
Ask HN: Should a remote employee’s salary be tied to their physical location? - finaliteration
This debate has come up at my place of work recently: Should the area where someone lives impact their salary if they are working as a remote employee? Should someone be paid less if they move to an area with a lower cost of living, even if they started in an area where they were making a higher salary?
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screye
At a practical level, the industry will pay you the least amount of money for
which you will accept the offer.

In SF/Seattle, if they do not add the COL multiplier, your wages are low
enough, that you might reject the offer. On the other hand, it is quite
unlikely for a person to able to find another competitive offer, even if their
salary is significantly lower than their colleague who make less.

At an ideological level, this poses a much bigger question. Are employees paid
a proportional amount to the value they bring to their organization ?

I would say no. I do not believe every talented European is 40% as capable as
the average developer in the US. I do not believe that the same software
engineer that made $10k in India, suddenly brings 10x as much value due to a 1
year masters, once they move to the US.

Everything points towards companies historically paying employees not the
salary they deserve, but the salary they will accept. As long as remote
employees continue accepting these lower salaries, they will continue to be
paid lower salaries.

It is a chicken and egg problem, in that sense.

~~~
winter_blue
> I do not believe every talented European is 40% as capable as the average
> developer in the US. I do not believe that the same software engineer that
> made $10k in India, suddenly brings 10x as much value due to a 1 year
> masters, once they move to the US.

Exactly.

The salaries in some countries (e.g. India) are so low that it befuddles me.
In smaller cities in India, software engineers actually make closer to around
$4K a year, and new grads with no experience start at around $2.5K a year.

Compare that to the new grad pay rate of $180K+ at Google. Also, a close
friend of mine at Google makes over $400K.

In some cases, the pay gap is literally 100X. E.g. in the US, it's $400K, and
in India, it's $4K.

Why?

This pay gap makes no sense.

And, you're right. As soon as the same dev from India comes over to the US
(and gets a Master's or directly comes on an H1B), their pay goes from $4K to
$200K. (Another friend of mine moved here from India, and is making over $200K
now.)

Why are salaries so far apart, even with all the tech we have today? Doing
remote work over the Internet is so easy.

Makes no sense..

~~~
deepakkarki
People starting at $4K are the ones who work for consultancies like Infosys,
Wipro, et al. There is a reason why they're paid so less. They're usually
graduates from terrible engineering colleges who have no real engineering
skills what so ever. They undergo a 6 month training period before they can
even start working.

My friends in Google India on the other hand make close to $50K/yr. My friends
in Google MTV make $200K/yr. So the difference is 4x, not 100x.

~~~
winter_blue
> My friends in Google MTV make $200K/yr.

I'm guessing he's L3? SWE L3 averages 180K in Google.

My friend at Google is SWE L5 (which averages 350k), but he's at closer to
400K because Google's stock price appreciated considerably since he joined.

> Google India on the other hand make close to $50K/yr

Regardless, $50K in India is actually quite high. Many, _many_ large US tech
companies are happy to pay peanuts. The average for a large tech company is
probably between around $10K/yr to $20k/yr USD, which in my opinion is
horrifically abysmal. (Not to mention, I know of companies that hire people in
India's neighbor Pakistan, and they are paying them around $400 USD per month,
i.e. less than $5K/yr.)

The numbers are frankly quite absurdly low.

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simmons
I think the relationship of geography to salary is going to be dictated by the
biggest factors in all pricing -- supply and demand. Cost of living
adjustments are really just a proxy for acknowledging that a prospective
remote worker in Des Moines will have fewer local opportunities (lower demand)
than a similar worker in New York, and so will be in a less favorable
negotiating position. If remote work continues to grow (thus making demand
between geos more similar), the differences between locations will begin to
diminish, of course.

I sometimes wonder if I worked for a company that was fixated on cost-of-
living-based salaries, and I decided to move up to Aspen (high CoL, but low
demand for software engineers) if I would get a commensurate increase in pay.
I'm guessing probably not. ;)

~~~
alextheparrot
Wouldn’t this mode breakdown when more than two companies want a given remote
employee? Presumably companies paying Bay Area salaries and still making
healthy profits means that they can afford to pay high salaries irrespective
for talent.

This seems to be true insofar as companies can’t collude, either implicitly or
explicitly, to suppress remote wages.

~~~
bananaface
This is something I've thought about a lot, and I haven't found a satisfactory
answer to it. My hypothesis is that those employees who can exert that
leverage probably do win, but they keep it under their hat, and so do the
companies.

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R0b0t1
No. Scaling income with CoL is just subsidizing the housing costs of people
who want to live in more desirable locations.

If someone wants to spend part of their compensation on living in a nice area,
fine. But if someone else would rather take that compensation and live in a
lower CoL area then let them.

~~~
cameronbrown
But we're not paid by CoL, rather, the job market. If I move to a very small
but expensive village, I'm not going to get paid more than being in London.
Silicon Valley is just a weird edge case where there's so much talent in one
place that it's affecting CoL.

Regardless, there's always going to be a premium on in-person talent.

~~~
WhompingWindows
I don't understand your comment...What's your point here as it relates to
remote employees? They by definition are not in the job market of "in-person"
laborers, so shouldn't we confine the conversation to remote employees' comp?

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tharne
I don't think it's a matter of "should", it's a question of what an employee
is willing to accept and what a company is willing to pay.

It's been my experience that if you don't offer higher salaries to folks
living in high cost areas, they simply won't come work for you.

My guess is that over time as remote work becomes more common, the cost of
living differentials between places (at least in the US) will start to
flatten, though it may take quite some time.

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sbrother
No, it should be (and basically is) based on the distribution of salaries
available to that employee in the market she or he has access to. This means
locally available jobs, as well as remote ones within a couple timezones/with
compatible language/culture. In the US, as the pool of remote jobs gets larger
I expect salaries to normalize to somewhere between "bay area" and "rural
midwest".

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FabHK
Not really, unless the company chooses the location, or requires people in
different locations. For example, the foreign ministry or supranational
organisations need people in every country they run
consulates/embassies/offices; airlines or export oriented businesses might
need people in different locations - they should be paid depending on the
local cost of living (and depending on that, the employer might choose to send
more or fewer people there).

But for remote work, ie work that can be done anywhere at the discretion of
the employee, why should there be any connection?

As it happens, this would create an incentive for employees to move to cheaper
locations, and thus alleviate pressure on the housing market in the most
expensive locales, and raise salaries in cheaper parts of the world.

Arbitrage tends to reduce differences/inequalities, in this specific case as
well as in general.

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lanstein
No. For us, an easy litmus test is "if one of our people had to move home to
care for a sick parent, would we want to reduce their pay by $50k?"

Obviously not, and if you don't do it in that scenario, you don't do it in any
scenario.

For reference, we're entirely distributed, no offices.

~~~
yokaze
Then ask another question, should your employee earn more than say a well
experienced neurosurgeon?

What will be the effect on the local economy and society, when a junior
programmer right out of university will earn more than critical services to
society?

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dspillett
Would the company pay more if you moved into a better place (bigger house,
nicer neighbourhood with better schools, etc.) that happens to be more
expensive to live in? I very much think not.

So no, they shouldn't adjust downwards for that family of reasons either.

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SketchySeaBeast
I see the point of taxes being raised, so that's fair, but really I'd expect
that, before taxes and other required benefits and deductions, the salary
being offered should be the same. I can't see how one could reasonably
rationalize that one worker is delivering less value to the company simply
because they live somewhere different than the other.

~~~
graerg
>I can't see how one could reasonably rationalize that one worker is
delivering less value to the company simply because they live somewhere
different than the other.

I can definitely _see_ how one could make that argument. In some cases there
is absolutely value that comes from in-person interaction. I'd argue it's far
less than the salary difference between someone in Little Rock, AR and the Bay
Area, though.

If an employer wants to make the case that there's value to in-person
interaction, I don't think that's particularly outlandish, and it forces them
to put a number on how much they value those interactions, which can then be
benchmarked and tested.

~~~
SketchySeaBeast
You're right - there could be value in a local worker - but I'm assuming we're
comparing two remote workers.

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lhorie
No offense, but your question is loaded. To see why, think about it this way:
say you work for a company in Bangladesh and want to live in San Francisco.
Should you be paid a Bangladesh salary? Not looking so appealing anymore,
right?

So let's say salary didn't get tied to physical location. What's then stopping
employers from moving headquarters to Bangladesh and then announcing everyone
gets a pay cut? What happens with taxes and the social services funded by
those taxes if suddenly everyone's incomes are dictated by how cheap a salary
baseline a company can find worldwide?

Now, we all know what you're thinking. Obviously what you want is to work for
FAANG and make FAANG salaries, but live somewhere cheap to end up with more
money in your pocket. However, you need to realize that in order for this to
work, it needs to be an exception to the rule. If the default is that everyone
gets to do it, then you can bet companies will get in on the loopholes and
screw you over big time.

So, should a remote employee's salary be tied to their physical location? Yes,
they should (and they are). But not because it's better for everyone, but
because the world isn't fair and you are proposing that you want a world where
you can take advantage of its unfairness.

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rz2k
In a well functioning labor market, employee _should_ earn more than the
minimum they would accept to do the job and employers _should_ pay less than
the employee is making the firm.

Who gets what share of that surplus value from the transaction is a
negotiation. Arguments about what's fair and other normative statements are
definitely an effective way to influence those negotiations.

If an employee does something to earn a company a lot more money, they're not
automatically entitled to that additional income, but they have a lot more
room to negotiate their compensation. The same goes for assumed changes in an
employee's reserve price.

Even from a purely self-serving perspective, it is worth considering that
offending employees or colleagues is liable to change morale and output before
they leave. Additionally, the rising acceptance of remote work doesn't just
mean that there are new considerations about living expenses, it means that
companies aren't just competing with local companies for talent. That star
employee who has just moved to a cabin in the woods could very well have more
options in 2020 than they did in 2019.

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vbtemp
I don't think anyone knows the right answer.

Try it. Maybe they'll stick around. Maybe they'll stick around and be
disgruntled. Maybe they'll leave and find another job that isn't trying to cut
their pay

Just let it happen and see what the attractor becomes for this large,
dynamical system.

~~~
lotsofpulp
The right answer is whatever price lets you sell a product at prices that
people will buy.

Company A that keeps paying SF level pay competing against Company B that
lowers its payroll costs might be at a disadvantage if it can’t price products
low enough to compete with company B.

Of course that depends how interchangeable products from company A and B are,
but obviously for things like clothing, plastic products, and electronics, US
companies could not afford to be competitive while paying US wages.

So far, software companies have been spared this international competition due
to the lack of similar quality products from elsewhere, but that doesn’t need
to be true forever.

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holografix
It already is. If it’s legal to give you a pay cut cuz you’re not coming to
the office anymore it’ll get done. If they can force it on you because you
have no choice they will. Remember business don’t exist to be fair. They exist
to make money. This is not evil.

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air7
Higher salaries are not compensations for higher CoL but rather both are a
result of more demand to live in a certain area (partially because of there
being many jobs but that's unrealated).

If a company wants to attract talent in an area with a lot of competition it
has to raise its salary offers. And rent goes up in the same way.

So no, it's fair (in some sense) to offer people different salaries based on
their location (when work was on site) but that's part of the personal
negotiations that take their other options (or lack there of) into account,
but it's not some kind of automatic compensation you can demand or expect and
with remote work its becoming more and more irrelevant.

~~~
R0b0t1
The issue is when the companies aren't trying to attract people. If the work
can be done remotely they typically want to pay less based on local CoL.

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munificent
"Should" is one of those words that means less and less the more you look at
it.

One way to define it is, "Do employees like it?"

If you accept the premise that markets are good at finding optimal prices
where "optimal" means "greatest aggregate satisfaction of all participants",
and you believe that the job market is relatively efficient, then it means you
can trust the job market to answer your "should" question for you.

(It's OK to _not_ accept these premises, of course, or to partially accept
them. Personally, I think the job market is _somewhat_ efficient. There are
lots of both buyers and sellers. There is a fair amount of information
available to all participants. However, switching costs are pretty high, which
artificially disincentivizes job hopping.)

You might assume that employees would _not_ like it because they'll get paid
less in a cheaper area. But employees in more expensive areas will get paid
correspondingly _more_. And, if your goal is to maximize total happiness
across all employees, you'll probably find that yes, it makes sense for salary
to vary based on cost of living.

Another definition is "Is it good for society?" In other words, what
incentives does this choice create, and do we like the consequences of
incentivizing that?

Salaries that do not take cost of living into account are essentially pay
raises for living some place cheaper and pay cuts for living some place more
expensive. That incentivizes people to move to cheaper areas.

That could be a good thing for the US. Ever since our ag industry automated
and our manufacturing industry moved overseas, we have lost most of the forces
pulling people towards smaller cities. The result is an increasing
concentration in a few metro areas not designed to handle that population.
This in turn creates a bunch of knock-on effects: greater homelessness,
greater economic sorting where people rarely interact with people outside of
their economic level, and increasingly painful commutes for lower income
people.

An incentive to mitigate that and encourage Americans to move out of the big
cities could be a good thing.

~~~
JoeAltmaier
Pay raise and pay cut are not justified descriptions. Given folks can live
where they like, its simply a choice of where you want to live, vs what you
can afford.

I agree that work and location will be decoupled for information workers,
because the modern world is going that way. Its just something we'll have to
adapt to.

~~~
munificent
_> Pay raise and pay cut are not justified descriptions._

That's why I said "essentially". :) Compared to the alternative where salaries
are location independent, it functions as a change in salary.

 _> Given folks can live where they like_

Switching costs for moving are relatively low for young, healthy, childless
renters, but are much higher for many others. Not wanting to move away from
family (who may also be providing free childcare for you), not wanting to move
away from close friends (who studies repeatedly show are critical for mental
health), not wanting to disrupt your child's or partner's education, needing
to find a buyer for your old house, finding a new house to buy, being
underwater on your loan, not wanting to change doctors while in the middle of
a long-term or chronic illness, having a hobby or passion that is highly
location dependent, etc.

Moving is _hard_. Anyone who thinks it isn't likely hasn't put down roots
enough to realize the benefits that accrue from _not_ moving.

~~~
JoeAltmaier
Yeah I know, its hard. Done it 14 times, mostly about chasing jobs.

Living where you can't afford/don't have a job is not any kind of excuse for
not moving. Some of the others - sure I'd like to be near family, but not if
I'm going broke.

Strawmen for why-not-to-move are interesting but not statistically so. Most
folks can move, especially the younger. There are far more younger folks than
old ones.

------
hysan
The question feels too open ended in the sense that there is no baseline
premise on how the adjustment is being made. Cost of living varies greatly,
can change at different rates, and if you're talking about the US, there are
some aspects of your pay that aren't directly reflected in your salary -
health benefits.

Let's take that latter point as an example. Health care plans differ per state
and you are usually better off having your health care plan be from the state
you are living in. At all the companies I've worked at, the plan is usually
from the state where they have their HQ and subsequently, most employees. If
you live in a branch office, that means your plan isn't as useful to you (this
actually factored into comparing similar offers to me recently).

Now an employee moving knows the risk and how this will affect their coverage.
For a company to adjust their salary based on where they live, how will they
take this into account? Are they going to do a per-state/per-city level
analysis of say, how their provider network coverage differs? Then pay you
more if your coverage is worse off?

I'm not a risk taker, but I'd be willing to bet that most debates won't take
something like this into account. However, this and many other factors matter
a lot in determining what is considered "fair" compensation for a given area.
If the premise of what a fair adjustment is cannot be established, then I
believe that this isn't even a debate because the hypothetical reduces to,
"what excuse can we use to cut someone's pay?"

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pmiller2
First, what do you mean by “should”?

In the predictive sense, if a company can hire a remote employee to do a job
for $X per year, or a different remote employee to do the job equally well for
$0.9X per year, the rational economic choice is to prefer the lower paid
employee.

In the normative sense, the employee is selling their ideas and labor. Those
things don’t change in value when they move, at least not within the same time
zone. So, if you’re selling your labor and ideas in one location vs another in
the same time zone, you “should” get the same no matter what.

We all know which of these scenarios actually happens in real life, and it’s
because the power disparity between employee and employer is so skewed in
favor of the employer. And, as I’ve alluded to, time zone can change things,
because having an employee whose normal work hours allow them to respond to
incidents that would be happening in the middle of the night can be valuable.
Conversely, if a company depends on synchronous communication, having work
shifts overlap is valuable.

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symmitchry
During hiring, it makes lots of sense. A Kansas candidate could certainly
accept a lower-paying job than an SF one. It makes less sense when you move
while already employed, since the cost of re-hiring would greatly exceed the
delta they might save. I guess it becomes a question then of are you willing
to put your job on the line and demand the identical salary.

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allsystemsgo
Only if it’s reviewed for cost of living adjustments each year IMHO. In Texas,
DFW used to be cheap. It’s on par with Austin now.

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mnm1
If the salary is already negotiated, it'd be extremely demoralizing for the
company to force the employee to take less. A company that's willing to pay
less because one lives somewhere else after one has proven oneself is a
company that has the least engaged, most demoralized employees possible. The
productivity lost is undoubtedly many times higher than what was saved in COL
adjustments. It's amazing how brain dead most companies are, so focused on
intermediate goals to the major detriment of the entire company's progress.
This is one prime example. Another is not giving yearly raises, at least to
adjust for inflation. Or lowering benefits. If the benefits are still good,
people will stick around and put in the minimum.

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Nasrudith
Is the location or nationality relevant to the job location? Maybe it has some
different overhead, regulations, better access to customers, internet
access/lower latency which could affect the actual value of the employee
depending on location. when it matters then it may make sense to care about it
enough to pay a premium for high CoL if it is linked to something you want or
a lower rate if other features make them less desirable.

If not then it is a cargo-culted antipattern because of the deadly words "That
is always the way it was done." You would fundamentally wind up squandering
money and talent by overpaying high CoL without the benefits of the location
and losing comparable talents from a low CoL by showing them you don't value
them.

------
bane
Whenever this topic gets brought up, it invariably is seeking big-city pay in
small-town locations.

The more important question is this: suppose we live in a world where all
remote employees make essentially the same. Why wouldn't an employer simply
choose to pay the absolute bottom rate salary for an employee living in the
absolute cheapest possible location and not pay more for people living in
significantly more expensive locales?

It can also be very enlightening to look at the US Government GS Pay schedule,
which sets a base salary at specific employment levels, then has a page of
secondary schedules with "locality pay differences" depending on location. For
example, a USG in NYC makes about 34% more than the base salary for living in
Podunk, Mississippi.

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keiferski
The thing is, salaries are only high because they are based on geography. The
extreme cost of living in SF and NYC contributes to the high salaries in the
respective cities. If the COL were lower there, the salaries would never have
become so high.

It is counter-intuitive, but I actually think everyone benefits from super
high salaries in coastal cities, as it makes the benchmark rather high and
thus even non-coastal employees benefit from a high expectation of a ‘proper’
salary. In other words, I’d FAANG were paying devs $50,000 a year in SF,
there’d be zero chance that a dev in Iowa or Missouri would be making anywhere
close to that.

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johnminter
In my opinion one should be paid a rate commensurate with what you produce for
your employer. If you choose to live in a remote location where your salary
goes further, you should be able to enjoy that outcome. It should be no
surprise any adult that employers will pay the least they can. When they do
that, employees vote with their feet. Good employers count the cost of
turnover and generally pay what is required to keep their productive
employees. Large systemic changes upset the "normal case". My friends (and
their managers) left at the company from which I retired took pay or hour
reductions to get through the covid-19 issue. Nobody liked it, but there were
few options at the time.

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swiley
No that makes no sense. The only reason it used to be that way is because
companies had to pay a living wage for employees that lived near their
offices.

There’s no good reason to hire from HCOL areas over others now so there’s no
real reason for companies to pay extra.

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thrill
Only if their physical location is a condition of employment.

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aSplash0fDerp
If they avoid calling it a proximity bonus and call it an on-call bonus, legal
may have some footing to pass on to HR. Though this is only an issue for
existing operations.

If its an 8 hour workday, being able to make hypothetical emergency briefings
at the office within 2 hours with no/short notice may be worth a 25% salary
hike.

Its the new remote first companies that will exclusively hire for skill and
balance the equation once the next wave gains more traction.

------
xbmcuser
No. If a person moves from a 4-5 bedroom house to a studio apartment their
cost of living will come down even if living in the same city. They are paid
for the work not where they live. Software development salaries will probably
overall now face downward pressure as because of remote work more people will
be willing to accept lower salaries if their cost of living is lower

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chrisco255
In my company, we only have a few U.S.-based regions that more or less amount
to SF, NYC, and the rest of the U.S. for salary adjustment. There is a base
rate that stays the same regardless of location and then there is a market
adjustment for those special cases. In my experience, the base salary is high
enough where you could comfortably live in 90+% of the country and feel good
about your comp.

------
bsenftner
Of course, there are two correct answers: those employees able to negotiate
away their location having any relevance to their pay, and those who due to
hierarchy position or lack of negotiating skills have their pay pro-rated
against their location and potentially a giant host of additional factors
beyond the employee's control. The course of action is clear: learn to
negotiate.

~~~
lotsofpulp
>The course of action is clear: learn to negotiate.

I think learning to negotiate is second to selling something which you have
multiple buyers to choose from and few competing sellers. If that’s not the
case, you won’t be able to negotiate in the first place, and you need to
figure out something else to sell.

~~~
bsenftner
There is a lot more to negotiation than the multiple buyers scenario.

~~~
lotsofpulp
Not unless either party has the ability to walk away, which means multiple
buyers. If I’m a buyer and I know you have no other options, why would I
negotiate?

~~~
bsenftner
If one has no options and they treat the other party with an acknowledged lack
of options, the poorly treated party can undermine the dominate party through
publicity and peer shaming. There are many options for the individual trained
in negotiation, and walking away for other options is the most primitive and
least effective maximization strategy.

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runjake
They should be the same, because they provide the same value to the company.

Also, there are trade-offs to where one lives.

I probably don't need to list the up and downsides of urban living to this
audience, but living in a rural area, you:

\- Definitely can't get by without a vehicle, if you live some distance from a
city

\- Fuel for that vehicle

\- Goods and services tend to cost more

\- Less convenient access to museums, parks, gyms, etc.

\- Often more money is needed to maintain real estate.

------
HumblyTossed
Why on Earth should a company pay someone who lives in SF a higher wage just
because they choose to live in a million dollar shack?

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newsbinator
Yes, and it should also be tied to their spouse's income, their sex, gender,
age, and skin color, to keep things fair. Perhaps their sibling's/ancestor's
income too. Make sure you account for all these factors to keep things equal.

But if you're not able to account for all these factors, why not determine
what an employee at a given level is worth to the company, and pay that amount
to anybody who can successfully communicate & do the work, regardless of their
circumstances or physical attributes?

~~~
bboygravity
> But if you're not able to account for all these factors, why not determine
> what an employee at a given level is worth to the company, and pay that
> amount to anybody who can successfully communicate & do the work, regardless
> of their circumstances or physical attributes?

Sounds good to me. I'd be a retired millionaire at age 30 something if any of
the companies I've worked for (remotely or otherwise) followed that logic.

Example: I found the correct root causes of failures in an aerospace product
within months. The company's own R&D team had been trying different "fixes"
that weren't fixes for at least 5 years. They had spent 1 million EUR in R&D
material cost alone (not counting engineering time cost). They lost multiple
clients to competitors (> 15 years contracts worth millions per client) due to
the malfunctioning product. After I came through the problem was fixed,
tested, confirmed to be fixed and implemented within months.

And that's an example of one project of a few months for one of my clients.

hmmm. Maybe I should start charging differently. :D

~~~
bradstewart
> I'd be a retired millionaire at age 30 something

How do you know what value the companies would assign to those factors?

~~~
bboygravity
They assign to those factors whatever you can convince them of as an
employee/contractor during your interview :)

In case you're fixing an existing problem, the cost of the problem is often
roughly known (like in my example). Lost clients due to the specific bug,
current clients threatening to leave, sunken/running R&D costs without a
solution, missed sales/tenders where clients mentioned the bug as a reason,
long term damage to the brand, etc. You might be able to roughly extrapolate
that into the future.

In case you're working on a new product or general improvement it can be
impossible to measure how much your contribution was worth.

Hence, employees/contractors are usually valued by the hour or by the amount
of equity they own and not actually by their value to the company.

In some industries it is possible to be valued exactly by the value you saved.
A common example that comes to mind: a lawyer who does pro bono work.

Another example in engineering: filing warranty claims for failing (very
expensive) products. You could negotiate to get a percentage of every
successful claim. I've heard of people making millions that way in aerospace.
Apparently companies in aerospace for whatever reason often don't claim
warranty when they're entitled too. Keep in mind that large companies in some
industries really really don't care about a couple of deci-millions here and
there because their turnover is in the billions and they have "better things
to do" :D

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elil17
Paying people extra for living in HCOL areas is a great way to further fuck up
the housing markets of expensive cities

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irrational
Should someone be paid more if they move to an area with a higher cost of
living, even if they started in an area where they were making a lower salary?

If I move from nowhere, KS to NYC or SF, should my salary quadruple (or more)?

Hmm, if so, how hard would it be to game the system and only make it look like
you moved to an area with a high CoL?

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verdverm
Does your company base it's product price on cost or value when selling?

Should employees be thought of differently?

My answer is No, they should not have to take a pay cut based on location.

Another thought, if you do cut their salary, what does that do to loyalty and
retention? Will you be paying more in the end to replace good people?

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elmerfud
It's rare to find a large national or international business that doesn't
price differently based on location. This sometimes is due to taxation
difference but mostly due to regulatory differences that effect the cost to
deliver. Even companies that have flat list prices, what you'll find is that
discounts are offered based on a number of factors with economic location
being one.

If location was the only factor that changed then I would a agree that the
companies monetary exchange for work value should be the same. It's very rare
that when making a move like this that location will be the only factor that
changed.

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verdverm
If you sell a physical product, this is often the case. When I sell license
for access, I charge based on value, not how much it costs me to deliver. Even
physical products, which have not been commoditized, see value based pricing.

When a person moves, what other factors are effecting the company which
justified the reduced salary?

If someone did that to me, is be looking for new work while grumbling doing
old work. So if you do this and lose the employee, does it actually cost the
company more?

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davidgay
> When I sell license for access, I charge based on value, not how much it
> costs me to deliver.

The value often depends on the customer's location. Or do you think, e.g.,
Photoshop provides the same value to a photographers in New York and Cairo?

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Dotnaught
Also, should employees' salaries be tied to their position on the org chart,
should high and low salary ratios fall within a bounded range, and should
employees all get some portion of ownership of the companies they work for?

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davidg109
I think the real question, if a company can hire someone cheaper that can do
the job just as well as the more expensive employee, why should the company
keep them? I believe this has already been answered by the market.

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defdefred
Salary comparison base on $ seems non sense. How about making comparison with
local usefull goods: kg of rice, litter of potable water, number of m2 you can
mensualy rent...

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nell
What if we invert this.

Assume the company pays the same irrespective of location.

Should an employee in SF or NY have a lower standard of living compared to an
engineer who lives in a low COL area?

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graerg
I know this is a rhetorical question but the affirmative answer isn't entirely
unreasonable. If an engineer can deliver the same value from remote then maybe
yes, they should bear the cost burden of living in NY or SF.

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timemct
Nope. Cost of Living (CoL) will always out pace/pivot faster than HR could
accommodate.

