The pay difference is nothing new, global companies with offices in different countries already pay employees different salary based on where they live. This is not caused by working remote.
Why do you think so many software companies have offices in india? Because it allows them to pay less based on cost of living.
Yep this. Let's equalise SF salaries with Europe and India first. What's that? You don't want to? Yeah I didn't think so.
I guess this is what Marx was thinking about when he wanted the workers of the world to unite. Without unity it's super easy for capital to flow to the cheapest labour possible. So far software engineers in the U.S didn't really feel it, but things can change.
All the turmoil we are starting to see in the first world countries is due to this. With the rise in productivity in third world countries the wages will keep moving towards a median.
"When it gets down to it — talking trade balances here — once we've brain-drained all our technology into other countries, once things have evened out, they're making cars in Bolivia and microwave ovens in Tadzhikistan and selling them here — once our edge in natural resources has been made irrelevant by giant Hong Kong ships and dirigibles that can ship North Dakota all the way to New Zealand for a nickel — once the Invisible Hand has taken away all those historical inequities and smeared them out into a broad global layer of what a Pakistani brickmaker would consider to be prosperity — y'know what? There's only four things we do better than anyone else:
It's nothing new, but it doesn't make the sense it once did.
Those adjusted costs were based on the local job market. They needed to be competitive with the other options you might have had. Once you are working remote, you are not likely comparing "I can go down the street and work THERE for x" any more. You are instead "I can go online and work THERE instead for Y". Your physical location is not a variable in that comparison except for companies that hire based on some data security or legal requirement that work be done within the borders of some certain country.
Yes. But economics is different for local and remote work:
Like it is natural to pay the same price for something we both order from China, and in the same time it is also completely normal that we will pay different prices for potatoes at our local market.
Employment is a social contract, looking for a compromise between two positions:
* Employers want to essentially acquire a good (productive employee) for the best quality / price ratio. If a trained monkey could do the job for peanuts, employers would be happy.
* Employees, and the society made up of employees, want stability, employment rights etc. as salary work is a backbone of societal stability.
Employers will happily pay the lowest amount of salary that will convince someone to work for them - COL being a key consideration. Employees will negotiate on the basis of the value they bring, but in principle, there is no moral obligation for employers to pay a wage that's fair, based on the value of the employee work, perhaps above ~subsistence levels.
How it works out, we'll see. Perhaps societies agree that strong-arming employers to pay equal salaries, regardless of location, will work - that's how unions, weekends and paid holidays came to be in the developed world (sorry Americans). But neither is a fundamental human right, and rather a societal contract, negotiated between labour takes and makers.
For a different take, should it also be unfair for someone qualified, living in a lower cost-of-living location, to offer their employment to the same company for less? This seems like normal salary negotiation to me.
> neither is a fundamental human right, and rather a societal contract
This seems like a purely semantic distinction to me. Unless you're religious and believe that humans are "endowed by their Creator with certain unalienable rights" then everything you're claiming as a 'right' is just some generally-agreed social principle that your ancestors fought hard to establish.
There's a secular right and wrong too. It's not that murder is OK, with a fee of life sentence. It is wrong and should never be done, and backed up by legal penalties.
Not really true, as many people support murder by the state in retaliation for heinous crimes including other murders. Two wrongs do not inherently make a right, and our belief that murder is bad is very much a holdover from our religious roots.
right, but what underpins the usual rules of employment is based on what the society wants. Like democracy - it is literally a contract, written in laws. And yet it is also a social contract.
the usual rules of employment is based on what the society wants.
Until "the board" steps in and says 'no', right? That's been my experience. Proclamations and cheerleading about "we're a meritocracy, we act democratically in this company".
Times get tough (like a Global pandemic coming along), employees ask firm questions like "will the executives taking a pay cut like the rest of us?"
Response: "the board said no"
"We're all in this together"; "The board won't approve it."
"Burnout is real! Take steps to monitor it";"The board won't approve a 4 day work week"
etc. I've been in some VERY heated and passionately argued meetings in the last month as a leader, hearing my cohort leaders giving voice and in some cases giving voice myself to concerns and frustrations coming from a workforce that is growing pretty pessimistic watching how much of the internal corporate cheerleading and messaging in practice is at odds with corporate rhetoric that have manifested during our extended org-wide WFH.
So as I see it, the society leaves most of an employment contract up to the firm-employee combo (where the firm has the upper hand).
But some fundamental things are not up to the company, at least by law: can't discriminate by gender, race, age, veteran status, marital status, having children and so on. In Europe, like it or not, you must give your employees paid holiday leave, sick leave and time off to look after children. If firing people, you must give them proper notice, and cannot fire people for a long list of reasons considered illegal. If doing group redundancies, you must follow proper procedure, aiming to maximise the fairness of the approach.
My favorite recent observation along these lines was our CEO encouraging us to take a week off recently "to avoid burnout". But our PTO grants haven't changed, and so most folks don't have the time to take off.
Of course, this is the same CEO who owns three separate properties, and flew between them in his private jet, to keep his own stress levels down during Covid-19.
> there is no moral obligation for employers to pay a wage that's fair, based on the value of the employee work, perhaps above ~subsistence levels.
is there moral obligation to do your job well instead of let's say watching youtube and doing bare minimum not to get fired?
It's funny how people expect moral behaviour from other people but not from companies made of these people. Somehow it's fine for companies to be jerks.
Look at many of the products we make together. Why would we hide behind laws that protect bad practices and think those same companies take a moral high ground on this issue. It is, and always will be, due in part to fiduciary responsibility to shareholders, about the money.
> It's funny how people expect moral behaviour from other people
Do we though? We expect people to not break the rules, e.g murder or steal. We don't expect people to stop eating meat, polluting the earth, or generally to stop being extremely selfish. If we expected everyone to be moral you and I wouldn't be spending money on vacations and buying computer games but on trying to save poor kids in Africa and Bangladesh.
Over the years, I realized that everyone is selfish and will literally throw you under a bus for the right amount of money, or some other acceptable incentive. Laws keep people in line, except for the few who break them and get away with it.
Maybe I'm hanging around the wrong people (I often wonder where all the "right" ones are), but that's how it is. And if I don't play the same game, I'll keep getting fucked until I die. It's really depressing.
I think you might be hanging around the wrong people. I’ve rarely met people with the ethics (or lack) you describe and certainly haven’t stayed in their presence if i can help it.
As for good people, there are many. There are thousands who give at least 10% of their income to the most cost-effective charity they can find - https://www.givingwhatwecan.org/
There are thousands of people working very hard on the most effective solutions to the world's most important problems - https://www.effectivealtruism.org/
There is plenty of hope. Find better people, work to improve yourself, the world, and others.
This cynical outlook it's definitely helpful, but I believe the truth is more gray. It's quite likely and understandable that my friends will throw me under the bus if they see their livelihood in danger, but so far it hasn't been the case for measly higher pay. And yet I have depended on the kindness of strangers who had nothing to gain by helping me enough times to acknowledge that it's not selfishness what engages human behavior.
As always it kinda depends on the framing, you can even say that it's on my best interest to act for the common good, so even altruism is selfish, but then you'll have a useless definition of altruism.
“Or some other acceptable incentive.” Ok sure, that leaves the opening wide for any possibility including “throw your friend under the bus or I will literally shoot you in the head,” “this 1 billion will be distributed to the needy if and only if you block your friend from receiving a promotion” or even more realistically, “friend 1 gets a promotion or friend 2 gets a promotion.”
At any rate, for smaller things, my experience is that most folks will not throw you under the bus. At high stakes, it really just depends on whether the relationship with you (and folks you might complain to) and/or relationship to whatever intrinsic value system matters more or less than the stakes.
We should nudge and pressure people to be better (whether using some 'dark arts' or with kindness).
Once you learn about the horrors of the animal abuse happening thanks to the money with which you buy meat, I think it's the right thing to stop. And similarly, to encourage others to decrease their meat consumption by letting them know that by buying meat, they are very likely going against their values (just ask them if they would pay to torture a dog, for example).
Instilling better norms in a society is hard work, but it's a good thing. Thanks to the efforts of our predecessors, we now look down on beating one's wife, for example. Let's join together, and make it the norm to give 10% of our income to the most cost-effective charities we can find (see https://www.givingwhatwecan.org/ )
> And similarly, to encourage others to decrease their meat consumption by letting them know that by buying meat, they are very likely going against their values
Well, people know. Maybe they don't KNOW know, in the sense of actually visiting a slaughter house and smelling the blood, but I'm sure most people know about animal shipments, tiny cages, and that gassing or slashing animals throats isn't a picnic.
Personally I donate money to an animal protection program (probably don't donate enough). Conversations I have with people in my life about this are overwhelmingly futile and people become quite hostile when you talk to them about this.
It's a challenge talking about this topic. It's very easy to come off as "I'm better than you" or "you are a bad person". But these conversations can be productive and non-offensive.
I encourage people to see a wide continuum between eating 100% meat and eating 0% animal products. I express that I understand the challenges in decreasing one's meat consumption. I point out that it's not all or nothing - you can be "mostly vegan" (while still consuming animal products sometimes).
It's best to have conversations like this when the person is asking, not because you "caught" them eating an animal product.
Because of how grim the reality is for animals raised for food, most people are reluctant to be exposed to what it means. They will hope that (and not look for evidence against their belief that) the meat they buy comes from a better place (it's worth pointing out that in the US about 99% of meat comes from factory farms).
As I said - people's values are likely aligned. Polls consistently show that people do not approve of animal abuse.
The final argument that made me drastically decrease my meat consumption was the empirical fact that individual choices matter:while supermarkets are not 100% responsive (buying 1 item less decreases their next order by 1 item), they are responsive to demand. And if they buy in batches (which they likely do), you have a chance of triggering a "next-larger" batch order. On average it all works out to an (economic) elasticity of less than 1, but a far cry from 0 (depends on type of meat, but rough figure of 0.5 is a sensible underestimate).
Did you actually manage to convince anyone to stop eating meat, who wasn't already having major doubts about what he was doing to begin with? If so how?
I have had many friends share with me that they have decreased their meat consumption.
I am not under the illusion that I was the person who caused that change. Change rarely works this way. Our decisions to do something (especially this drastic) are composed of numerous influences.
Part of change is about what people expect to be the new normal. If all your friends are ok with homosexual marriages, you'll likely change your point of view soon enough anyway. If many of your friends at least mention that they are concerned about factory farm abuses of animals, you might one day decide to eat one less hamburger.
Change is much easier when younger; I changed during college years. I'm now 35 and I'm sure to have nudged at least some of my friends to eat less meat in the last decade. Much of it probably was just my consistency. If your friend tries a fad diet, you can ignore it. If their diet lasts 5 years, you'll at least want to learn more about why and how.
It's an important issue to change others' opinions on. A great book about this subject is "Change of Heart: What Psychology Can Teach Us About Spreading Social Change" by Nick Cooney
We do expect each other to be reasonably moral. It’s understood though that everyone has limits and is fundamentally flawed, so at the end of the day a few things have to be written off. Exactly how many things you write off, interestingly, contributes to your own moral standing.
I don't think we expect everyone to be reasonably moral, at least I don't live with that expectation - that's just setting yourself up for disappointment.
Yes, most people don't murder or rape, but we're still quite a selfish and survivalist creature. Although we know perfectly well the amount of suffering the meat industry causes, most of us are fine with consuming meat and dairy, as long as we don't need to see the images of how the meat gets to our plate. Mostly because it tastes good; red meat is actually unhealthy.
That's just one tiny example that leads me to think we're not reasonably moral.
I'm not saying we can't be taught morals, but we have a long way to go till we can say what's happening is "reasonable".
Food science findings (which tend to be unreliable) aside, eating food is something that’s hard to fault someone else for doing. The fact that most people eat meat alone is something that makes it more of a reasonable thing to do, even more so that we typically don’t find out about the conditions of cows, chickens, etc. until we are already mostly grown and hooked on the stuff.
Morality is a complicated thing to define[citation needed] but I would posit we actually generally have a high moral standard for each other in the west. We expect each other to not lie pathologically, push others away when they take advantage of those around them (e.g. scammers, con artists) enforce the rules of monogamous relationships (for the vast majority), return lost belongings to each other, encourage food safety, and so on.
And you can find secular explanations for all of those, but most people are just taught that those are the right things and stick to it. Sure, some of the integrity of those areas are eroding over time, but generally speaking society is still held together with morals.
Its not eating food that I have a problem with. Its choosing steaks, pork and beef when there is a huge amount of alternatives. The fact we are brought up like that and are hooked does not make it any better or morally sound. The fact that everyone is doing it makes it Ok in your eyes? Please explain. Everyone was a nazi in Germany at a certain point.
It doesn’t make it OK, it just makes it bad and reasonable. If I’m in Nazi Germany and all my friends and family are Nazis, and my neighbor too, I’m going to think less of my neighbor but not exactly hold it against him as much as if there were 100 Nazis in the country and he was one. There’s reasons people have at that point for being Nazi, even though the thing is ultimately terrible. Group dynamics, which are more or less baked into our (epi)genetics, for one.
In America we pretty much all get a pass for buying clothes, for instance, which has some considerable moral strings attached to it. We could make our own, but that’s just not a reasonable way to live life here. You would have no company if that was the way you chose to spend your time, so it would be a sad existence, and as humans we are wired to want to behave like those around us.
Well you kinda solidify my argument that we don't expect people to be moral, at least not 100% or not even 50%. We expect them not to break society's rules, and whatever capitalism allows - they can do, with no social stigma. We give each other a free pass because we know change is hard (is that the functioning of a society striving to be moral?)
Now whatever capitalism allows - meat, unbridled consumerism, extreme selfishness etc, these are things with severe side effects. In the case of buying clothes the suffering is a bit more subtle (I suppose you refer to worker's conditions in poor countries), and since it's paying for someone's job somewhere you could argue it's in the grey area.
But the meat industry isn't in the grey area, it couldn't be more black than it is.
I wouldn’t say it couldn’t be a grey area. For many, it’s easier to get fresh meat than it is to get fresh vegetables, such as if you’re a farmer in a food desert but you have livestock, or even if you’re just living in a place like Alaska where a lot does not grow. There are also dietary restrictions leading some people to need a higher than average or even entirely carnivorous diet.
Bottom line is that while there may be morality inflation, i.e. when you judge the modern lifestyle on an absolute scale, it looks bad, that there is still a range of acceptability, and if you venture outside of it, that’s no bueno. That doesn’t mean we don’t expect people to be moral (100% would be “perfect”).
> is there moral obligation to do your job well instead of let's say watching youtube and doing bare minimum not to get fired?
No
You can choose to do well to avoid being fired.
You can choose to do well to chase a promotion.
You can choose to do well because the work interests you.
But you are not morally obligated to do anything, and if your employer is not very good at evaluating your work, then — like a man who buys a gym membership and never goes — that's on them.
I think an extremely large percentage of America would disagree with you, though. The puritan work ethic is absolutely the backbone of society for a lot of americans.
Only for the employee, though, never for the employer. When the employee doesn't work he's a slacking <epithet>, when the employer overworks the employees or pays poorly it's "go find another job". It's religion for the masses, capitalism for the rich.
Both you and GP seem to be talking from an amoral perspective. To many people there is certainly a moral obligation to put in an honest effort and pay fair wages.
I certainly don't think of my approach as amoral. Rather, I think it's not immoral to negotiate down a salary based on fair yardstick (COL). Annoying, perhaps, but not immoral.
It's immoral to exploit your employees, lie to them, not keep to a contract, deny them the growth opportunities they were lead to believe they have etc. But to negotiate a lower pay, that's not immoral. As an employee, take it or leave it.
To be clear, I'd love to get a SF salary and live in an Alpine valley in Italy or France. Maybe the world will come to that arrangement. But if not, I wouldn't call it immoral.
It's not based on COL, though, it's based on what your company perceives as your peers in the new area. As pointed out in other threads, working in London will net you about 1/3 of the salary as SF, even though the COL is nearly the same.
>To many people there is certainly a moral obligation to put in an honest effort
how can you have a moral obligation to an entity that is itself amoral (a corporation)?
>and pay fair wages
i'm not gonna hedge this at all: there are no corporations that pay fair wages out of a moral obligation. if there were no minimum wage they would be the lowest that the market would bare (and the market is also amoral).
> is there moral obligation to do your job well instead of let's say watching youtube and doing bare minimum not to get fired?
of course not. I do that all the time and don't think I'm doing something imoral. it's up to the employer to figure out that I could do more tickets. I'm not stupid to say: hey, I finished my tickets, give me more work :))
> It's funny how people expect moral behaviour from other people but not from companies made of these people. Somehow it's fine for companies to be jerks.
We expect different behavior from a beehive than we expect from the bees, don't we?
I’ve never thought about it before, so no, in the absence of your prompt I would have expected a beehive to just be N bees being bees.
Obviously you wouldn’t have suggested this if my expectation was correct, but it would’ve been my guess if I didn’t use meta-reasoning about why you might be giving that example.
You're conflating two distinct concepts: 1) what you're obligated to agree to; 2) what you're obligated to do once we've established what you've agreed to.
You're not morally obligated to agree to literally anything, but you are morally obligated to uphold your end of an agreement.
On the one hand lying about your location to an employer seems sketchy. On the other hand COL adjusted pay seems pretty much equally sketchy.
Employers trying to adjust salaries based upon COL really isn't much different to printer manufacturers software disabling printers and selling them at a cheaper price. It's an attempt at price differentiation - in the opposite direction.
I'm objecting to the critique of COL-adjustments on moral grounds: that it is wrong, according to some metric, to pay people differently, based on where they work remotely from. I don't think it is wrong. Maybe impractical, and maybe we agree it's a nuisance, and as workers can force the employers to reject that. But fundamentally fits in with what employment is.
When employers ask employees where they live, they may already know the answer and ask only to indirectly answer others questions.
I would think what is documented and certified when filing taxes will be important, perhaps retroactively. Jobs and new software tools may pop up to help companies better understand their geographically distributed workforce from an accounting perspective. Employees with legal challenges (past or present) have the potential to reduce productivity.
I think the "requirement" part is a sticking point. If I chose to move from my small house in WV to a condo in Pitt, i would not expect my employer to pay me more because of my choice. If they required me to move to Pitt or I lose my job, I would expect some compensation.
Likewise, if I take a job and get X salary for that job, then move to a cheaper part of town I wouldn't expect to take a pay cut.
I'm not sure that's internally consistent from a logical perspective. Forget the require bit. Say it's an option.
You're employed with a salary of $X at location Y.
Your employer wants you to move to location Z with higher cost-of-living. You can either stay at location Y or move to location Z. You feel it's right that your employer increase your salary because of the higher cost of living if you move to Z.
The company is asking you to make a concession: do the same work, but in a different location.
When you ask to move to a lower-cost area, aren't you asking for the same concession? Why is that concession expected to be gratuitous vs the same concession from the company which is expected to be compensated?
If an employer asks an employee to move to a higher cost-of-living area then they're asking the employee to take on extra expense for the benefit of the employer. It's only reasonable that the employer would offer some form of compensation if they want the employee to grant that request.
If an remote-work employee wants to move to a lower cost-of-living area it should make no difference to the employer. They're still getting the same work as before, at the same cost. If the work output was worth that much before then it's still worth that much when performed from a different location.
If an employee chooses to move to a more expensive location, on their own initiative, then that is more like the second scenario than the first, and there is no reason to expect the employer to offer higher compensation to offset the cost-of-living in the new location when there is no particular benefit to the company from the move.
This is all true, but it's based on the assumption that one already works for a company. I don't know if the same is true for new hires.
New hires generally have their existing compensation as part of their negotiation. So if I'm already living in SF and am negotiating with a new employer for salary, my current high CoL salary gives me leverage to expect higher pay regardless if I'm working remotely. Remote work allows for flexibility but it doesn't erase CoL concerns.
The way I see it, if the company wants you to do something you would not do if not for their asking (i.e. moving) it makes sense to ask for compensation, and the compensation should be commensurate to how onerous what they want is. I would expect a relocation bonus even if moving from a high cost of living area to a low cost of living area, if moving was requested by the company.
On the other hand, if I want to do something because it is convenient for me but does not affect my work in any way (i.e. change where I work from) I would not expect my compensation to change.
In other fields, these kinds of paradoxes often indicate that a system is broken, or is not applicable.
Perhaps free markets are not really the right system to apply when managing human resources, and especially to distributing the fruits of our collective efforts.
I think the only way that balance changes is within a worker cooperative. It’s odd to me that there aren’t more tech based cooperatives as the entry cost seems so much lower than many other businesses. But I also suppose the opportunity costs may also be higher.
> Employers want to essentially acquire a good (productive employee) for the best quality / price ratio. If a trained monkey could do the job for peanuts, employers would be happy.
This is true, but there's more to it. Employers typically make a product and they still need to sell it to somebody who is not a poor monkey. Employers also need a safe social environment so that their offices do not get burn by the angry masses, and if the factory takes fire they expect the firefighters to show up. Thus, employers have a real interest in living in a safe world full of happy, well-paid people.
Of course they do. That's the whole point of expelling poor people from where they live. Who doesn't seem to know that are the employees, who prefer to trample on each other instead of (gasp!) force a collective negotiation.
Your strategies are those that optimize for jobs a monkey to do: "I need someone to flip this burger or turn this wrench". Paying for cheap labor, you get cheap results. I've seen this time and again across many different industries.
When it comes to knowledge / skill based work, the high end of the spectrum is a multiple of value over the low end. Sometimes that's 1.5x, sometimes it's 10x, sometimes it's 100+x.
It doesn't matter how many scientists you hired if you didn't hire the first one (or one of the first ones) to create a working and marketable COVID vaccine, for example. It doesn't matter how many engineers you hired at 50k/year if you didn't hire the guy for 2 million / year that finally got self-driving cars working.
At a less extreme scale, it doesn't matter how many junior devs you hire to do the work if one senior dev could have done it faster and with less headaches, which happens all the time in tech. On a daily basis, in my experience at multiple tech jobs.
And let's also remember that market salaries selects for talent before the talent is even there; today's smartest students that want a paycheck go for tech careers (and some other fields). If tech stops paying well, those people go into other fields, and you don't even get the option to hire that 10xer because they don't exist. If you stop paying well but your competitors continue to pay top dollar, your competitors will leave you in the dust.
Supporting remote work can come at a cost to an employer so it does make some sense to me to offer less money in those cases and inversely, more money if you move to their town to work there. Other than that equal pay is more fair indeed. I think things have mostly gotten crazy along with some housing markets. Perhaps this will slowly disperse the extreme concentrations of wealth throughout countries with employers opening up more offices at cheaper locations. Or they will have to prove that those extreme concentrations result in equally large productivity/quality improvements.
I'm a bit surprised about the assumption that remote work is more expensive than on site work for the company. I guess it could depend on the location of the company's office.
It's used by business to pretend to have an office in city X (expensive) while actually working in city Y (or in a completely different country). It can also be used to provide an address coming from a fashionable/trendy part of the city.
There are similar services that offer re-mailing services. Basically you pay a fee and have a fund for postages/stamps. Whenever mail arrives it gets re-packaged and re-mailed to your real address.
It's basically proxying for real mail.
I used reship.com multiple times to appear to be located in Oregon and overcome "we don't ship to your location" problems.
Tell'em it's fine but you'd like to negotiate based on net pay after taxes. I don't have all these fancy things: kids, deductible mortgage interest, deductible medical costs and I just want to be even with those losing a less percent of their income to tax.
You can negotiate on any basis that you want; I’ll just turn that back into whatever it means to me and see if the deal makes sense. If it does, we have a deal.
Not even the reason that I'm playing a long game and want to play a tiny part in steering society at large away from such hiring practices? If enough people decline offers, giving this reason, it's bound to make an impact eventually.
Salaries are based on market rates not "cost of living". If you want your employer to pay a higher salary either move to another city where they would pay more or find another company. There's not much else you can do that would convince your company otherwise.
Those are called Commercial Mail Acceptance Facilities and there is a database of them available. DMVs use the database to catch people trying to use a rented mailbox as their home address. An employer can catch this if they want to. At my last employer I used a UPS Store address and HR never caught on but since it was in the same town I lived in, there were no tax issues. When I tried to open an HSA, my address was flagged because an HSA is considered a bank account and they must have a physical address for that. I opened an FSA instead, which didn't flag. So it really depends on how the company's HR department operates and as others have mentioned, if you're in a different tax area, there could be legal complications if you get caught.
I suspect most of the people effectively going "just commit tax fraud" are mostly venting as opposed to saying something they'd seriously do. The fraud aside, I think it would be practically very hard to maintain the opsec needed to avoid clueing in your co-workers as to where you actually live--especially if it's in a different climate/time zone/etc.
Right now, we are at an unusual point in time where workforces are going from geographically consolidated to dispersed. Thus, we think of the "standard" salary as what they pay in San Francisco, and ask for everyone to be paid that.
But the advantage of a remote workforce, from the employer's point of view, is 1) getting the brilliant people who can't leave their hometown to work for you, and 2) not having to pay San Francisco salaries. If you're an incredibly gifted talent, you'll fall into category 1 and they will pay you the San Francisco pay regardless of your location (or you can find an employer who will). But if your contribution is shipping high quality, but fundamentally non-novel, Node apps or similar, you'll find that the "standard" salary is that which is paid in Timbuktu, and if you're sitting in San Francisco and want more, you'll have to provide your employer with a compelling reason, or they'll just opt to hire a second person in Timbuktu instead.
With remote work employers in SF aren't any more competing with talent pool of SF, but national or global pool. Supply and demand in action. Supply has increased, demand remain stable or lower. Means prices(wages) are going to go down.
Ofc, if they want people to come and sit in their SF office they have to pay more. On other hand if they can get replacement for their ex-local resource for remote for cheaper they might do that.
Sure, I just think the conversation right now is, "Why would you pay me less if I move from SF to Alabama, I'm the same guy doing the same work."
The conversation in the future will be "Why would I hire you in SF and pay you three times what I'm paying in Alabama? You're equivalent guys doing the same work."
The concept of the "standard" will shift from the highest-paid locale to the lowest, and "Cost of Living Adjustment" will be something that employees in San Francisco plead for, not something that employees in Libya complain about.
The only way out of this will be to rebut the assertion "you're doing the same work," i.e. to have skills that are globally unique. Not that you have to be Jeff Dean to keep a job, but that you have to be a whole lot more capable than your peers, the same way that a product is not assumed to be manufactured in America unless there is a compelling reason to.
This is why there needs to be teeth to the laws that limit pay inequality within a firm ; if the CEO of the firm can only make X amount the median or mean (whichever is lower) salary of any person who does work for a firm (including contractors!) then we can hopefully push back on this cost of living BS.
Basically, the work is worth something and if we do the work, we should be paid a reasonable amount, regardless of where we sat when we did the work.
The point is that within the firm, there can't be that much disparity in pay - if the CEO wants to make several million dollars a year, he needs to justify that by paying his employees an appropriate amount.
If we're talking knowledge work, the work product is the work product, and it doesn't matter where it's generated - the person in Libya has as much right to earn $200k as the American.
It shouldn't be a question of cost of living. Companies pay significantly more (or less) in local markets because of supply and demand in those local markets.
Historically those markets have been localised due to the fact that few companies employed full time remote team members, and relocating countries is intentionally made difficult and expensive.
If we see a sustained transition where a significant percentage of companies (even in just particular industries) support full time remote work, we should expect to see supply and demand for talent in that market to become less localised (time zones are still a thing, and full time remote is different to full time remote _and_ distributed).
If that plays out, you'd expect locations with historically lower compensation to get a bump (regardless of cost of living), and locations with historical higher compensation to get a reduction (again, regardless of cost of living).
Companies don't care what your expenses are per se. The valley is an intensely competitive hiring market which forces up compensation, which in turn forces up cost of living - housing supply is very finite and many people living there have lots of disposable income.
I believe Bill Joy lived in Colorado during his time at Sun Microsystems, working on Solaris and Java (if I recall correctly, I believe he worked with Gosling, perhaps it was other Sun projects). I would think he didn't suffer a COL adjustment. The most valued engineers have little to worry about and always have/will. There is rarely resistance to their interests. Everyone else is expendable. Your expendability increases porortionally to the problems you create versus solve.
This reminds me a little of the 2008 recession where a lot of analysts at investment banks that were making a lot of money without much experience were fired and those jobs didn't return after the economic recovery. I believe that brought about increased algorithmic trading. It's tough to find sympathetic people to this issue.
I imagine displaced tech workers, now living in lower COL areas will have trouble finding sympathetic ears as well. I would certainly prefer to be the employer versus the employee in this contest.
Imagine I am traveling the world while working remotely. Am I going to have a different compensation based on the present location? On my tax domicile location? What if I move to Monaco? If I spend time in some super cheap country, would the company reimburse my flight ticket that might be worth 5-10x the average monthly salary?
I guess the negotiation would be very one-sided - there's no way they would increase one's salary to n x $1M if an employee moved to Monaco (you need to make a permanent 500k EUR deposit in a local bank during your residency and have a tenancy agreement for an apartment where rent doesn't go under 6k/month).
> Competitive, and not monopolistic, markets, produce the best outcomes for all consumers. If you subscribe to this belief, then an increased competition between the governments can only result in an increase in standard of living of everyone in the world.
It's one thing to allow remote workers from one country to work from anywhere in the world. It's a completely different thing to create a universal and homogenized labour market for tech work.
Universal salaries would allow established and well funded companies to hire anyone anywhere at massively unfair non-local salaries. Individuals would be better off but the job market for equivalent local jobs would suffer and, as a result, new companies in those nations would suffer too.
The difference in purchasing power of the established tech companies in rich nations would annihilate the local labour market competition. It would become next to impossible for non-rich-nation startups to hire the best talent because of the huge opportunity costs potential employees would face. Exporting the benefits of economic privilege like this at the expense of host nations is textbook economic imperialism[0].
Individual benefit isn't the only lens that this issue needs to be examined through.
I'm arguing that Indian tech companies are disadvantaged if all the best software engineers in India work for American companies. So are Indian consumers if there are fewer local companies solving local problems (and selling at local price-points).
Cost of living is a swindle, at least when it applies internationally and cross culturally.
If you want to live like a local in Jakarta (to use an extreme example), you can do so very cheaply, $180 a month for a room, eat rice for breakfast lunch and dinner.
If you want to live like a San Franciscan in Jakarta, it will cost as much if not more as in San Francisco. An apartment will cost several thousand dollars a month. Non-native food that gets imported, such as olive oil or cheese, will be very expensive.
So which is the definition of "cost of living" of a city? Is it how the average person lives there, or is how much it costs for the same lifestyle as where the company is based?
Yeah, I always laugh at the naivete of many people from first world countries : "Wow down there in Mexico the dollar is worth 10X/8X/6X times as more". No, it fucking is not. Or let me rephrase, it does but just for an extremely small subset of things. Cars? No, more expensive in the third world. House? Not at all, for a similar house, same quality of construction, and neigborhood, expect to pay at the very least the same amount of money you pay in average in the US. Food? No. Clothes? No. Land? Probably but if you have to sell it if will be sold to a lower price too. The only reason the dollar is worth more is because the local wages are pitiful, that's it.
How can local wages (in a currency other than USD) be "pitiful", but food cost "the same" for the USD? These are incongruent. Locals wouldn't be able to subsist on those food prices. The USD has greater purchasing power, that's just a fact.
Anyone who's ever done an international relocation understands this. It works like this.
Your company asks you, a SF-based tech executive, to relocate to India for a three-year assignment.
Notional cost of living in India is absurdly low. But your company will actually estimate that you'll need ~$50-100,000 more per year from a COL perspective.
This is because your existing lifestyle is now composed of what are all luxury goods in India.
A Toyota Camry is an expensive, luxury car in India with massively high rates of taxation. Even if you don't currently own a car, you will need to, because public transportation is some combination of unreliable, unsafe or unavailable. Vehicle maintenance will be much more expensive and frequent due to poor roads and the frequency of fender-benders.
Your company will tell you that they recommend in the strongest possible terms that you hire a driver from the local area, because of the track record of outcomes when an expat gets into a traffic accident.
Alcohol is incredibly expensive, particularly imported brands. Good luck if you like to eat steak. Restaurants that serve international cuisine are relatively rare, and those of good quality are actually expensive even by international standards. If you want to buy an item of technology that's near the leading edge, it's either not available, or only available via import with massive surcharges and taxes.
Very little of the housing stock will meet your expectations, and you will probably end up in one of a very-few 'expat friendly' areas. You will be buying bottled water because the domestic water is not safe to drink. If you want to be confident of 24 hour power, you will either end up needing a place with its own generator, or to be in the one of the super-elite compounds that provides its own generation capacity where you're literally paying major world city prices.
Visiting your family is now international travel involving stop-overs in Doha or London. Facilitation payments/bribes are now a budget item.
The point is: cost of living differs depending on expectation. If you go to Mexico to live like a local, it will be very cheap. If you go to Mexico to live like an American, it will not be.
EDIT: in fact, the real surprise to me was that the COL data from the big relo vendors like Cartus is nothing like symmetrical. If you look at say London/Tokyo as a city pair - there's a fairly large COL increase for moves in either direction.
I used to live in Paris, in a one bedroom apartment, eating out most of the time, using public transport, and going on vacation about 3 times per year. I used to spend about $3500 per month.
In Mexico City, I was living with the same quality of life if not better (apartment in the heart of downtown, Uber'ing everywhere, eating out all the time), spending about $1500 per month (less than half).
Well, a lot of this isn't about CoL. Having to relocate internationally for a stint imposes all sorts of costs, especially for families. Plus, it's very possible that someone owns a house already which they can maybe rent out but there are still costs involved.
Sure, plus possibly even some element of tax normalization etc.
But these are all cost-of-living items predicated on the assumption "I want to keep on living as I did and not be worse off for it". If that also means international schools for kids so they can stay on the same qualification track, then that's also a necessity, no?
Assistance with costs of home rental are often a separate line item in a good relocation package, and things like shipment of furniture and personal effects, temporary rentals during the initial phase of the move, the services of a local vendor to deal with administrivia are also separate from the cash COL adjustment part.
International schools. Probably a driver in a lot of low CoL areas. Maybe a cook. etc. And as you say, a lot may be handled outside of a "CoL adjustment." It just points out there's a huge gap between live like a local and live like a Westerner, especially a Westerner who is being relocated temporarily to a location that may not be especially desirable.
> Locals wouldn't be able to subsist on those food prices.
You can live on 2-3$ a day with American food prices and eat well. You can live on 50 cents a day with American food prices if you eat badly. Most third world wages covers this. For people living on less than that they will be forced to eat food of so low standard that it would be illegal to sell in USA.
For poor people in third world countries(well everywhere actually) food represents a bigger % of your budget. So OK, they are not starving, they can eat OK, but even buying a new pair of jeans is an investment.
I can buy considerably more food for 100 Euros in southern Italy than in Zurich. Rents are so much cheaper too.
Same goes for eating out, going to the cinema, getting around, plumbers, and hair cuts. Most things, really.
Of course, shipping some Swiss cheese and timber to Sicily in order to live my Zurich lifestyle is very expensive. There are some concessions in item availability depending on the location. But that's completely besides the point.
I'm convinced that a sizeable amount of the "location doesn't matter" people are just bummed that they can't pull in a SF salary and live like a king on a small SEA island.
You've overlooked the case where I want to live like a Jakartan in San Francisco, eating rice for breakfast, lunch, and dinner, and renting 50 square meters of living space.
Take the minimum, over all cultures, of what would be taken as a comfortable lifestyle, and then assess the income required to maintain that lifestyle in various cities to see that, in a real sense, those cities do have different costs of living.
That said, I believe the most sensible companies will not allow their HR/payroll departments to apply a standard cost-of-living formula, simply because there are bound to be prospective employees in Jakarta whose market values are higher than those of other prospective employees who happen to live in SFO and, as an employer, I'll want to hire all those people at their respective market values.
Pay is a power relationship. No one is asking company directors to take a pay cut based on cost of living calculations, because company directors have power over their companies. Similarly cleaners are paid peanuts even if they have to live/commute to high cost of living cities to do the job, because cleaners have no power in the relationship. This is also why workers who unionise can be paid more - the union has power over the employer.
> This is also why workers who unionise can be paid more - the union has power over the employer.
I'm not convinced a union wouldn't adjust pay based on location though. A lot of times they already adjust pay by tenure, and other factors that don't affect job performance directly.
Right now employees at tech companies do have power. If you get an offer that is adjusted based on cost of living, you can say no, and there are plenty of other places hiring.
No it isn't about power. Labour is a market and is governed by the laws of supply and demand (typically).
A cleaner gets paid less because it is unskilled work and almost any able bodied person can be a cleaner. Same someone that stacks shelves in a super market.
The same happens in our industry. VB.NET developers aren't in demand, the contract rates are sometimes £200-300 a day less than a React JS / C# .NET Core developer in Manchester which is in demand. Higher demand pushes up the price of labour.
Saying it’s a power relationship is another way of saying the same thing that you are saying here. The amount of power that employer and employee have is based in large part on supply/demand. However, power includes a little bit more: an employer who has a better knowledge of the market may be able to extract lower pay from an employee who doesn’t know their market rate, and an employee who is exceptionally well suited for a given job has more power to negotiate a better rate.
Of course, this can also be reframed as a supply/demand scenario taking into account imperfect information for a given scenario, but that’s largely my point. They aren’t equivalent concepts, but they are closely related.
> Saying it’s a power relationship is another way of saying the same thing that you are saying here.
The way you frame the power imbalance is framed suggests that there is always something coercive and manipulative going on. A market rate suggests that a the hourly or daily rate for labour has settled naturally around a particular point through market forces in that particular area. Developers are more in demand in London so the day rate offered reflects that (typically £100-200 more).
You seem to be conflating two concepts into one.
> The amount of power that employer and employee have is based in large part on supply/demand.
What do you mean by power? I don't want to sound rude but the way you are talking about it is akin to how people talk about the force in star wars.
> However, power includes a little bit more: an employer who has a better knowledge of the market may be able to extract lower pay from an employee who doesn’t know their market rate, and an employee who is exceptionally well suited for a given job has more power to negotiate a better rate.
What you are arguing there is being informed about the market means that you won't get ripped off. Generally though there will be an approximate wage for a particular type of work based on how valuable the employee is and whether they can be replaced or not.
There are job boards these days online for almost anything you can work out what you are going to get paid for a particular type of role.
> Of course, this can also be reframed as a supply/demand scenario taking into account imperfect information for a given scenario, but that’s largely my point. They aren’t equivalent concepts, but they are closely related.
Again don't want to sound rude. This all read likes double speak to me. If you want to talk about a coercive power imbalance then talk about that. If you want to talk about market rates talk about market rates. Simply call things what they are.
I’m not talking about a power imbalance, I’m talking about pay being a function of power equilibrium, of which market forces are one significant (perhaps most significant) component in a market society.
I am sorry that it appears this way; I truly am not meaning to engage in double speak and really am trying to have a good faith dialogue. I’m not sure how you can remove the act of negotiation for labor unless the labor involved is entirely commoditized. And I’m not sure how to express the elements that make up that negotiation except as opposing interests with more or less power (regardless of whether you wish to label this as “coercive” or “manipulative” which seems to come with its own moral baggage that I am not trying to address).
I guess it could appear that I am engaged in double speak if you believe I am the poster that you originally responded to, but I am not.
True... and higher supply pushes down the price of labour.
Software developers like to think they are some uniquely skilled niche, currently benefiting from the laws of economics.
If remote work REALLY takes off, the supply increases by whatever the rest of the world can contribute. It isn't like manufacturing where remote work isn't possible.
If it was as simple as you are stating (A has power over B), salaries would be zero, except with unionised workers, were company profits would be zero.
Instead of providing blanket rules in the name of equality, companies should make decisions based on the value that a single employee brings compared to what they can hire in a remote first job.
Sure, average salaries will probably drop from SF ones. Rich companies will save some more money. Startups who have some mental flexibility will be able to snatch some good hires. Employees stuck in cheap countries will get more offers. Countries' economies will have a push to improve or become even more irrelevant. Politicians will steal even more taxes from remote workers. More people will start their own business.
It seems to me companies can either pay for the work, and how valuable it is to them, or pay by need, ie 'cost of living'.
But in the latter case, they should also be paying people with families more than singles, for example. Since that is not the case, I can't see how they can justify 'cost of living' adjustments.
Quite apart from the fact that the cost-of-living indices are often wildly incomparable. For example, sending your kids to a state school in Norway, vs for example Equatorial Guinea.
Obviously in the latter case, you actually need to send the kids to an often ludicrously expensive expat school to obtain even the same ball-park level of education, and so even though the cost of just living may be much lower, it is actually more expensive to maintain a comparable lifestyle.
The problem comes with the 'supply' side. It tends towards subsistence, because people need to eat. Subsistence is cheaper in 'poor' countries. Is that how we want society to operate?
I think calling it a COL adjustment is the problem. It’s not. It’s a supply and demand issue.
There are a limited pool of people willing to move to the Bay Area (I’ve had this discussion with my HR before - great candidate, great package, they look at rent and say “nah”).
If your pool of potential employees goes from X in the Bay Area to 10 * X across all 50 states, that increase in supply will impact wages.
That guy making $100,000 in Ohio who wouldn’t take a $175,000 salary in the Bay Area might be very willing to take $150,000 if he doesn’t have to move.
The disconnect in this conversation between employer and employee happens for these reasons:
In reality companies had to pay a premium in order to demand that an employee lives in certain geographic area so that they show up every day in a certain office building. Depending on the location of the building, the premium can be very high.
Now comes the pandemic which forces - or should I say “allows” - companies to try out the remote model in unison without the risk of being the first mover.
It turns out that it works good enough. But then a company must be questioning why it should continue paying the location premium to employees if it doesn’t see any benefit in it anymore. Adjusting existing salaries downwards, even though the employees didn’t make any changes in their commitment, is socially unacceptable.
Now companies hope that if an employee decides to take advantage of the new freedoms they have an open for this conversation where they try to cut the location premium based on COL arguments, which they know is not the real reason.
If it would be up to companies alone, they would have already reduced all our salaries and if we wouldn’t have liked that, they would have said.. well just move to a lower COL area, we don’t mind
> In reality companies had to pay a premium in order to demand that an employee lives in certain geographic area so that they show up every day in a certain office building. Depending on the location of the building, the premium can be very high.
100% agreed with this. I personally see no issue in paying a premium if an employer is asking for something extra, like being in a specific location, or working odd hours, paying a premium is reasonable. There are many reasons why a company may want someone to be on-site in a specific city; this applies if the city is SF, or a small city.
The issue that I personally have is when location is not a factor, but is still factored in to "location dependent pay". Pay someone in SF more because it's important to you for them to be phsycially present? Sure. Pay someone in Oklahoma less than someone in Austin, despite the fact that neither of their locations makes a difference to their work? Now you're openning yourself up to implicit discrimination and "unfair" conditions.
Median salary globally is around USD $10k, so for remote work presumably everyone's salaries should be similar. Given developers are high skilled and in demand, maybe they should be paid 3x the global median so $30k per year.
That's a fine starting point to set the initial conditions. Now, if a company can find a way to harness developers to create $100K of enterprise value per year, they will be happy to bid $50K for qualified developers. Another company that can create $150K/dev/yr will be willing to bid $60K, etc.
I doubt you'll see qualified developers seeing a salary cut anywhere near as deep as you project, because the process I describe will play out faster than needed to inject the needed stability.
> I doubt you'll see qualified developers seeing a salary cut anywhere near as deep as you project, because the process I describe will play out faster than needed to inject the needed stability.
In the long term, yes I agree. In the short term? No way, there should be around 5x-10x as many people in the world who would be great competition for FAANG spots who cannot do it now because of VISA and location restrictions, lift one of those and now the pool is inundated with talent the companies can do whatever they want.
How many people have handled FAANG-scale problems (especially oncall) without ever having worked for a FAANG-scale company? I've learned things from Bay Area colleagues that I never did in Seattle.
I think cost-of-living adjustments are mostly a bluff. If you demand more and you're better than someone in an expensive area, they're not going to hire the shittier candidate. They'll see what they can get away with given your apparent leverage, and offer that. If you have multiple offers, they'll bid you up to the budget for your skill level. Where you are is irrelevant (except for legal issues). At least, that's how it seems to me.
Can anyone on the other side of things chime in? Is this how it works, or is there more going on? Is it a "we-don't-negotiate-with-terrorists" policy to stop negotiation from propagating?
I don't know if I'd call them a bluff or an initial bid, but I agree with your main point that if you can convince a hiring manager that you're the best candidate they can find and represent a value overlay, they're very motivated to find a way to make it happen (often by hiring you at a more senior level than what you were being recruited for).
In the end, finding extremely talented developers is still a difficult, time-consuming, risky endeavor, remote or in-office.
I call it a bluff because the implication is it's non-negotiable.
One of the reasons I say this is that if people weren't falling for it, they wouldn't tell you they're applying an adjustment at all, because it tells you their actual budget is higher. They'd just give you a lower number and leave it at that. If they go so far as to communicate the amount of your adjustment, they're making a particularly poor strategic move because it tells you exactly how much higher their lower bound really is.
100% agree here. This is also how I ran things at my previous company; we would allocate a budget and hire the best person we could with this budget. If they happened to live in a lower COL location, good for them!
However employers decide to compensate employees in our post-Covid future, it doesn't matter because they must still participate in the market.
If an employer's particular remote-salary algorithm spits out a number that is less then what equally-qualified employees can get elsewhere, they will go elsewhere. If not, they won't. The end effect is that any employer participating in a market will must pay what that market is demanding, regardless of what the algorithm says.
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[ 2.3 ms ] story [ 336 ms ] threadThis opens a whole can of worms. If a person moves to a lower COL location but then has kids would they break even?
Why do you think so many software companies have offices in india? Because it allows them to pay less based on cost of living.
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Those adjusted costs were based on the local job market. They needed to be competitive with the other options you might have had. Once you are working remote, you are not likely comparing "I can go down the street and work THERE for x" any more. You are instead "I can go online and work THERE instead for Y". Your physical location is not a variable in that comparison except for companies that hire based on some data security or legal requirement that work be done within the borders of some certain country.
Like it is natural to pay the same price for something we both order from China, and in the same time it is also completely normal that we will pay different prices for potatoes at our local market.
Employment is a social contract, looking for a compromise between two positions:
* Employers want to essentially acquire a good (productive employee) for the best quality / price ratio. If a trained monkey could do the job for peanuts, employers would be happy.
* Employees, and the society made up of employees, want stability, employment rights etc. as salary work is a backbone of societal stability.
Employers will happily pay the lowest amount of salary that will convince someone to work for them - COL being a key consideration. Employees will negotiate on the basis of the value they bring, but in principle, there is no moral obligation for employers to pay a wage that's fair, based on the value of the employee work, perhaps above ~subsistence levels.
How it works out, we'll see. Perhaps societies agree that strong-arming employers to pay equal salaries, regardless of location, will work - that's how unions, weekends and paid holidays came to be in the developed world (sorry Americans). But neither is a fundamental human right, and rather a societal contract, negotiated between labour takes and makers.
For a different take, should it also be unfair for someone qualified, living in a lower cost-of-living location, to offer their employment to the same company for less? This seems like normal salary negotiation to me.
This seems like a purely semantic distinction to me. Unless you're religious and believe that humans are "endowed by their Creator with certain unalienable rights" then everything you're claiming as a 'right' is just some generally-agreed social principle that your ancestors fought hard to establish.
Until "the board" steps in and says 'no', right? That's been my experience. Proclamations and cheerleading about "we're a meritocracy, we act democratically in this company".
Times get tough (like a Global pandemic coming along), employees ask firm questions like "will the executives taking a pay cut like the rest of us?"
Response: "the board said no"
"We're all in this together"; "The board won't approve it."
"Burnout is real! Take steps to monitor it";"The board won't approve a 4 day work week"
etc. I've been in some VERY heated and passionately argued meetings in the last month as a leader, hearing my cohort leaders giving voice and in some cases giving voice myself to concerns and frustrations coming from a workforce that is growing pretty pessimistic watching how much of the internal corporate cheerleading and messaging in practice is at odds with corporate rhetoric that have manifested during our extended org-wide WFH.
Wonder if anyone else has observed the same.
But some fundamental things are not up to the company, at least by law: can't discriminate by gender, race, age, veteran status, marital status, having children and so on. In Europe, like it or not, you must give your employees paid holiday leave, sick leave and time off to look after children. If firing people, you must give them proper notice, and cannot fire people for a long list of reasons considered illegal. If doing group redundancies, you must follow proper procedure, aiming to maximise the fairness of the approach.
Of course, this is the same CEO who owns three separate properties, and flew between them in his private jet, to keep his own stress levels down during Covid-19.
is there moral obligation to do your job well instead of let's say watching youtube and doing bare minimum not to get fired?
It's funny how people expect moral behaviour from other people but not from companies made of these people. Somehow it's fine for companies to be jerks.
Look at many of the products we make together. Why would we hide behind laws that protect bad practices and think those same companies take a moral high ground on this issue. It is, and always will be, due in part to fiduciary responsibility to shareholders, about the money.
The duty of a business is to keep the business healthy. This whole "profit at any cost" is a fairly new development.
Do we though? We expect people to not break the rules, e.g murder or steal. We don't expect people to stop eating meat, polluting the earth, or generally to stop being extremely selfish. If we expected everyone to be moral you and I wouldn't be spending money on vacations and buying computer games but on trying to save poor kids in Africa and Bangladesh.
Maybe I'm hanging around the wrong people (I often wonder where all the "right" ones are), but that's how it is. And if I don't play the same game, I'll keep getting fucked until I die. It's really depressing.
Empirical evidence says otherwise (about altruism): see the work of Daniel Batson - https://en.wikipedia.org/wiki/Daniel_Batson
As for good people, there are many. There are thousands who give at least 10% of their income to the most cost-effective charity they can find - https://www.givingwhatwecan.org/
There are thousands of people working very hard on the most effective solutions to the world's most important problems - https://www.effectivealtruism.org/
There is plenty of hope. Find better people, work to improve yourself, the world, and others.
At any rate, for smaller things, my experience is that most folks will not throw you under the bus. At high stakes, it really just depends on whether the relationship with you (and folks you might complain to) and/or relationship to whatever intrinsic value system matters more or less than the stakes.
Once you learn about the horrors of the animal abuse happening thanks to the money with which you buy meat, I think it's the right thing to stop. And similarly, to encourage others to decrease their meat consumption by letting them know that by buying meat, they are very likely going against their values (just ask them if they would pay to torture a dog, for example).
Instilling better norms in a society is hard work, but it's a good thing. Thanks to the efforts of our predecessors, we now look down on beating one's wife, for example. Let's join together, and make it the norm to give 10% of our income to the most cost-effective charities we can find (see https://www.givingwhatwecan.org/ )
Well, people know. Maybe they don't KNOW know, in the sense of actually visiting a slaughter house and smelling the blood, but I'm sure most people know about animal shipments, tiny cages, and that gassing or slashing animals throats isn't a picnic. Personally I donate money to an animal protection program (probably don't donate enough). Conversations I have with people in my life about this are overwhelmingly futile and people become quite hostile when you talk to them about this.
I encourage people to see a wide continuum between eating 100% meat and eating 0% animal products. I express that I understand the challenges in decreasing one's meat consumption. I point out that it's not all or nothing - you can be "mostly vegan" (while still consuming animal products sometimes).
It's best to have conversations like this when the person is asking, not because you "caught" them eating an animal product.
Because of how grim the reality is for animals raised for food, most people are reluctant to be exposed to what it means. They will hope that (and not look for evidence against their belief that) the meat they buy comes from a better place (it's worth pointing out that in the US about 99% of meat comes from factory farms).
As I said - people's values are likely aligned. Polls consistently show that people do not approve of animal abuse.
The final argument that made me drastically decrease my meat consumption was the empirical fact that individual choices matter:while supermarkets are not 100% responsive (buying 1 item less decreases their next order by 1 item), they are responsive to demand. And if they buy in batches (which they likely do), you have a chance of triggering a "next-larger" batch order. On average it all works out to an (economic) elasticity of less than 1, but a far cry from 0 (depends on type of meat, but rough figure of 0.5 is a sensible underestimate).
I am not under the illusion that I was the person who caused that change. Change rarely works this way. Our decisions to do something (especially this drastic) are composed of numerous influences.
Part of change is about what people expect to be the new normal. If all your friends are ok with homosexual marriages, you'll likely change your point of view soon enough anyway. If many of your friends at least mention that they are concerned about factory farm abuses of animals, you might one day decide to eat one less hamburger.
Change is much easier when younger; I changed during college years. I'm now 35 and I'm sure to have nudged at least some of my friends to eat less meat in the last decade. Much of it probably was just my consistency. If your friend tries a fad diet, you can ignore it. If their diet lasts 5 years, you'll at least want to learn more about why and how.
It's an important issue to change others' opinions on. A great book about this subject is "Change of Heart: What Psychology Can Teach Us About Spreading Social Change" by Nick Cooney
Morality is a complicated thing to define[citation needed] but I would posit we actually generally have a high moral standard for each other in the west. We expect each other to not lie pathologically, push others away when they take advantage of those around them (e.g. scammers, con artists) enforce the rules of monogamous relationships (for the vast majority), return lost belongings to each other, encourage food safety, and so on.
And you can find secular explanations for all of those, but most people are just taught that those are the right things and stick to it. Sure, some of the integrity of those areas are eroding over time, but generally speaking society is still held together with morals.
In America we pretty much all get a pass for buying clothes, for instance, which has some considerable moral strings attached to it. We could make our own, but that’s just not a reasonable way to live life here. You would have no company if that was the way you chose to spend your time, so it would be a sad existence, and as humans we are wired to want to behave like those around us.
Bottom line is that while there may be morality inflation, i.e. when you judge the modern lifestyle on an absolute scale, it looks bad, that there is still a range of acceptability, and if you venture outside of it, that’s no bueno. That doesn’t mean we don’t expect people to be moral (100% would be “perfect”).
No
You can choose to do well to avoid being fired.
You can choose to do well to chase a promotion.
You can choose to do well because the work interests you.
But you are not morally obligated to do anything, and if your employer is not very good at evaluating your work, then — like a man who buys a gym membership and never goes — that's on them.
Both you and GP seem to be talking from an amoral perspective. To many people there is certainly a moral obligation to put in an honest effort and pay fair wages.
It's immoral to exploit your employees, lie to them, not keep to a contract, deny them the growth opportunities they were lead to believe they have etc. But to negotiate a lower pay, that's not immoral. As an employee, take it or leave it.
To be clear, I'd love to get a SF salary and live in an Alpine valley in Italy or France. Maybe the world will come to that arrangement. But if not, I wouldn't call it immoral.
how can you have a moral obligation to an entity that is itself amoral (a corporation)?
>and pay fair wages
i'm not gonna hedge this at all: there are no corporations that pay fair wages out of a moral obligation. if there were no minimum wage they would be the lowest that the market would bare (and the market is also amoral).
of course not. I do that all the time and don't think I'm doing something imoral. it's up to the employer to figure out that I could do more tickets. I'm not stupid to say: hey, I finished my tickets, give me more work :))
We expect different behavior from a beehive than we expect from the bees, don't we?
Obviously you wouldn’t have suggested this if my expectation was correct, but it would’ve been my guess if I didn’t use meta-reasoning about why you might be giving that example.
How can I be not wrong? "Entrepreneur" is not an answer.
You're not morally obligated to agree to literally anything, but you are morally obligated to uphold your end of an agreement.
Employers trying to adjust salaries based upon COL really isn't much different to printer manufacturers software disabling printers and selling them at a cheaper price. It's an attempt at price differentiation - in the opposite direction.
I'm objecting to the critique of COL-adjustments on moral grounds: that it is wrong, according to some metric, to pay people differently, based on where they work remotely from. I don't think it is wrong. Maybe impractical, and maybe we agree it's a nuisance, and as workers can force the employers to reject that. But fundamentally fits in with what employment is.
I would think what is documented and certified when filing taxes will be important, perhaps retroactively. Jobs and new software tools may pop up to help companies better understand their geographically distributed workforce from an accounting perspective. Employees with legal challenges (past or present) have the potential to reduce productivity.
i.e. is it only downward adjustments for COL that you object to? and, if so, what's the logic in that (other than pure self-interest)?
Likewise, if I take a job and get X salary for that job, then move to a cheaper part of town I wouldn't expect to take a pay cut.
You're employed with a salary of $X at location Y.
Your employer wants you to move to location Z with higher cost-of-living. You can either stay at location Y or move to location Z. You feel it's right that your employer increase your salary because of the higher cost of living if you move to Z.
The company is asking you to make a concession: do the same work, but in a different location.
When you ask to move to a lower-cost area, aren't you asking for the same concession? Why is that concession expected to be gratuitous vs the same concession from the company which is expected to be compensated?
If an remote-work employee wants to move to a lower cost-of-living area it should make no difference to the employer. They're still getting the same work as before, at the same cost. If the work output was worth that much before then it's still worth that much when performed from a different location.
If an employee chooses to move to a more expensive location, on their own initiative, then that is more like the second scenario than the first, and there is no reason to expect the employer to offer higher compensation to offset the cost-of-living in the new location when there is no particular benefit to the company from the move.
EDIT: fix typo
New hires generally have their existing compensation as part of their negotiation. So if I'm already living in SF and am negotiating with a new employer for salary, my current high CoL salary gives me leverage to expect higher pay regardless if I'm working remotely. Remote work allows for flexibility but it doesn't erase CoL concerns.
On the other hand, if I want to do something because it is convenient for me but does not affect my work in any way (i.e. change where I work from) I would not expect my compensation to change.
Perhaps free markets are not really the right system to apply when managing human resources, and especially to distributing the fruits of our collective efforts.
This is true, but there's more to it. Employers typically make a product and they still need to sell it to somebody who is not a poor monkey. Employers also need a safe social environment so that their offices do not get burn by the angry masses, and if the factory takes fire they expect the firefighters to show up. Thus, employers have a real interest in living in a safe world full of happy, well-paid people.
When it comes to knowledge / skill based work, the high end of the spectrum is a multiple of value over the low end. Sometimes that's 1.5x, sometimes it's 10x, sometimes it's 100+x.
It doesn't matter how many scientists you hired if you didn't hire the first one (or one of the first ones) to create a working and marketable COVID vaccine, for example. It doesn't matter how many engineers you hired at 50k/year if you didn't hire the guy for 2 million / year that finally got self-driving cars working.
At a less extreme scale, it doesn't matter how many junior devs you hire to do the work if one senior dev could have done it faster and with less headaches, which happens all the time in tech. On a daily basis, in my experience at multiple tech jobs.
And let's also remember that market salaries selects for talent before the talent is even there; today's smartest students that want a paycheck go for tech careers (and some other fields). If tech stops paying well, those people go into other fields, and you don't even get the option to hire that 10xer because they don't exist. If you stop paying well but your competitors continue to pay top dollar, your competitors will leave you in the dust.
It's used by business to pretend to have an office in city X (expensive) while actually working in city Y (or in a completely different country). It can also be used to provide an address coming from a fashionable/trendy part of the city.
There are similar services that offer re-mailing services. Basically you pay a fee and have a fund for postages/stamps. Whenever mail arrives it gets re-packaged and re-mailed to your real address.
It's basically proxying for real mail.
I used reship.com multiple times to appear to be located in Oregon and overcome "we don't ship to your location" problems.
If you feel inclined you can say “I’m taking a job with an employer who doesn’t pay based on location”.
But there’s really no reason to do the employer the service of telling them.
Oops.
But the advantage of a remote workforce, from the employer's point of view, is 1) getting the brilliant people who can't leave their hometown to work for you, and 2) not having to pay San Francisco salaries. If you're an incredibly gifted talent, you'll fall into category 1 and they will pay you the San Francisco pay regardless of your location (or you can find an employer who will). But if your contribution is shipping high quality, but fundamentally non-novel, Node apps or similar, you'll find that the "standard" salary is that which is paid in Timbuktu, and if you're sitting in San Francisco and want more, you'll have to provide your employer with a compelling reason, or they'll just opt to hire a second person in Timbuktu instead.
Ofc, if they want people to come and sit in their SF office they have to pay more. On other hand if they can get replacement for their ex-local resource for remote for cheaper they might do that.
The conversation in the future will be "Why would I hire you in SF and pay you three times what I'm paying in Alabama? You're equivalent guys doing the same work."
The concept of the "standard" will shift from the highest-paid locale to the lowest, and "Cost of Living Adjustment" will be something that employees in San Francisco plead for, not something that employees in Libya complain about.
The only way out of this will be to rebut the assertion "you're doing the same work," i.e. to have skills that are globally unique. Not that you have to be Jeff Dean to keep a job, but that you have to be a whole lot more capable than your peers, the same way that a product is not assumed to be manufactured in America unless there is a compelling reason to.
Basically, the work is worth something and if we do the work, we should be paid a reasonable amount, regardless of where we sat when we did the work.
If we're talking knowledge work, the work product is the work product, and it doesn't matter where it's generated - the person in Libya has as much right to earn $200k as the American.
Historically those markets have been localised due to the fact that few companies employed full time remote team members, and relocating countries is intentionally made difficult and expensive.
If we see a sustained transition where a significant percentage of companies (even in just particular industries) support full time remote work, we should expect to see supply and demand for talent in that market to become less localised (time zones are still a thing, and full time remote is different to full time remote _and_ distributed).
If that plays out, you'd expect locations with historically lower compensation to get a bump (regardless of cost of living), and locations with historical higher compensation to get a reduction (again, regardless of cost of living).
Companies don't care what your expenses are per se. The valley is an intensely competitive hiring market which forces up compensation, which in turn forces up cost of living - housing supply is very finite and many people living there have lots of disposable income.
This reminds me a little of the 2008 recession where a lot of analysts at investment banks that were making a lot of money without much experience were fired and those jobs didn't return after the economic recovery. I believe that brought about increased algorithmic trading. It's tough to find sympathetic people to this issue.
I imagine displaced tech workers, now living in lower COL areas will have trouble finding sympathetic ears as well. I would certainly prefer to be the employer versus the employee in this contest.
If you can help them let say generate $10M income (while live in Monaco) then its no brainer to pay you $1M
It's one thing to allow remote workers from one country to work from anywhere in the world. It's a completely different thing to create a universal and homogenized labour market for tech work.
Universal salaries would allow established and well funded companies to hire anyone anywhere at massively unfair non-local salaries. Individuals would be better off but the job market for equivalent local jobs would suffer and, as a result, new companies in those nations would suffer too.
The difference in purchasing power of the established tech companies in rich nations would annihilate the local labour market competition. It would become next to impossible for non-rich-nation startups to hire the best talent because of the huge opportunity costs potential employees would face. Exporting the benefits of economic privilege like this at the expense of host nations is textbook economic imperialism[0].
Individual benefit isn't the only lens that this issue needs to be examined through.
[0] - https://en.wikipedia.org/wiki/Imperialism
If you want to live like a local in Jakarta (to use an extreme example), you can do so very cheaply, $180 a month for a room, eat rice for breakfast lunch and dinner.
If you want to live like a San Franciscan in Jakarta, it will cost as much if not more as in San Francisco. An apartment will cost several thousand dollars a month. Non-native food that gets imported, such as olive oil or cheese, will be very expensive.
So which is the definition of "cost of living" of a city? Is it how the average person lives there, or is how much it costs for the same lifestyle as where the company is based?
Your company asks you, a SF-based tech executive, to relocate to India for a three-year assignment.
Notional cost of living in India is absurdly low. But your company will actually estimate that you'll need ~$50-100,000 more per year from a COL perspective.
This is because your existing lifestyle is now composed of what are all luxury goods in India.
A Toyota Camry is an expensive, luxury car in India with massively high rates of taxation. Even if you don't currently own a car, you will need to, because public transportation is some combination of unreliable, unsafe or unavailable. Vehicle maintenance will be much more expensive and frequent due to poor roads and the frequency of fender-benders.
Your company will tell you that they recommend in the strongest possible terms that you hire a driver from the local area, because of the track record of outcomes when an expat gets into a traffic accident.
Alcohol is incredibly expensive, particularly imported brands. Good luck if you like to eat steak. Restaurants that serve international cuisine are relatively rare, and those of good quality are actually expensive even by international standards. If you want to buy an item of technology that's near the leading edge, it's either not available, or only available via import with massive surcharges and taxes.
Very little of the housing stock will meet your expectations, and you will probably end up in one of a very-few 'expat friendly' areas. You will be buying bottled water because the domestic water is not safe to drink. If you want to be confident of 24 hour power, you will either end up needing a place with its own generator, or to be in the one of the super-elite compounds that provides its own generation capacity where you're literally paying major world city prices.
Visiting your family is now international travel involving stop-overs in Doha or London. Facilitation payments/bribes are now a budget item.
The point is: cost of living differs depending on expectation. If you go to Mexico to live like a local, it will be very cheap. If you go to Mexico to live like an American, it will not be.
EDIT: in fact, the real surprise to me was that the COL data from the big relo vendors like Cartus is nothing like symmetrical. If you look at say London/Tokyo as a city pair - there's a fairly large COL increase for moves in either direction.
I used to live in Paris, in a one bedroom apartment, eating out most of the time, using public transport, and going on vacation about 3 times per year. I used to spend about $3500 per month.
In Mexico City, I was living with the same quality of life if not better (apartment in the heart of downtown, Uber'ing everywhere, eating out all the time), spending about $1500 per month (less than half).
But these are all cost-of-living items predicated on the assumption "I want to keep on living as I did and not be worse off for it". If that also means international schools for kids so they can stay on the same qualification track, then that's also a necessity, no?
Assistance with costs of home rental are often a separate line item in a good relocation package, and things like shipment of furniture and personal effects, temporary rentals during the initial phase of the move, the services of a local vendor to deal with administrivia are also separate from the cash COL adjustment part.
You can live on 2-3$ a day with American food prices and eat well. You can live on 50 cents a day with American food prices if you eat badly. Most third world wages covers this. For people living on less than that they will be forced to eat food of so low standard that it would be illegal to sell in USA.
I can buy considerably more food for 100 Euros in southern Italy than in Zurich. Rents are so much cheaper too.
Same goes for eating out, going to the cinema, getting around, plumbers, and hair cuts. Most things, really.
Of course, shipping some Swiss cheese and timber to Sicily in order to live my Zurich lifestyle is very expensive. There are some concessions in item availability depending on the location. But that's completely besides the point.
I'm convinced that a sizeable amount of the "location doesn't matter" people are just bummed that they can't pull in a SF salary and live like a king on a small SEA island.
Take the minimum, over all cultures, of what would be taken as a comfortable lifestyle, and then assess the income required to maintain that lifestyle in various cities to see that, in a real sense, those cities do have different costs of living.
That said, I believe the most sensible companies will not allow their HR/payroll departments to apply a standard cost-of-living formula, simply because there are bound to be prospective employees in Jakarta whose market values are higher than those of other prospective employees who happen to live in SFO and, as an employer, I'll want to hire all those people at their respective market values.
I'm not convinced a union wouldn't adjust pay based on location though. A lot of times they already adjust pay by tenure, and other factors that don't affect job performance directly.
Right now employees at tech companies do have power. If you get an offer that is adjusted based on cost of living, you can say no, and there are plenty of other places hiring.
A cleaner gets paid less because it is unskilled work and almost any able bodied person can be a cleaner. Same someone that stacks shelves in a super market.
The same happens in our industry. VB.NET developers aren't in demand, the contract rates are sometimes £200-300 a day less than a React JS / C# .NET Core developer in Manchester which is in demand. Higher demand pushes up the price of labour.
Of course, this can also be reframed as a supply/demand scenario taking into account imperfect information for a given scenario, but that’s largely my point. They aren’t equivalent concepts, but they are closely related.
The way you frame the power imbalance is framed suggests that there is always something coercive and manipulative going on. A market rate suggests that a the hourly or daily rate for labour has settled naturally around a particular point through market forces in that particular area. Developers are more in demand in London so the day rate offered reflects that (typically £100-200 more).
You seem to be conflating two concepts into one.
> The amount of power that employer and employee have is based in large part on supply/demand.
What do you mean by power? I don't want to sound rude but the way you are talking about it is akin to how people talk about the force in star wars.
> However, power includes a little bit more: an employer who has a better knowledge of the market may be able to extract lower pay from an employee who doesn’t know their market rate, and an employee who is exceptionally well suited for a given job has more power to negotiate a better rate.
What you are arguing there is being informed about the market means that you won't get ripped off. Generally though there will be an approximate wage for a particular type of work based on how valuable the employee is and whether they can be replaced or not.
There are job boards these days online for almost anything you can work out what you are going to get paid for a particular type of role.
> Of course, this can also be reframed as a supply/demand scenario taking into account imperfect information for a given scenario, but that’s largely my point. They aren’t equivalent concepts, but they are closely related.
Again don't want to sound rude. This all read likes double speak to me. If you want to talk about a coercive power imbalance then talk about that. If you want to talk about market rates talk about market rates. Simply call things what they are.
I guess it could appear that I am engaged in double speak if you believe I am the poster that you originally responded to, but I am not.
True... and higher supply pushes down the price of labour.
Software developers like to think they are some uniquely skilled niche, currently benefiting from the laws of economics.
If remote work REALLY takes off, the supply increases by whatever the rest of the world can contribute. It isn't like manufacturing where remote work isn't possible.
Sure, average salaries will probably drop from SF ones. Rich companies will save some more money. Startups who have some mental flexibility will be able to snatch some good hires. Employees stuck in cheap countries will get more offers. Countries' economies will have a push to improve or become even more irrelevant. Politicians will steal even more taxes from remote workers. More people will start their own business.
The market and the world will go on.
But in the latter case, they should also be paying people with families more than singles, for example. Since that is not the case, I can't see how they can justify 'cost of living' adjustments.
Quite apart from the fact that the cost-of-living indices are often wildly incomparable. For example, sending your kids to a state school in Norway, vs for example Equatorial Guinea.
Obviously in the latter case, you actually need to send the kids to an often ludicrously expensive expat school to obtain even the same ball-park level of education, and so even though the cost of just living may be much lower, it is actually more expensive to maintain a comparable lifestyle.
As many have pointed out, it's usually neither of those. The pay is determined by supply and demand.
There are a limited pool of people willing to move to the Bay Area (I’ve had this discussion with my HR before - great candidate, great package, they look at rent and say “nah”).
If your pool of potential employees goes from X in the Bay Area to 10 * X across all 50 states, that increase in supply will impact wages.
That guy making $100,000 in Ohio who wouldn’t take a $175,000 salary in the Bay Area might be very willing to take $150,000 if he doesn’t have to move.
Now comes the pandemic which forces - or should I say “allows” - companies to try out the remote model in unison without the risk of being the first mover.
It turns out that it works good enough. But then a company must be questioning why it should continue paying the location premium to employees if it doesn’t see any benefit in it anymore. Adjusting existing salaries downwards, even though the employees didn’t make any changes in their commitment, is socially unacceptable.
Now companies hope that if an employee decides to take advantage of the new freedoms they have an open for this conversation where they try to cut the location premium based on COL arguments, which they know is not the real reason.
If it would be up to companies alone, they would have already reduced all our salaries and if we wouldn’t have liked that, they would have said.. well just move to a lower COL area, we don’t mind
100% agreed with this. I personally see no issue in paying a premium if an employer is asking for something extra, like being in a specific location, or working odd hours, paying a premium is reasonable. There are many reasons why a company may want someone to be on-site in a specific city; this applies if the city is SF, or a small city.
The issue that I personally have is when location is not a factor, but is still factored in to "location dependent pay". Pay someone in SF more because it's important to you for them to be phsycially present? Sure. Pay someone in Oklahoma less than someone in Austin, despite the fact that neither of their locations makes a difference to their work? Now you're openning yourself up to implicit discrimination and "unfair" conditions.
I doubt you'll see qualified developers seeing a salary cut anywhere near as deep as you project, because the process I describe will play out faster than needed to inject the needed stability.
In the long term, yes I agree. In the short term? No way, there should be around 5x-10x as many people in the world who would be great competition for FAANG spots who cannot do it now because of VISA and location restrictions, lift one of those and now the pool is inundated with talent the companies can do whatever they want.
Can anyone on the other side of things chime in? Is this how it works, or is there more going on? Is it a "we-don't-negotiate-with-terrorists" policy to stop negotiation from propagating?
In the end, finding extremely talented developers is still a difficult, time-consuming, risky endeavor, remote or in-office.
One of the reasons I say this is that if people weren't falling for it, they wouldn't tell you they're applying an adjustment at all, because it tells you their actual budget is higher. They'd just give you a lower number and leave it at that. If they go so far as to communicate the amount of your adjustment, they're making a particularly poor strategic move because it tells you exactly how much higher their lower bound really is.
Over time the pay will become equal, and high COL areas will either stop being high COL or will no longer be where people are hired from.
Eventually, most people are just going to live further away and commute less.
It also gives people less of an incentive to migrate to bigger cities; they can live comfortably in their own and invest in their own cities.
If an employer's particular remote-salary algorithm spits out a number that is less then what equally-qualified employees can get elsewhere, they will go elsewhere. If not, they won't. The end effect is that any employer participating in a market will must pay what that market is demanding, regardless of what the algorithm says.