to Florida from NY just before COVID made the press. I was going to take a 10% cut in salary, because cost of living would be less and the company office there was equally at a lower rate than the NY/NJ offices or other US-based locations. We are an ESOP company, so we all have an interest in the performance and bottom line of the company. At first I was taken aback, but then I realized the move would be good for my family for a lot of reasons, and my lifestyle would not suffer. We looked at a house that was a lot more of value located to my soon-to-be downtown office than anything I could find in NY/NJ.
The comparison of overseas workers making so little for the clothes and other items we wear used to illicit a knee-jerk feeling of disgust and indignation, but then I remembered an acquaintance of mine back in college who made his business by renting rack space in retail stores in NYC to hang his clothing line he designed. They were made in overseas locations where he would fly to after he started making money to do quality control for his designs. When the corporate social responsibility thing started taking off with Nike and Kathy Lee Gifford's 'sweatshops', I asked him about it. He told me if he didn't produce his clothes there, the village where he employed a few dozen people would have no economy, and his product would not be able to be produced in the US/Europe.
I didn't truly understand this until I lived in SE Asia for eight years. I spent the last year living in a remote East Javanese rice-farming village where over half of the houses had dirt floors. I quickly gained an understanding that balanced my view. My in-laws and their families make $4-$7 a day working in the rice fields depending on the task they do. A neighbor got a job sewing either Gucci, or Michael Kors purses and handbags for $20/day. She's very happy, and her entire family is benefiting from her salary that is five times what she would make, and her working conditions are more comfortable than working in the sawa (rice field in Indonesian). She would be devastated if a CSR (Corporate Social Responsibility) group and incensed Westerners had her job move elsewhere or shutdown. The company might make a concession in this area to create good PR and continue their practice in their other locations, or they might shut it down (likely). I am not an economist, but I am also aware that some local economies have been ruined when false economies are setup i.e. disproportionate and artificially hiked salaries. Anecdotally I have heard some village in Pakistan was incensed that a "victory" for labor per a Western news article destroyed their life, and they were resentful at how the CSR effort affected them.
I think the solution is to grow local businesses and entrepreneurs. This usually occurs slowly when people like my friend in Java take their skill and knowledge of the products they have been making and start a similar or other business. I think this is the only true way to help these communities. Quick fixes or PR examples of a model setup by Nike or an other big company for PR purposes is just a show and cannot be a real changer.
The comparison of overseas workers making so little for the clothes and other items we wear used to illicit a knee-jerk feeling of disgust and indignation, but then I remembered an acquaintance of mine back in college who made his business by renting rack space in retail stores in NYC to hang his clothing line he designed. They were made in overseas locations where he would fly to after he started making money to do quality control for his designs. When the corporate social responsibility thing started taking off with Nike and Kathy Lee Gifford's 'sweatshops', I asked him about it. He told me if he didn't produce his clothes there, the village where he employed a few dozen people would have no economy, and his product would not be able to be produced in the US/Europe.
I didn't truly understand this until I lived in SE Asia for eight years. I spent the last year living in a remote East Javanese rice-farming village where over half of the houses had dirt floors. I quickly gained an understanding that balanced my view. My in-laws and their families make $4-$7 a day working in the rice fields depending on the task they do. A neighbor got a job sewing either Gucci, or Michael Kors purses and handbags for $20/day. She's very happy, and her entire family is benefiting from her salary that is five times what she would make, and her working conditions are more comfortable than working in the sawa (rice field in Indonesian). She would be devastated if a CSR (Corporate Social Responsibility) group and incensed Westerners had her job move elsewhere or shutdown. The company might make a concession in this area to create good PR and continue their practice in their other locations, or they might shut it down (likely). I am not an economist, but I am also aware that some local economies have been ruined when false economies are setup i.e. disproportionate and artificially hiked salaries. Anecdotally I have heard some village in Pakistan was incensed that a "victory" for labor per a Western news article destroyed their life, and they were resentful at how the CSR effort affected them.
I think the solution is to grow local businesses and entrepreneurs. This usually occurs slowly when people like my friend in Java take their skill and knowledge of the products they have been making and start a similar or other business. I think this is the only true way to help these communities. Quick fixes or PR examples of a model setup by Nike or an other big company for PR purposes is just a show and cannot be a real changer.
> Let’s say you hire me for your company in San Francisco and pay me $150K … [blah blah blah, I provide that much value ...] But now if I decide to move to Tulsa, OK, you want to cut my pay and reduce it to 90K, because of “cost of living”.
I've turned down a job very similar to that, twice, for much less money to work remotely. I like Sushi, but my wife makes good Italian and I get to eat with my family.
But now that $150,000 job is all-remote! And even if I was at 80% "San Francisco" pay, I'd be doing incredibly well where I live, so if I started negotiating salary for that job, my '20% above ADP-reported' is going to be a whole lot more palatable to the hiring manager, and he doesn't care that the next town over's name ends in "tucky". Worst part of it is that last time I checked, I live in an area that lands around the 5th highest cost of living.
I would accept a salary adjustment due to a move, personally, with research/negotiation to ensure that my new salary truly takes into account real costs that I will experience. And if I cannot accept my employers terms, there are now a whole lot of other companies who are hiring remotely. Like, almost all the companies. So I'll find one that does.
These kinds of programs will exist for a while, I bet -- some great employers will probably attract employees by offering a program like this (along with non-discriminatory policies around ... allowing you to move from a really cheap place to a really expensive place while compensating you accordingly).
But the vast majority who go "all remote" are simply going to start hiring wherever the cheapest talent to fill the need exists. If a 30-something mom/dad in North Dakota is just as capable of joining Teams calls/performing a mid-level QA job (you know, for the cloud-based web/mobile app...), but will do it at $36,000. Well, ...
Think "Off-shoring" at closer geographies/more common cultures (ok, maybe; some of ya'll city-folk ... need sunlight or something). Companies are good at not learning from past mistakes, so expect whole technology teams at some shops to be brought into a (virtual conference) room with HR reps while they sort out the details of their transition and training of their replacements.
Your "available talent pool" is ... big. And it now includes my wife. She left the workforce when she had children. She didn't return when they went to school -- it didn't make sense. Factor in child-care/extra car/insurance/fuel/non-optimal meals, 40 hr/wk equating to 7:00A-6:00P with commute and the "extra money left over" wasn't worth losing what we felt was basically the reason we work in the first place. And forget about landing one of those coveted remote jobs when you've been out of the work-force since before the iPhone came out.
Welp, that ended last month.
So dispensing with the doom and gloom, humanity has always figured it out in the past, we will again:
In my mind, this is "the first sign of what's to come". The whole equation on hiring/employment has been undergoing a lot of change, but I think the explosion in remote work stands to be the biggest disruption of my lifetime. If companies steadfastly refuse to adjust for cost of living, and only hire where it's cheap, expect people to move from cities. And it might be as simple as "rent goes down, people move back in". While many/most jobs cannot be performed remotely (manufacturing-related in particular), by moving all that can to remote-only the impact of "a large employer leaving a city" on a city -- in theory -- is far less.
You are prevented from living in certain places if you like certain kinds of work, today. Suddenly, for a lot of jobs, that's no longer the case. Staffing is the #1 cost for companies -- for a reason, it is a company ... it's entire value -- optimizing that cost (by reducing what you are paying people to do work -- I'm not trying to spin here). Maybe an extra hire can be made for the next project? Maybe, over time, the cost savings are so much (real-estate, etc) that it might make sense to take some of these other jobs that aren't very easy to do remotely and figure out how we can do them remotely, too? Maybe everyone stays home in their pajamas and rots away, we all die and fall into the dark ages, again?
It's been ... interesting? seems wrong ... being a part of all of this. The place I work handled things superbly; we continue to work remotely and ... everyone, as far as I can tell, is actually working. I hear about employers installing weird monitoring apps and such on their employees phones/work PCs and I think: sell the stock; clearly a lot of staff with nothing to do. My deadlines/expectations didn't disappear simply because the office did. I feel like I'm working a lot less some days -- I'm working more, I'm just spending no time on the road. Prior to my current job I had been remote for over a decade; I'd forgotten how much I enjoyed the benefits.
[0] I'm assuming that my area and the vast majority of the US, like Tulsa, would have paid $90,000 for said job.
[1] If I were paid San Francisco-equivalent salary for my work where I live, which isn't terribly low cost of living to begin with. ... I'd have my own lake house up north. Certainly wouldn't get out of time-share presentations so quickly and easily.
[2] We enrolled our kids in a charter all-virtual school when it appeared our district was going to go virtual. We figured a school with employees that had been doing this for the last ten years would fare better than our district's thrown together-in-a-week plans. Very few decisions ever end up in the "100%-the-right-choice" category, but that one sure did!
Lol
I started last year living in New York City. Many of my friends have moved down to Raleigh, Charlotte, Atlanta, and Tampa over the past few years, and in spring of last year I got a job offer and moved south as well.
Insofar as living expenses - coming from New York I do not own a car so a place near good public transportation was important. I also wanted to live in a nice neighborhood that had other young professionals. This narrowed things down to two neighborhoods - one had a lot of theaters, bars, restaurants, art galleries etc. but had no decent supermarket within walking distance - the other did (and also had my bank and other convenient places). I went with the latter neighborhood.
The ballpark for a one bedroom in this neighborhood was $1400-1600, with square feet being one determining factor. Knowing that I would be stuck inside due to Covid I opted for more square feet and was looking for apartments around $1600. A very desirable two bedroom townhouse came on the market for $1700 which was $100 more than I wanted to spend, but it was so perfect I went $1200 over a year. I'm a software engineer, I can afford it.
I have a parking space in the building garage that I rarely use as I am from New York City and have yet to buy a car (I rent when needed). I have two bedrooms (one converted to a gym, as public gyms were closed for a while) and two bathrooms. I have a door on a tree lined street where twentysomethings walk by walking their dogs and such, another door goes to the apartment building. I have two parks nearby, one which is pretty nice where I jog when it is not winter. I am two blocks from my bank, a good supermarket, and several bars and restaurants. I have a washer and dryer in the unit. The place was built a decade ago and is all modern appliances. I am less than a ten minute walk from the train station. My office is actually moving next to my train station, but if it re-opens before the move my commute is less than half an hour. $1700 a month.
1000+ square feet, in-unit washer/dryer, first floor door opening to the outside, attached garage, walking distance to train, supermarket, bars, parks - it would be difficult to even find this in the New York metro area. Everything in New York City is at least double the price for something like this.
It's a nice place to hole up in and WFH during the pandemic, and not expensive. The reality is if I moved back to the NYC metro area at some point, I would be paying more for a smaller apartment with less amenities in a less desirable neighborhood that was farther from everything.
Especially talking to young (or entering middle age) married professionals who moved down - with the breadwinner earning $100-150k a year - they can afford to buy a nice sized house in a nice neighborhood, two cars, go on vacations etc. They can just live a nice comfortable life on $100k while the well-educated wife is raising two kids until they're grown more and she'll go back to work. The math would just be impossible to work out in New York, even on the salary of a programmer or PM or QA etc. who is getting paid well compared to the average Joe.
Insofar as living expenses - coming from New York I do not own a car so a place near good public transportation was important. I also wanted to live in a nice neighborhood that had other young professionals. This narrowed things down to two neighborhoods - one had a lot of theaters, bars, restaurants, art galleries etc. but had no decent supermarket within walking distance - the other did (and also had my bank and other convenient places). I went with the latter neighborhood.
The ballpark for a one bedroom in this neighborhood was $1400-1600, with square feet being one determining factor. Knowing that I would be stuck inside due to Covid I opted for more square feet and was looking for apartments around $1600. A very desirable two bedroom townhouse came on the market for $1700 which was $100 more than I wanted to spend, but it was so perfect I went $1200 over a year. I'm a software engineer, I can afford it.
I have a parking space in the building garage that I rarely use as I am from New York City and have yet to buy a car (I rent when needed). I have two bedrooms (one converted to a gym, as public gyms were closed for a while) and two bathrooms. I have a door on a tree lined street where twentysomethings walk by walking their dogs and such, another door goes to the apartment building. I have two parks nearby, one which is pretty nice where I jog when it is not winter. I am two blocks from my bank, a good supermarket, and several bars and restaurants. I have a washer and dryer in the unit. The place was built a decade ago and is all modern appliances. I am less than a ten minute walk from the train station. My office is actually moving next to my train station, but if it re-opens before the move my commute is less than half an hour. $1700 a month.
1000+ square feet, in-unit washer/dryer, first floor door opening to the outside, attached garage, walking distance to train, supermarket, bars, parks - it would be difficult to even find this in the New York metro area. Everything in New York City is at least double the price for something like this.
It's a nice place to hole up in and WFH during the pandemic, and not expensive. The reality is if I moved back to the NYC metro area at some point, I would be paying more for a smaller apartment with less amenities in a less desirable neighborhood that was farther from everything.
Especially talking to young (or entering middle age) married professionals who moved down - with the breadwinner earning $100-150k a year - they can afford to buy a nice sized house in a nice neighborhood, two cars, go on vacations etc. They can just live a nice comfortable life on $100k while the well-educated wife is raising two kids until they're grown more and she'll go back to work. The math would just be impossible to work out in New York, even on the salary of a programmer or PM or QA etc. who is getting paid well compared to the average Joe.
I’ve been getting paid a San Francisco salary for 7 years while living abroad working as a Sr DevOps Engineer (I have 25 years experience).
After the pandemic hit, my company slowly fired half the staff and replaced us with Russians & Belarussians for 1/5 the price.
Now it’s a buyer’s market and wealthy startups (including many ycombinator startups) are offering me 50-70% less than I made at my last job. Literally so little money I would have $800 leftover after child support and paying my dying mother’s mortgage.
I ask them, “do you understand that paying employees 60% less for the same work creates a toxic environment? You are already struggling with 18 month average turnover. If I take this job, I will quit in a month, without notice, if somebody offers me 5% more, since you view me as a commodity.”
It has disgusted me enough that I’ve left tech entirely and instead am about to buy an apartment building. I would rather be a rent seeking parasite than get paid less than interns and junior engineers with 2 years experience.
After the pandemic hit, my company slowly fired half the staff and replaced us with Russians & Belarussians for 1/5 the price.
Now it’s a buyer’s market and wealthy startups (including many ycombinator startups) are offering me 50-70% less than I made at my last job. Literally so little money I would have $800 leftover after child support and paying my dying mother’s mortgage.
I ask them, “do you understand that paying employees 60% less for the same work creates a toxic environment? You are already struggling with 18 month average turnover. If I take this job, I will quit in a month, without notice, if somebody offers me 5% more, since you view me as a commodity.”
It has disgusted me enough that I’ve left tech entirely and instead am about to buy an apartment building. I would rather be a rent seeking parasite than get paid less than interns and junior engineers with 2 years experience.
Two companies ago, I was tech lead for a small team of 3. I asked for a regularization of my pay check as I was getting 60% market value; 90% or I’m going to look elsewhere.
I told them they have 6 months to figure out what they want to do with me because I don’t like dropping projects just like that. They fought me the whole 6 months to keep my low pay.
In the last day of the 6 months, I went and offered my resignation and the manager smiled at me, with a lot of proud in his voice, informing me that they debated and my salary would go up to 80% market value.
It has disgusted me enough that even 200% would have made me leave.
I told them they have 6 months to figure out what they want to do with me because I don’t like dropping projects just like that. They fought me the whole 6 months to keep my low pay.
In the last day of the 6 months, I went and offered my resignation and the manager smiled at me, with a lot of proud in his voice, informing me that they debated and my salary would go up to 80% market value.
It has disgusted me enough that even 200% would have made me leave.
The company will pay you the lowest amount you are willing to accept. Location has nothing to do with salary rates. If they could find someone at lower salary, anywhere in the world, they would hire that person. They can’t, that’s why they are paying the current salary rates.
The company may use it as an excuse, but you can choose to walk. When enough top level people refuse pay cut, the company will drop the charade quick. Even if just 10% of high performance engineers decide to walk, that would cause major disruptions in the roadmap and cost millions in development costs.
Simply demand higher salary and negotiate. The company will make adjustments to fill the in demand positions. Be prepared to walk away and find the company that will pay the higher salary.
The company may use it as an excuse, but you can choose to walk. When enough top level people refuse pay cut, the company will drop the charade quick. Even if just 10% of high performance engineers decide to walk, that would cause major disruptions in the roadmap and cost millions in development costs.
Simply demand higher salary and negotiate. The company will make adjustments to fill the in demand positions. Be prepared to walk away and find the company that will pay the higher salary.
I guess this is the digital version of a captive audience, i see it becoming more popular.
> Facebook, one of many giants to be shifting permanently to a more remote-friendly culture, has announced that those who move to lower-priced locales will have their salaries reduced accordingly.
There it is. The cost savings of giving workers a haircut because they moved to a place with low cost living is the TRUE driver from WFH-forever initiative.
There it is. The cost savings of giving workers a haircut because they moved to a place with low cost living is the TRUE driver from WFH-forever initiative.
It's heartbreaking to read articles like this where the author _almost_ gets it, and then swerves off at the last second into "but there's nothing we can do, so shut up in case it gets worse."
Absolutely, it's not easy to unionize, organize, and work towards change, but we don't have to _just accept_ offensive payment practices, working conditions, and side-effects from globalism.
Absolutely, it's not easy to unionize, organize, and work towards change, but we don't have to _just accept_ offensive payment practices, working conditions, and side-effects from globalism.
So, the cheap stuff that you're getting is because someone is getting a super bad deal, by exploiting the heck out of workers. Same in China.
The garments factory owners are walking away with tonnes of money, leaving the workers high and dry.
The more _subtle_ point that the author is making, is that, "wait, if people realize that they can get awesome developers in developing nations for a lower price, I'm not going to get hired any more in my over-priced city".
Good, move to a place where your salary is worth more, and work to enrich that community. Why should SF and NY get all the benefits of economic growth?