
VMware Cuts Pay for Remote Workers Fleeing Silicon Valley - x87678r
https://finance.yahoo.com/news/vmware-twitter-cut-pay-remote-184722278.html
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a3n
I thought people in SV are paid what they're paid because they're uniquely
qualified and productive, making their employers extremely profitable, or
salable.

Is that no longer true when they don't sit in a SV chair?

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amscanne
It’s funny: I don’t know where people get the idea that people are paid based
on the value they produce. People are paid based on the amount they command in
the labor market, and labor markets are local (and if they produce less value
than they command, there’s no hire). It works like nearly every other economic
transaction. Engineers cost more in the valley because there is far more
competition to hire them, not because they are unilaterally better or more
qualified. (Not to say there isn’t a lot of great talent in the valley, but
I’m sure there’s lots of talent outside the valley as well.)

I’m not sure if your comment was sarcastic or not, but this is an extremely
common misunderstanding. It often comes up when people discuss CEO salaries
(“do they really work YYY times harder than entry level staff?”, as if people
are paid based on how hard they work).

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loki49152
Labor markets aren't local when everyone can work from home. That's why this
kind of move is absurd. Talent outside the Valley might be willing to take
lower pay, based on lower cost of living, but just like everything else the
price of their labor shouldn't be based on the cost to produce it.

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amscanne
Labor markets are still local until we have widespread remote working. That’s
not the case yet. I’m sure companies remote compensation will become
competitive in the all remote market as it evolves, whatever it turns out to
look like.

I think the word “absurd” is an inappropriate description, which is just the
company behaving rationally.

> just like everything else the price of their labor shouldn't be based on the
> cost to produce it

This is another misunderstanding. Nothings price is fundamentally based on the
cost to produce it — that only happens for commodities in competitive markets.
The cost of labor is based on supply & demand. And that’s different today in
different places.

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nashashmi
This one is a tough problem. On one side, I am in support of Silicon Valley
pay being distributed across the entire US instead of being concentrated all
in one place.

On the other hand, I don't like economies in small localities being disrupted
because one person ends up getting a pay SO MUCH higher than majority of his
neighbors for from revenue that is not sourced from the employee's home town.

Maybe the market should let it play out as it does. But at the end of the day,
the tech bosses are the real winners when employees' pay get cut. And that is
a net negative for all.

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toomuchtodo
An argument for higher corporate and (progressive) personal income tax rates.

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counterpoint1
This is the most depressing, dystopian desire.

Taxes are necessary to fund shared infrastructure and services. They're not
supposed to overtly punish success or prevent people from earning a high
salary.

There's an argument that high earners can (and possibly should) pay a higher
share of taxes because they have the most ability to do so, but you seem to be
just advocating taxing away people's earnings out of a jealous desire to not
see anyone have more than you.

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tonyedgecombe
I wouldn't assume jealousy as a motive for this. Plenty of high earners call
for less income inequality.

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maztaim
As someone who lives near Pittsburgh with a reasonable salary and knows what
Silicon Valley/NYC salaries are usually, I am not that upset about it.

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znpy
worth adding (numbeo comparison): [https://www.numbeo.com/cost-of-
living/compare_cities.jsp?cou...](https://www.numbeo.com/cost-of-
living/compare_cities.jsp?country1=United+States&country2=United+States&city1=Pittsburgh%2C+PA&city2=San+Francisco%2C+CA&tracking=getDispatchComparison)

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unishark
I once negotiated with an employer that tried to use these exact kinds of
cost-of-living stats to compute an adjusted "matching" offer to an offer from
California. But it's a bad deal because those high california prices are
"paying" for very desirable benefits like nice weather and job opportunities.
These differences are not considered when "living" is treated like a commodity
where the only stat to compare is cost.

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jjeaff
Exactly. If I'm going to forgoe the great weather, I need some of that "excess
living expenses" to make up for it with tropical vacations and maybe a nicer
car or something.

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AtlasBarfed
So they are cutting payroll costs in a down economy. VMWare is just using this
excuse because they think their workers will tolerate it.

HR is a cold calculation, and people forget HR's primary (and second and
third) priority is to serve the company.

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unishark
You are suggesting HR is amoral but in fact they are actually evil.

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lazylizard
if the work can be done from anywhere in the country, how about doing it from
anywhere in the world?

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znpy
meh.

If your cost of life gets more than 18% cheaper by moving somewhere else, one
could seriously consider taking the hit.

And that one probably should. If anything, you'll get those money back in the
next job hopping session.

But now you're permanently remote and can use that as leverage in your next
job offer negotiations.

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Unknoob
But shouldn't the cost go down for the company as well? Now they no longer
need to use office space to accommodate you or provide you with a space to
eat/bathroom/take breaks. Rent in the valley is a nightmare and companies
could save a lot by not needing a physical space for the entire workforce.

