
Canadians working from home permanently should expect salary changes: experts - bickeringyokel
https://www.theglobeandmail.com/business/article-canadians-working-from-home-permanently-should-expect-salary-changes/
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caterama
Basically every piece of advice on negotiating a promotion says something like
"I just bought a car, and I need more money" is not a good argument in support
of a promotion. But now the employer is using the same reasoning against you!!
Your cost of living went down, so you're going to get paid less? How about you
go move to a super cheap place, and instead of paying rent, take out a loan
and buy some crazy cars. Now my cost of living is back up again... can I have
that money back?

Just pay people for the value they provide. I think there's some room to argue
that a remote only employee provides less value. Everyone in the same
timezone, lack of face to face time, hallway encounters, going out to lunch,
etc. have tangible value to the employer that is lost in the transition to
remote work. But the arguments I see from Facebook and in this article are
about cost of living. That's wrong. Price it based on value created by the
employee.

If the permanence of remote work indeed turns into a long term trend, I think
we're going to see some bumpy road ahead while individuals grapple with first
moving and then local supply and demand in their new location. Fix your
location, and then consider that if given the same pay, and same work, would
you rather work remotely or in person? I would rather work in person for a
couple of reasons including socialization, removal of distractions in a
workplace environment, etc.

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erik_seaberg
Cost of living is a red herring. The market-clearing price for your labor is
lower because you cut yourself off from a lot of competing non-remote
employers.

But if most employers were to go fully remote, at that point the shortage-
driven Silicon Valley wages would drop near the national average, regardless
of how much more it costs us to live here.

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smcphile
> But if most employers were to go fully remote, at that point the shortage-
> driven Silicon Valley wages would drop near the national average, regardless
> of how much more it costs us to live here.

Yes, and, using the same reasoning, at some point the cost of living in
Silicon Valley would also go down so as to approach the national average.

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erik_seaberg
Tech workers are only 7-12% of the population. Unless other industries also go
remote and move away, the Bay Area is still going to have local and foreign
speculators cashing in on a severe housing shortage.

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sethammons
I have a hard time swallowing that the pay for remote workers should be based
on the employee’s cost of living. My degree is in business and I very clearly
recall the lesson on if it was ethical to pay someone with kids more (ie, at
raise time) than someone without. The conclusion was that the value the
employee brought was consistent and you can’t price in their financial
decisions; that it was an old school thing to give a raise for having a kid.

If I am a remote worker and I work in downtown SF or in a flyover state does
not change the value I bring. If the bean counters are not giving a raise when
you have a new kid, they shouldn’t be cutting your pay when you move to a
lower cost area.

It is all smoke an mirrors to improve the financials of the company. I’d be
more for it if they just said so instead of lying and hiding it behind other
reasons.

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dangus
But of course, the salary of employees is not purely based on the value they
provide. It's also based on availability of labor.

COVID-19 doesn't really change the equation. Remote workers are already paid
based on the prevailing wages in their locality.

Someone who was working in the bay area and now has been given free rein to go
permanently remote is simply new to the remote work system, and they
absolutely should expect a lower wage if they decide to live elsewhere.

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sethammons
Supply and demand, of course. If you are in they bay area and already working
remotely, how is that materially different if you move an hour away? Or 3
hours away? Or to the next state or two over? You were already in the “remote
work” category. In fact, you were already working at that company at a given
wage. I plain just don’t see the difference in the same remote worker in the
next suburb over vs next city over vs next state over (granted similar working
hours / timezones).

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austhrow743
If you're in the Bay Area then you can take Bay Area jobs that are not remote.

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jlbnjmn
The bubble is deflating instead of popping.

First, lower salaries for remote workers.

Next, lower salaries for on premises workers.

Then, lower salaries for everyone.

What they're trying to say is that there's deflationary pressure on wages.

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matanrubin
Does this go both ways? Would i get an automatic raise by just moving to a
more expensive place? I suspect the answer is no, which shows employers are
just fishing for opportunities to lower wages with this bulshit argument.

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Smoosh
There's also the fact that companies will location-shop, pitting states/towns
against each other to host a new headquarters etc. So if the company can seek
to reduce their overheads for their own financial benefit, why not the staff?

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PeterStuer
Businesses pay employees the minimum it takes for them not to quit or lack
motivation.

If the work can be done remote, and the employee values that, then they can be
payed less.

If the work can be done remote, but the employee does not value that, they
could still be payed less if the company is willing and able to potentially
replace the worker with one that does value remote work.

In any case, renegotiating wages downward is a strong demotivator, so
businesses might opt to leave that work to the grindstone of inflation.

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marcus_holmes
I wonder what effect this will have on remote comminities. The places that are
ghost towns now, and you can buy a house for peanuts because there's nothing
there. If the average remote worker can move there, take a huge pay cut and
still have a reasonable lifestyle (because no mortgage), then they're going to
be irreplaceable.

"yeah, Bob's a bit lazy, and he doesn't do all the hours, but at his rate we
can hire two of him for the cost of a decent worker somewhere else"

Of course, eventually this will even out, and arbitraging remote locations
won't work any more. But then there will be people living in all the little
towns and villages we left 100 years ago. Not a bad thing to happen.

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bickeringyokel
I don't think they's a problem with hiring workers based on market wages, but
we're talking about these companies who seek to disincentivize existing remote
workers and take advantage of the current situation to decrease worker
salaries while keeping them on board. If your worker is remote, their location
doesn't matter so long as they have a good internet connection. This all comes
across as opportunistic and bordering on coercive. Honestly wage decreases in
general seem exploitative since the worker doesn't really hold much bargaining
power especially in an economic downturn.

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helen___keller
In theory, if every job went remote, employees would have more bargaining
power, as they have more options, which gives leverage.

In reality, most people aren't skilled negotiators, and become significantly
less motivated to negotiate salary once they reach a number that they feel is
"fair". And "fair" seems to be a correlated with living expenses.

Furthermore, if most engineers are willing to take a pay cut, this would
impact those who are skilled negotiators, for the obvious reason that industry
trends are an anchoring point for salary.

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Terretta
Surely a key change would be a home office subsidy, say, split the difference
on the cost per employee for footprint?

That would also be benefiting the lowest paid employees proportionately more
than the highest.

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aroberge
So, employers are going to finance wealth accumulation for people buying a
house in a high cost of living area?

[House ownership rate in Canada is 65%. Mortgage payment are not tax
deductible.]

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downerending
This is all rather beside the point. If you can get a better offer elsewhere,
take it. Ideally, develop two or three good offers and take the best.

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axilmar
So what if I chose to live in an area more expensive than what the company is
in? would they then increase my salary accordingly?

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throw213345
for arbitrary rules, people will start exploring things at the margins. like
that gitlab link can help figure out the best real estate properties where you
stay at the edge of a zipcode which pays the most but is next to a zipcode
which offers better quality of living.

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redis_mlc
The article is poorly edited and researched.

For example:

"Its co-founder Sid Sijbrandij wrote in a blog that the calculator was dreamed
up because every time he hired someone, there was a conversation around
reasonable compensation.

The negotiation would usually revolve around what the person made beforehand,
which was dependent on what city they were in. Gitlab scrapped that model in
favour of the calculator and also started letting workers know if they move
their salary could change."

"what the person made beforehand" is rarely disclosed, so I really question
the article.

