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[dupe] Facebook employees may face pay cut if they move to cheaper areas to remote work (marketwatch.com)
44 points by pseudolus 15 days ago | hide | past | web | favorite | 113 comments




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.


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.


> 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.)


Local workers don't compete with local workers in other locales, but remote workers do.

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.


>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.


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


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.


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


My communication with the guys sitting beside me has gone down but my communication with those in a different building has gone up.


The thing is, they’re not paying less for remote workers. They are paying more for local workers living at high cost areas


This is just marketing spin, I’d like to think that the people in this discussion are talking about the merits of a pay differential, and the way you phrase it is not really the point under discussion here.


> It's odd to see Valley types, in light of the FB WFH news, debating whether comp should follow a 'cost plus' or 'fraction of value added' model.

> In my experience it's always followed the Goldman Sachs bonus algorithm: Exactly $1 more than your walkaway price as an employee.

https://twitter.com/antoniogm/status/1263586217183965184?s=2...


A salary is made up of a bunch of things, and one of those things is an allowance for living and working in an expensive location, which is not tied to performance or role. If the allowance is for a specific circumstance, it's reasonable that it changes if the circumstance changes. It might be called a Cost-of-living adjustment which is discretionary income.


By that logic, the adjustment should not be a percentage of gross pay, but a fixed dollar amount based on difference in average cost of living.


Maybe it should stay the same from a moral perspective, but that's not how the system currently works in the United States - and, perhaps, most of the world.

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.


Salary is not the only payment. People accept those cuts, this means that those "ow paying areas" have something else to offer. Also, usually remote opportinies still pay more than local is most places, with more remote, the competition for talent in those areas, and both local and remote opportunities will pay more. Value also takes in consideration how easy you can get something, something easy to get is low value, this applies to everything including labor.


> shouldn't the pay remain the same

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.


On that basis, a company could pay women less since it knows they are less likely to demand an equal salary. After all facebook is not a charity.

facebook is a MAJOR player in society, and reflecting societies values is not a charitable act it's a responsibility.


It's hard to argue that "remote devs" are a protected group.


>a company could pay women less since it knows they are less likely to demand an equal salary

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.


> Except they couldn't, FB is forced to pay equal salary.

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.


>companies only get into trouble if they do this on a significant scale

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.


s/should/can/. There are reasons in this world to do things that do not maximize immediate net profits.


It's just supply and demand. The willingness of a worker to supply labor at a certain price (i.e. salary) is, for normal human beings, going to vary with his cost of living.


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

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?


What good is it for the company to pay out more money ever? Why pay people to live in expensive neighborhoods at all?


> What good is it for the company to pay out more money ever?

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.


Depends on the reference point. Maybe less inequality within a country if it’s in line with other salaries. Just not parity with other countries, but as long as PPP is maintained it’s not bad.


Of course. It also costs less to live there.


it costs less if I decide to cook rather than do take out, should I inform my employer I'm saving more money so they cut my salary.

It's a perverse race to the bottom for the benefit of corporations at the expense of the worker and social income equality.


Your mental model is all wrong. There's no moral calculus being used to determine how much you earn. If you want to think like that, then you'd have a hard time justifying differences in pay for different lines of work, especially since they don't correlate with how much or how hard you work. You don't make more than the guy laying tile because you work harder than him. It's because there's a lot more people who can do what he does than what you do.

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.


All employers always want to pay as little as possible. You get paid as much as you do because your labor in your area costs that much. Companies are competing for your labor, if they paid you less, you'd be way more likely to take another job elsewhere.

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.


> 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.


But Also every company has a clause that prevents your pay being cut no?


No. If you relocated out of the SF bay area you would lose the adjustment. This has been true as long as I can remember. I remember seeing old email threads with people complaining about it.


No. In fact, not a single company I've worked for has such a clause.


I've had that in quite a few companies. Their only recourse is to fire you if you unperformed, but reducing your pay is not allowed in the contract.

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.


I think that's a very uncommon structure, but regardless it's a voluntary pay cut in this case. Facebook isn't saying anyone has to move, and they won't get their pay cut if they don't.


I think you're coming from a place where you're receiving contracts for employment. My employer's contract is "fuck you, show up to work and we can fire you and change the game whenever we please, also, fuck you.". I think that's the employment status for most people, at least here in the United States.


This makes sense for the average worker.

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.


Sure it does; they value the "Facebook" entry on their resume more than the risk of being underpaid, pay change, fired at will, or any of the other risks.

Whether or not you or I would value it the same can be debated, but clearly it's worth something to some.


I guess they cannot cut your pay if you keep the contract conditions, if you willingly move to another area... why not?


If you’re getting a location based pay adjustment you’re either working for a company that doesn’t give a shit about you or you aren’t negotiating hard enough. Both of these cases are fixable.


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.


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.


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.


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.


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.


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.


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.


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.


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


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.


"should". Why? Their job is to be as profitable as possible.


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


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.


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.


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.


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.


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

1. To make more money 2. Because they can


Aside of the monetary benefits: Social cohesion. With a senior developer silicon valley payment, you would be payed roughly the equivalent of middle to upper management at large companies in other industrial countries. Likely several times the payment of doctors, teachers, etc... And you may guess how it is in other countries with even lower costs of living.

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.


> 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.

Does Facebook have a problem retaining in the Bay Area or anywhere else for that matter?


The average FB employee stays 2.6 years, so.. maybe? If all they are doing is training an AI on some cartoon avatars, they'll be fine. I imagine it would hurt their VR attempts at VR and games, where AAA projects generally last more than 3 years.


Market. Say, now they're not limite to hire only people that want to live in the Bay Area but the whole world.


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.


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.


> 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.


Complete speculation, but we may be looking at comments from people who genuinely don't understand (or believe) that you can buy a typical Silicon Valley style house (1200 sq ft on zero acres) in most of the country for 150k to 250k. The standard of living on the same money is completely different.


Cost of living is not the factor here, cost of labor is as others have mentioned. If not, for example London tech salaries would have been comparable to NYC/SF/SEA if you compare cost of living.


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.


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?


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


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?


One argument is that, especially for large companies like Facebook, if you exclude the tech hubs, it's hard to hire enough people with the skills they need.

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.


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


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?


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


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


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.


You still need a fixed mailing address for many things, so I assume they'd use that


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


It's fraud.


What if that actually ends you up with more?


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.


If the employee comes out ahead then they might be fooled into thinking that Facebook is not picking their pocket.


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


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


One funny thing about entitlement is that it only matters if those who hold the power decides it matters.

> 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.


I think the problem comes down to having different definitions of value. Devs think it's 100% based on their code output or their communication with others or things like that which are quantifiable outputs that can be achieved relatively equally and remotely. Management has a different rubric, and yes maybe geographic proximity is on that rubric (for reasons unknown or no reason at all).

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.


I want to agree but this problem is kind of weird.

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.


Your pay is a function of supply and demand here, not value provided. Working for a company is an opt-in choice, so it's not theft. If you want a better agreement go work somewhere else. And when enough people do that, pay will go up to compete for those people. But if a company can get away with paying less, they will. And arguably, they have a fiduciary responsibility to do so.


Why are you okay with working for a company to begin with? Presumably, whatever they pay you (perhaps your current high salary at the expensive place, perhaps even maintaining your high salary after you move to a cheaper place) is still less than the value they extract from you (most employees would like to think they "provide value").

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.


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.


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


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.


Yet another example of how clueless managements are. They are incapable of actually assessing value of the actual work performed. So they use proxy metrics like LoC, hours worked, in-person presence in the office.

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!


This sounds facetious.

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.


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.


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


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


i mean that was wildly expected, right?


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


+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.


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.


It does appear that way. Perhaps it reflects the increasing disentangling of the work being done from where it is being done. That's increasingly the case for knowledge work. If a company needs drivers, chefs, receptionists at a given location they will have to pay the going rate at that location. The people have to be able to get to the work place. That means living within a certain radius which impacts on the cost of living. If the work happens at a cheaper cost centre generally the labour costs will be cheaper. On a different note I wonder what this could mean for the future. When I occasionally look at the kind of bids for free lance work on various platforms I get the sense that there are plenty of people that would happily do my job for a fraction of the remuneration. Things might become more competitive than they have been. Perhaps I'm wrong.


IMO it's not that much just Facebook, but the _market_ and now the market is suddenly bigger (all the good talent that didn't want to move to SF).


...... 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.


> 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.


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.


>> 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

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.


Only applicable if the worker can find other comparable work in a local physical location. If everything is remote, location has no real meaning.


How is that the company's problem?




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