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Ask HN: Should a remote employee’s salary be tied to their physical location?

news.ycombinator.com

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Re: Ask HN: Should a remote employee’s salary be tied to their physical location?

#21

Post by screye »

At a practical level, the industry will pay you the least amount of money for which you will accept the offer.

In SF/Seattle, if they do not add the COL multiplier, your wages are low enough, that you might reject the offer. On the other hand, it is quite unlikely for a person to able to find another competitive offer, even if their salary is significantly lower than their colleague who make less.

At an ideological level, this poses a much bigger question. Are employees paid a proportional amount to the value they bring to their organization ?

I would say no. I do not believe every talented European is 40% as capable as the average developer in the US. I do not believe that the same software engineer that made $10k in India, suddenly brings 10x as much value due to a 1 year masters, once they move to the US.

Everything points towards companies historically paying employees not the salary they deserve, but the salary they will accept. As long as remote employees continue accepting these lower salaries, they will continue to be paid lower salaries.

It is a chicken and egg problem, in that sense.

Re: Ask HN: Should a remote employee’s salary be tied to their physical location?

#22

Post by FabHK »

Not really, unless the company chooses the location, or requires people in different locations. For example, the foreign ministry or supranational organisations need people in every country they run consulates/embassies/offices; airlines or export oriented businesses might need people in different locations - they should be paid depending on the local cost of living (and depending on that, the employer might choose to send more or fewer people there).

But for remote work, ie work that can be done anywhere at the discretion of the employee, why should there be any connection?

As it happens, this would create an incentive for employees to move to cheaper locations, and thus alleviate pressure on the housing market in the most expensive locales, and raise salaries in cheaper parts of the world.

Arbitrage tends to reduce differences/inequalities, in this specific case as well as in general.

Re: Ask HN: Should a remote employee’s salary be tied to their physical location?

#24

Post by [deleted] »

newsbinator wrote: post #3

Yes, and it should also be tied to their spouse's income, their sex, gender, age, and skin color, to keep things fair. Perhaps their sibling's/ancestor's income too. Make sure you account for all these factors to keep things equal. But if you're not able to account for all these factors, why not determine what an employee at a given level is worth to the company, and pay that amount to anybody who can successfully co…

[deleted]

Re: Ask HN: Should a remote employee’s salary be tied to their physical location?

#25

Post by tharne »

R0b0t1 wrote: post #7

No. Scaling income with CoL is just subsidizing the housing costs of people who want to live in more desirable locations. If someone wants to spend part of their compensation on living in a nice area, fine. But if someone else would rather take that compensation and live in a lower CoL area then let them.

That's an interesting perspective and one I'd never really considered. But I guess you could put choice of living location in the same bucket as choice of car, clothes, etc.

Re: Ask HN: Should a remote employee’s salary be tied to their physical location?

#26

Post by pmiller2 »

First, what do you mean by “should”?

In the predictive sense, if a company can hire a remote employee to do a job for $X per year, or a different remote employee to do the job equally well for $0.9X per year, the rational economic choice is to prefer the lower paid employee.

In the normative sense, the employee is selling their ideas and labor. Those things don’t change in value when they move, at least not within the same time zone. So, if you’re selling your labor and ideas in one location vs another in the same time zone, you “should” get the same no matter what.

We all know which of these scenarios actually happens in real life, and it’s because the power disparity between employee and employer is so skewed in favor of the employer. And, as I’ve alluded to, time zone can change things, because having an employee whose normal work hours allow them to respond to incidents that would be happening in the middle of the night can be valuable. Conversely, if a company depends on synchronous communication, having work shifts overlap is valuable.

Re: Ask HN: Should a remote employee’s salary be tied to their physical location?

#27

Post by air7 »

Higher salaries are not compensations for higher CoL but rather both are a result of more demand to live in a certain area (partially because of there being many jobs but that's unrealated).

If a company wants to attract talent in an area with a lot of competition it has to raise its salary offers. And rent goes up in the same way.

So no, it's fair (in some sense) to offer people different salaries based on their location (when work was on site) but that's part of the personal negotiations that take their other options (or lack there of) into account, but it's not some kind of automatic compensation you can demand or expect and with remote work its becoming more and more irrelevant.

Re: Ask HN: Should a remote employee’s salary be tied to their physical location?

#28

Post by s1t5 »

newsbinator wrote: post #3

Yes, and it should also be tied to their spouse's income, their sex, gender, age, and skin color, to keep things fair. Perhaps their sibling's/ancestor's income too. Make sure you account for all these factors to keep things equal. But if you're not able to account for all these factors, why not determine what an employee at a given level is worth to the company, and pay that amount to anybody who can successfully co…

> determine what an employee at a given level is worth to the company

Nobody does this. It's not even possible apart from the most contrived cases. Salary is determined by a number of factors none of which have anything to do with the employee's worth to the company.

Re: Ask HN: Should a remote employee’s salary be tied to their physical location?

#29

Post by irrational »

Should someone be paid more if they move to an area with a higher cost of living, even if they started in an area where they were making a lower salary?

If I move from nowhere, KS to NYC or SF, should my salary quadruple (or more)?

Hmm, if so, how hard would it be to game the system and only make it look like you moved to an area with a high CoL?

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