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.
Also this leads to income inequality. A person from a poor neighborhood/country gets paid less than someone in a wealthy area.
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.)
EDIT: But this implies that people in big cities can expect to see their pay go down to match the greater competitiveness of remote workers, not the other way around.
It really depends how fully remote a company goes. To the degree there's still some company advantage to anchor locations that some employees come into on a semi-regular basis, a company might still want to pay some premium for employees to live in that area. However, to the degree that a company were fully remote (and ignoring that some functions will still be physically close to customers), then high CoL vs. low CoL becomes purely an employee decision, it's hard to see the company paying those premiums. So, leaving aside real world messiness, the expectation would be that salaries head towards one (country-wide) value for a given set of skills.
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.
> In my experience it's always followed the Goldman Sachs bonus algorithm: Exactly $1 more than your walkaway price as an employee.
No (viable) company in the United States pays for the value of your labor, but for the profit it can have from your labor. They pay you the very minimum they can get away with, and no more, in a complex decision-making process that tries to extract the maximum profit from your labor. Food, benefits, time off etc, it's all part of the goal of maximizing profits from your work.
So considering the above, and ignoring the morals of doing so, no, your pay shouldn't stay the same because that doesn't maximize profits for the company.
After you move, the company will pay you less because you will still be gladly giving them the same work, if not better work, for a smaller salary due to the new and immense benefit of accepting you to work from any place you want.
Now, you can always refuse to accept these terms. Your options: remain in the bay area or go to your new house elsewhere without the job. Would you prefer any of these options to taking the pay cut?
That's what I thought!
PS: possibly one day we'll have such a strong labor market that people in Wyoming can charge top dollar to bay area companies because the companies won't be able to find anyone else to do that job for less. But I think we're not there yet.
No, because facebook is a a company not a charity. If they can pay less amount for equal work, they should. Similarly I would not pay more for a haircut if there is cheaper barber with equal value and quality.
facebook is a MAJOR player in society, and reflecting societies values is not a charitable act it's a responsibility.
Except they couldn't, FB is forced to pay equal salary.
>is not charitable act it's a responsibility
Depends on which perspective you're looking at, if I'm facebook or fb shareholder, I consider it act of irresponsibility.
never has. no company is forced to do this.
companies only get into trouble if they do this on a significant scale. There are tons of companies out there happily paying women less and still on the right side of the law.
This is where they are being forced do to it. The point is a company should do it if they could get away with it without trouble.
No, because you will find the same quality of people agreeing to work for less because their expenses are lower.
> Also this leads to income inequality. A person from a poor neighborhood/country gets paid less than someone in a wealthy area.
You have to look at net income after basic expenses. What good is it to earn more money but then also spend more for the same quality of life, because everything is more expensive?
Prices are set by supply and demand. If I need someone in San Francisco to do a certain kind of work, there's a limited pool of people and they aren't going to show up unless I pay a certain amount.
> Why pay people to live in expensive neighborhoods at all?
I don't care where people live, they care. They could save money by moving out to nowhere but then have a terrible commute. Again, that's assuming I need them onsite.
If it turns out that I don't need people onsite at all, I can hire from anywhere and the pool of people gets much larger. Since many of these people don't have huge expenses because they don't live in expensive cities, they'd do the same job for less. I save money, they earn money, it's win-win.
It really only comes down to how much value you put on people being onsite.
It's a perverse race to the bottom for the benefit of corporations at the expense of the worker and social income equality.
Labor is a market. It's supply and demand. All of that stuff you're talking about--the cost of eating out vs. cooking, rent in Silicon Valley vs. Wisconsin--doesn't need to be calculated. The market price for labor in a city is how much you need to offer to get enough qualified people to work for you in that city. People’s preferences, for eating out, for living here or there, are factored in to how much they’re willing to work for.
Now suppose you could move somewhere else and didn't have to pay insane prices just to live in a shithole like San Francisco, but you'd have to take a pay cut - why wouldn't you do it? You'd earn less on paper but you'd have a better life.
Exactly. "pay" is just a way to afford things that you value. If I can get those things, I'm happy; if not, I'm sad. "pay" is irrelevant unless compared to cost.
This makes sense to me because I agree to do the job fox x dollars, you shouldn't be able to turn around and make me do the same job for less without my agreement and a new contract.
But these are Facebook devs, surely they demand more knowing they have mobility. At that level signing "fuck you" contracts shouldn't make any sense.
Whether or not you or I would value it the same can be debated, but clearly it's worth something to some.
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.
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.
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.
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.
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.
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.
So they are not only saving on salaries, but on rents as well. Cheeky bastards.
What right has any human against a private company? Why even comment in this thread?
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.
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.
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.
1. To make more money
2. Because they can
Imagine the effect on society as a whole on that. And in several regions, those tech companies are not really welcome to open offices, because of those effects on the rest of society.
Does Facebook have a problem retaining in the Bay Area or anywhere else for that matter?
I’m still doing just fine.
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.
I think it's also the case that there are probably quite a few employers who don't necessarily try very hard to outbid the big companies in places like SV.
Anything less is theft
> 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.
You are not paid according to the value you provide to your employer. Despite our best efforts at magical thinking, your employer is interested in the least amount of money they have to spend to get XYZ business goals hit and it happens that your skills are useful to get make that happen. However, unless you are very exceptional in your area, you are a replaceable human resource as far as the org chart is concerned.
You're paid according to your ability to negotiate which is a function of many things ( biases, average market, internal business deadlines, perceived value to the business etc.). Sure, your unique ability to drive sales up 100% YoY is a nice skill but turns out someone else is willing to hit the same goals for 50k less than you are because they live in a cheaper area and don't need the extra cash to live a comfortable life. In that case, you may be valuable but you have no leverage in the negotiation anymore.
Since salaries and budgets are kept secret and employers will always offer the least amount they believe you'll accept first, you are entering the conversation severely handicapped already. We will certainly see suppression in wages over the next few years.
Does the value that a worker provide the company actually go down or not, if transitioning to working remotely? I don't think it's so clear-cut as to be an automatic and obvious no (that it doesn't go down). If management thinks it does, then they will only be proven right/wrong over time through the labor market and attribution or through financial results.
Of course, the opposite could well be true, and this how a market opportunity is created: managers who think the opposite, can put their money where their beliefs are, and hire/pay workers based on a different value-rubric, and if they're more correct in their assessment, then they might win out in the long-run.
If the situation was reversed, would you still say it’s fair because a worker gets paid for his/her value to the company?
For instance, let’s say you were working for a company in a rural area. Your pay is perfectly average for your position and others in your position at other companies get an equal salary.
Your company asks you to relocate to their office in central NYC, for the same job you’re doing now. Your cost of living doubles as a result. (Hypothetical amount) Should they increase your pay to account for this?
I sure do, but then why would the opposite be so wrong? I agree that you are paid for your value to the company, but we also can’t pretend like CoL is the same everywhere.
Edit: After posting this I remembered this was a big discussion in politics in my country recently. Dutch Call Centre’s were relocating to Spain during summer breaks and offering Dutch students jobs there (advertised using the fact that it’s Spain and you can party). As a result the companies would offer the students a lower wage since Spain’s minimum wage is a lot lower than the dutch one.
One should think of any employment as just a temporary situation. At the moment, your life situation causes you to make the risk/reward calculation that you're willing to let a company capture some of the value you provide in exchange for steady income. Your goal should be to save enough out of that steady income so that the risk/reward calculus shifts in favor of leaving the company, working for yourself, and capturing all of the value that you provide the world.
Even HN darlings famous for being remote-first like Gitlab adjust salary to cost of living.
If you want to paid very well, then churn out thousands of lines of rubbish code, be in the office for 70+ hours, attend their meetings, pay rapt attention to their PowerPoints and laugh at their jokes. Bingo!
To help yoy grok why what FB is doing makes sense, view this from the reverse situation: Let’s say you live in a low cost area (e.g. AK) and then move to the Bay Area, working for the same company.
In that case, with your COL doubling, would you expect a pay raise? Of course you would! Because your net pay would reduce significantly otherwise.
So, the reverse should true too.
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.
"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.
This argument doesn't make sense in the context of remote work where the location of the individual has no bearing on the output capacity of the individual.
How does Facebook decide who deserves what salary? I thought it was entirely based on skill but clearly it is not.