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

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

#51

Post by lotsofpulp »

vbtemp wrote: post #11

I don't think anyone knows the right answer. Try it. Maybe they'll stick around. Maybe they'll stick around and be disgruntled. Maybe they'll leave and find another job that isn't trying to cut their pay Just let it happen and see what the attractor becomes for this large, dynamical system.

The right answer is whatever price lets you sell a product at prices that people will buy.

Company A that keeps paying SF level pay competing against Company B that lowers its payroll costs might be at a disadvantage if it can’t price products low enough to compete with company B.

Of course that depends how interchangeable products from company A and B are, but obviously for things like clothing, plastic products, and electronics, US companies could not afford to be competitive while paying US wages.

So far, software companies have been spared this international competition due to the lack of similar quality products from elsewhere, but that doesn’t need to be true forever.

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

#52

Post by bane »

Whenever this topic gets brought up, it invariably is seeking big-city pay in small-town locations.

The more important question is this: suppose we live in a world where all remote employees make essentially the same. Why wouldn't an employer simply choose to pay the absolute bottom rate salary for an employee living in the absolute cheapest possible location and not pay more for people living in significantly more expensive locales?

It can also be very enlightening to look at the US Government GS Pay schedule, which sets a base salary at specific employment levels, then has a page of secondary schedules with "locality pay differences" depending on location. For example, a USG in NYC makes about 34% more than the base salary for living in Podunk, Mississippi.

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

#53

Post by keiferski »

The thing is, salaries are only high because they are based on geography. The extreme cost of living in SF and NYC contributes to the high salaries in the respective cities. If the COL were lower there, the salaries would never have become so high.

It is counter-intuitive, but I actually think everyone benefits from super high salaries in coastal cities, as it makes the benchmark rather high and thus even non-coastal employees benefit from a high expectation of a ‘proper’ salary. In other words, I’d FAANG were paying devs $50,000 a year in SF, there’d be zero chance that a dev in Iowa or Missouri would be making anywhere close to that.

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

#54

Post by lotsofpulp »

bsenftner wrote: post #33

Of course, there are two correct answers: those employees able to negotiate away their location having any relevance to their pay, and those who due to hierarchy position or lack of negotiating skills have their pay pro-rated against their location and potentially a giant host of additional factors beyond the employee's control. The course of action is clear: learn to negotiate.

>The course of action is clear: learn to negotiate.

I think learning to negotiate is second to selling something which you have multiple buyers to choose from and few competing sellers. If that’s not the case, you won’t be able to negotiate in the first place, and you need to figure out something else to sell.

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

#55

Post by jbob2000 »

screye wrote: post #21

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 l…

Salary is about how easy you are to replace, and nothing else.

Remote workers are easy to replace because you can go all around the world to find someone to do the work. Why pay COL to someone in Mississippi when you can pay much less for someone in India?

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

#56

Post by graerg »

nell wrote: post #46

What if we invert this. Assume the company pays the same irrespective of location. Should an employee in SF or NY have a lower standard of living compared to an engineer who lives in a low COL area?

I know this is a rhetorical question but the affirmative answer isn't entirely unreasonable. If an engineer can deliver the same value from remote then maybe yes, they should bear the cost burden of living in NY or SF.

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

#57

Post by tmaly »

screye wrote: post #21

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 l…

> Everything points towards companies historically paying employees not the salary they deserve, but the salary they will accept.

You hit it on the head. This is exactly what is happening. This is why people job flip every 2 years to increase their salary. Getting good at negotiation is critical if you are job searching.

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

#58

Post by lhorie »

No offense, but your question is loaded. To see why, think about it this way: say you work for a company in Bangladesh and want to live in San Francisco. Should you be paid a Bangladesh salary? Not looking so appealing anymore, right?

So let's say salary didn't get tied to physical location. What's then stopping employers from moving headquarters to Bangladesh and then announcing everyone gets a pay cut? What happens with taxes and the social services funded by those taxes if suddenly everyone's incomes are dictated by how cheap a salary baseline a company can find worldwide?

Now, we all know what you're thinking. Obviously what you want is to work for FAANG and make FAANG salaries, but live somewhere cheap to end up with more money in your pocket. However, you need to realize that in order for this to work, it needs to be an exception to the rule. If the default is that everyone gets to do it, then you can bet companies will get in on the loopholes and screw you over big time.

So, should a remote employee's salary be tied to their physical location? Yes, they should (and they are). But not because it's better for everyone, but because the world isn't fair and you are proposing that you want a world where you can take advantage of its unfairness.

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

#60

Post by elbear »

bradstewart wrote: post #47
bboygravity wrote: post #32

Earlier quoted context omitted.

> 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 communicate & do the work, regardless of their circumstances or physical attributes? Sounds good to me. I'd be a retired millionaire at age 30 something if any of the companies I've worked for (remotely or otherwise) followed that l…

> I'd be a retired millionaire at age 30 something How do you know what value the companies would assign to those factors?

"> 15 years contracts worth millions per client" would be a start.
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