It depends on who you work for. If you work with us at BankSimple, you'd make the same as if you worked in our Brooklyn or SF offices. Normalizing salaries across our three locations is the only fair thing to do, regardless of the fact that we think talented developers are worth a premium.
If you value software developer's talents at $x per year, it shouldn't matter where they're located in the world. Perhaps you'd pay a slight premium for in-house workers vs telecommuters but only if that made sense for your business.
Whether they're in New Delhi, San Francisco, or some no-name town in middle america, if they've got the skills to develop your software and provide a similar value (compared to each other), paying them a standard rate is fair.
edit: I'll also note that "fair" isn't the standard for business these days, but it's interesting to see some companies attempting to do things differently.
Sounds nice ... but if it costs one developer $4000 a month just to take care of bills/rent/food and it costs the other $1000 then that is hardly fair. You are penalizing one developer based on the cost of living of the city they happen to be in.
In this world of airplanes and shipping services, there's no non-medical non-legal reason why you're stuck in any particular expensive city. Choosing to live in a big expensive city is an expense choice that you make, just like buying a premium brand.
You assume the person living in the expensive city doesn't benefit from doing so. Folks living in San Francisco choose to do so because they find the trade-off worthwhile. I choose to live in a relatively high cost-of-living area because I love the benefits it has.
I would say the same as you would get anywhere else +/-10%.
There have been a lot of threads recently around salary. I'm pretty sure it is entirely based on your willingness to negotiate to the best of your abilities. Yes, you need to be willing to step up to the plate and negotiate.
Thankfully we work in a very mobile and fluid industry. I know people who live in Oklahoma and work for well known startups that get paid a very competitive wage even for NYC standards. Location is becoming less of a factor in the war for talent.
When I was looking at moving to Portland about 18 months ago, companies there wanted me to take a 40+% cut in pay versus what I'm making in San Francisco. Granted, I only talked to a couple of companies, so maybe I just picked the wrong ones. Things might also have changed since then, thanks to the economy picking up and the higher competition for software engineers.
That may be part of the reason Portland is not keeping up with other tech centers. Taking a 40% pay cut just to work in Portland is kinda... dumb.
I mean, did these startups accept a 40% cut in their valuation or funding rounds because they are based in Portland? Do they pay 40% less to host with Amazon or Rackspace? It's just ridiculous and kind of insulting. I once had someone pull that on me re. a job in Florida. The dude was like "hey, there is no income tax here!" And I was like "hey, bmws cost the same all over the country." (Not that I drive a bmw, mind you. I drive a 129$/mo honda civic. It's just the principle of it all.)
I'm pretty sure Portland based companies take more than a 40% cut in valuation and funding rounds, vs. SF based companies. (not saying this is a good thing, just that it is observed)
There is a weird valley (which Portland is still kind of close to the "uphill" side of, which SF/NYC probably are the top of) where sufficiently remote or small places are cheaper for a lot of things (real estate, mass market locally produced goods like restaurants and cafes, probably generic developers or IT helpdesk people), but then more expensive for certain specialized skills (if you absolutely must have one of the world's top 100 experts in COBOL working for your remote office in North Dakota for 2 months, you're going to have to pay him more than to have him work from SF).
Cost of living in Portland is indeed way lower than the valley, and thus the salaries that your competition (as a developer looking for a job) will take is less than in the valley. This is why salaries are sometimes offered for less here in Portland than other West coast cities.
It is unfair to blame Portland (as a city) or the companies (who exist to make profit and thus get the best talent for the least amount reasonable). Instead, blame your talent competition who has your same skill set but will accept $10k less than you.
Or, better yet, make yourself worth that extra $10k by proving you are worth it.
It seems one of Portland's standing economic 'problems' is that it is apparently very nice out there.
Which is to say: wages do tend to be lower than you'd expect given the cost of living, due solely the number of skilled and educated workers who will accept comparatively lower wages, just so they can live in/around Portland.
As they say: Portland is where young people go to retire. And as long as that's true, I'd imagine Portland salaries will continue to lag 'expectations' and almost certainly trail the Valley.
Well, some of us grew up here, so then there's the issue of "do I trade moving away from everyone I know to earn more money?".
Also, I'm not sure that everyone who makes the salary trade-off knows that they're doing so. Is a developer earning $35k/year thinking "I could earn more at another company, or in the Bay Area, but I like it here" or do they think they're earning a fairly average wage?
I've been told by jobs both local (in ND, not that it matters) and remote that my wages were being determined by looking at the local average of people with my job title. It would be hard not to know that your salary is scaled to where you live.
Another issue besides roots in moving is that higher wages always come with higher costs of living. I own a house where I live which has a lower mortgage payment, by far, than a small apartment in SF. Granted that comes with downsides: no decent curry, bars that can't make a manhattan, etc