
Facebook employees may face pay cut if they move to cheaper areas to remote work - pseudolus
https://www.marketwatch.com/story/facebook-employees-may-face-pay-cut-if-they-move-to-cheaper-areas-to-work-from-home-2020-05-21
======
Fej
Previous discussion:
[https://news.ycombinator.com/item?id=23261394](https://news.ycombinator.com/item?id=23261394)

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klodolph
Every company that I’ve worked for which has offices in the SF Bay area and
offices somewhere else has had a location-based adjustment to pay. Every
single one.

Honestly, if I exercise my imagination a little bit and try to remember what
it was like to live in a city which didn’t have jobs from most of the “big
tech” companies, I would have loved to see a greater _variety_ of job
opportunities without being asked to move to SF/Seattle/NYC etc. It would have
meant that I could get career growth and keep my friends and support network.

~~~
demarq
Also if the value and quality of work is the same... shouldn't the pay remain
the same.

Also this leads to income inequality. A person from a poor
neighborhood/country gets paid less than someone in a wealthy area.

~~~
klodolph
> Also if the value and quality of work is the same... shouldn't the pay
> remain the same.

Why would this apply to remote workers but not local workers? Are you saying
that you should pay convenience store workers the same everywhere, in New York
and Lincoln, NE?

You could turn it around, and I’d say that if rent goes up, wages should go up
too. People should get CoL adjustments separately from raises. If we get CoL
adjustments for inflation over time (you get paid more in 2020 because 2020 is
more expensive than 1990) why wouldn’t it also apply to location (you get paid
more in NYC because NYC is more expensive than Lincoln, NE).

(I’d also argue that the value & quality of local workers in dense cities is
higher.)

~~~
demarq
if they work for the same company and deliver the same value... yes that is
exactly what I'm saying.

~~~
klodolph
Categorically, the value of remote workers is lower than the value of local
workers.

This is largely due to network effects and the higher efficiency of
communication with co-located teams. I’m a software engineer, and like other
software engineers, my job is something like 50% communication and 50%
coding/testing/operations. As you go up in seniority and expertise, the ratio
shifts more and more in favor of communication. A fresh graduate or more
junior employee might have a larger share of coding/testing/operations.

The communication side of my job is suffering like never before during
mandatory WFH.

~~~
saq7
This might be on you and the company you work for. Many companies have remote
work baked into their culture and from my experience, the quality of
communication tends to be quite high

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carterklein13
I feel that I'm in the minority here, but this appears to be a somewhat
understandable move. To be able to live in the location you most desire is,
frankly, still a luxury for the time being and while I hope that's not the
status quo forever it's definitely the case now.

And, to attempt to refute the points made that the worker a value adds to a
company doesn't depend on location, I completely agree with the basic premise
- but I feel that salary should be adjusted so that all employees can share a
similar quality-of-life across the board wherever they're geographically
based.

Maybe I am a little bit biased because I'm currently on the other side of this
coin. I work at a company based in the US South, and managed to get into their
more cutting-edge and innovative NYC office. Plus, I'm from NYC and love the
city, it's my ideal location to live and work.

Yet, while their NYC office is "cost-of-living adjusted" for salary, I am
certainly worse off than the employees based out of the HQ. The difference in
pay to provide the same quality-of-life between a huge global city and a mid-
sized regional city can be staggering.

And obviously, I know I could live way out in an outer borough or in Long
Island / Westchester / NJ and have the same overall costs associated with
someone in the HQ, but then I'm 60+ minutes from the office and my ideal
life/work location anyway.

~~~
ghaff
The Bay Area salaries paid by the big tech employers are not really
representative of the "CoL allowances" historically paid for working in places
like Manhattan and SV. With some exceptions, like successful Wall Street
traders, Big Law, etc., additional comp earned in those places was still not
usually enough to make up for higher living costs. Today that's probably not
the case at at least a handful of big companies.

~~~
carterklein13
I'm a bit confused by your wording of your first sentence, honestly. Also,
what's probably not the case? I feel that working at a big tech firm is akin
to working in IB/consulting/law at this point in terms of pay/bonus (bonus at
big tech being the RSUs as opposed to cash, but a "bonus" nonetheless).

I'd just like to best understand your point, as this is going to be an
interesting topic we're going to see more and more in the coming months/years
I think.

~~~
ghaff
As many frequently argue here, dev comp at the big tech employers does
generally compensate and more for the high CoL in the Bay Area.

Historically, I don't think that was generally the case in places like the Bay
Area and Manhattan. I know when I looked at some Bay Area opportunities way
back when, people were quite candid that the salaries on offer couldn't really
compensate for housing prices. That said, there were probably some exceptions,
especially in NYC, similar to how tech is today.

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jedimastert
A lot of people are asking "why would they pay less" and that seems like a
silly question to me. They'd pay less because of course they would. Less money
spent is less money spent.

The real question is "why would they pay _more_?" It's not charity. I'm sure
the company would be much happier to pay a livable wage in rural Kentucky. But
for a livable in rural Kentucky wouldn't pay for rent and food at the same
time in SF or NYC, and up until somewhat recently you needed all of your
workers to live in the same place, which meant a high population density, and
proximity to where everyone else is, because all of the talent was migrating
to the same place.

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gexla
RIP high tech salaries. If you were teetering on a decision between working in
a FAANG company or starting your own business, then this adds some weight for
the "own business" side.

I get that high salaries are partly a result of war for talent. This demand
will continue to prop up salaries to a certain level. But how much does
location play into scarcity?

Line up all the people around the world who could work for a FAANG company.
Eliminate everyone who can't get a visa to work in the US. Add back all the
people living in the US who could work for a FAANG company. Eliminate everyone
can can't or won't live in one of the most expensive cities in the world
(maybe not a concern for foreign workers at this point because they have
already accepted and received the visa, but it will cut out a lot of US
citizens.) Eliminate everyone (mostly US) who already has a job and isn't
bothering to look for another. Add moving into a city with not enough housing
as friction. Add available office space as friction.

Am I missing anything?

How many more people do we now have that can compete for jobs at these
companies? 2X? 10X?

If FAANG companies are now hiring from anywhere in the world, why wouldn't
China create a state backed initiative to run Olympic level intensive programs
specifically targeted at filling seats at these FAANG companies? It would be a
national program for creating high paying jobs and it would provide a sense of
national pride of having the greatest talent for the industry. Why wouldn't
these countries become as competitive with providing workers for the tech
industry as they have become with manufacturing?

Aside from having a greater pool of available workers to pull from, this is a
major reset event. The other side of this reset could look very different than
it did a few months ago. WFH is just the first big change.

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marcoperaza
I'm amused at all the highly-paid software engineers in this thread who
legitimately feel entitled to their Silicon Valley pay-scale. The only reason
you make more than the fellow laying your tile is because of supply and
demand, not because you _deserve_ it. If anything, he certainly works harder
and longer and risks more health consequences than you.

If Facebook is offering less than the market price for that labor, then
employees will go elsewhere. Otherwise, they're paying the "right" amount for
workers in that market. There's no moral dimension to this question.

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CyberFonic
They should be paying you more, because they are saving on office space rental
when you work remotely.

So they are not only saving on salaries, but on rents as well. Cheeky
bastards.

~~~
jedimastert
What responsibility does a company have to pass profits onto it's employees?
If you a share of the profits, buy some shares.

~~~
thinkingemote
It's verging into the same old "this is not censorship it's a private company"
argument.

What right has any human against a private company? Why even comment in this
thread?

Sarcasm btw.

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tom-thistime
Folks, with utmost respect: The only reason you're making 300k is that your
physical butt is in Silicon Valley.

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tfmattder
I do the same thing: I value a 100% effort let's say at 250k, if I get paid
100k I give my ~40%.

So far it has worked well. I get paid similar to my peers, and doing the same
amount of work takes around ~40% of my day, although it's really variable.

I tried to work harder, but it's not worth it. I got small pay rises, but far
bellow my effort. It was also psychologically harder as people would try to
stop me one way or the other. With this dynamic, I can have peaceful work days
now: I learn new technologies or spend time in the games room (with my family
now), and almost never need to stay longer. In contrast, I see my peers
working at home at 10-11pm or even on weekends to finish off things for the
sprint. I even realized giving more difficult solutions makes my work life
much easier, because people can't keep up :) (I have tests I don't commit and
other automation projects that make my work much simpler).

It's ok when companies say this, but I have to hide my situation as I probably
would get fired (or given more work) if people get to know what I do.

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ckdarby
Does anyone have a good explanation why companies do this?

Wouldn't it be more beneficial to continue the same paying structure because
of the retention?

My gut feel would be that if Facebook continued paying same rate even though
people weren't in the bay area anymore that nobody would ever be able to
compete and therefore the retention would be much longer.

~~~
ghaff
At some point, having everyone in golden handcuffs isn't necessarily a wholly
positive thing. If you're working for Facebook in a low-cost area at a (high-
end) SV salary, you've got a huge incentive to just tough it out even if you
hate your job.

Companies adjust pay scales because they mostly can and I doubt there are a
material number of large distributed companies that don't do so. If they pay
competitive Bay Area salaries everywhere, then they're paying more than they
need to in order to hire people elsewhere.

~~~
tosers4
This. Tbh even recently we have had something similiar in our city about a
companie moving there and the pay was ridiculously above the median, golden
handcuffs was of of the topics of the discussion, specially by colleagues that
were part of a consulting company already working for them before them moved
in. It's not a nice feeling knowing that if you leave a job, there is no way
you can get the same payment. One of the nice things about being a programmer
is that I can leave my job whenever I need, as employment is abundant, but if
there is no comparable paycheck, then that perk goes away. And that is a very
nice perk that lots of people here take for granted.

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BooneJS
I transferred out of the Bay Area a year ago, and my FAANG salary was cut 15%.
For them, salaries are based on “Cost of Labor”, or the cost of getting a
person to join in that area, not “Cost of Living”.

I’m still doing just fine.

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yalogin
I am surprised to see comments on HN accusing the company of theft and greed
for doing this. Isn’t the cost of living in an area the biggest factor in the
salary? If so moving to another area will automatically reduce the salary. I
don’t think they are being unfair or greedy. You don’t want the salary
structure to in a remote area to be the same as the Bay Area. That will be
unfair to the rest of the companies that want to hire in that city.

~~~
generalpass
> I am surprised to see comments on HN accusing the company of theft and greed
> for doing this. Isn’t the cost of living in an area the biggest factor in
> the salary? If so moving to another area will automatically reduce the
> salary. I don’t think they are being unfair or greedy. You don’t want the
> salary structure to in a remote area to be the same as the Bay Area. That
> will be unfair to the rest of the companies that want to hire in that city.

If this were the case, it would not be that so many companies have moved out
of the Bay Area. I know of a small manufacturer that moved their entire
operation 3000 miles away with 7 years left on their lease. That was a few
years ago and the building is still empty.

The businesses that remain are ones where the salaries align with the living
expenses, not the other way around.

I suspect this trend of lowering pay based on location will work while there
are limited employers hiring remotely. If there is broad embracing, then
salaries will likely rise to reduce attrition.

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dan_can_code
I suppose this is a good and a bad thing. It's good in a sense that if remote
companies wish to attract better talent, they just have to out-pay Facebook.
It would be bad if all tech companies decided to pay everyone less however,
following Facebooks lead. It will be interesting to see how this plays out.

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random32840
Can anyone explain why companies do this, but still hire from the expensive
areas? If they pay less for the same level of skill in Texas, why don't they
stop hiring in SF full stop and only hire in Texas? Is it just a bluff and
they'll cave if you challenge them?

~~~
jedimastert
Because they don't pay people based on how much they're worth. They pay based
on how much you'd say yes to.

~~~
random32840
Right - but you have the same value either way, you just have to apply
leverage, right? The gig's up if you don't have to say yes to the lowball
offer. What force prevents you just pitting two+ SF companies against each
other in a bidding war?

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demarq
honestly I've never seen so many people rush to defend a corporations right to
pay them less.

~~~
gridlockd
That's a very one-sided view. What about the _worker 's_ right to get a
competitive edge by _charging less_ for their labor? Why the hell should most
of the jobs go to people who are in Silicon Valley? Why should people have to
pay extortionate prices to live there?

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pedrosorio
What if you want to work remotely from a nonfixed location?

~~~
jedimastert
Do to a lot of things (citizenship, licenses, taxes, etc) you aren't legally
allowed to be employed without a address on a form somewhere

~~~
ghaff
Furthermore, most companies still exercise some control over remote work
whether formally or otherwise. That someone can work remotely mostly from a
fixed address in the same country, doesn't mean they automatically have the
right to work from a beach in Thailand or as a digital nomad.

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ReticentVole
What's to stop you nominating a family member's address as your household
address and just physically living in another area?

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DanBC
It's fraud.

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m3kw9
What if that actually ends you up with more?

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oliveshell
Then maybe the pay increase will help ameliorate what I can only imagine is
the subtle pain in one’s soul caused by working for Facebook in 2020.

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edu
One important point is that this is people that _willingly_. move from Bay
Area to cheaper areas, not expatriates.

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jhamilton
This is disgusting. The value a worker provides the company does not magically
go down just because their expenses go down. If I am providing the same value
that another worker is, we should be compensated similarly regardless of where
we choose to live.

Anything less is theft

~~~
cactus2093
Do you know of a single company that doesn’t do this?

Even HN darlings famous for being remote-first like Gitlab adjust salary to
cost of living.

~~~
tosers4
Basecamp. But companies that do this don't pay SV level salaries, obviously.

~~~
ghaff
Basecamp claims to--not including options. (Which is of course a big not
including in some people's minds relative to the big public firms.) And
they're probably (all?) relatively small.

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austurist
It is understandable. And it is also easy to define what a "fair" cut is: if
there is no incentive to migrate between the regions of different salary
levels.

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purplezooey
Would be nice if Menlo Park would rise to the challenge and actually allow
some housing to be b built.

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IdoRA
GS wages are adjusted to MSA, so why shouldn’t Facebook do the same?

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themistokl1k
i mean that was wildly expected, right?

~~~
edu
I expected it, and actually think that expecting otherwise is a little bit of
_snowflake-thinking_.

~~~
bbrree66
+1. All the snowflakes will cry about "unfair" whine whine. And ignore
reality. As per usual! There is no logical reason why they wouldn't pay based
on location.

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jondubois
This is in itself is an admission that capitalism doesn't work and that
Facebook is a monopoly. If the environment was truly competitive, then
companies would not be able to conflate the value of employees' skills with
their location. It sounds like Facebook has the power to fully dictate the
wages of their employees.

~~~
bbrree66
...... what? This is an example that capitalism does work. If someone wants to
live in Random City A then Facebook will still have to compete with the local
wages there to get people to work for them. The labor market is supply and
demand driven. And of course Facebook decides the wages of their employees,
how else would it work? The employment agreement is two sided, if people don't
like the offer they can go work somewhere else.

Massive caveat: Facebook is an absolutely garbage company and the world would
be better off if they didn't exist. But paying less based on location is
reasonable.

~~~
chosenbreed37
> Massive caveat: Facebook is an absolutely garbage company and the world
> would be better off if they didn't exist. But paying less based on location
> is reasonable.

Mmm...would garbage companies also include any of these Tik-tok, instagram,
snapchat? Would you care to point out some non-garbage companies as well? I'm
not against your perspective. I've encountered a few times already just on
this thread. I'm just curious to see what is considered a good company.
Amazon, Tesla, AirBnb, Netflix, Google, Microsoft, Salesforce, SAP? Or maybe
there are no good guys.

~~~
bbrree66
It's a good question. By garbage here I mean their entire existence is based
on wasting people's time and then making money by showing Ads. Their entire
incentive structure is to get people as addicted as possible. They are not
trying to add value to the world. Also, most people aren't aware of the trade-
off they are making (data being sold), or how they are being manipulated,
which makes it doubly terrible. Or that there are armies of behavior
psychologists trying to get them to spend as much time as possible on the
site.

"Good" is a sliding scale here, we each have our own subjective definition. I
try to define it as "Is the world a better place because this company exists?"
I personally would answer Yes for the companies you listed.

