VMware Cuts Pay for Remote Workers Fleeing Silicon Valley • Hacker News Board

Re: VMware Cuts Pay for Remote Workers Fleeing Silicon Valley

#21

Post by [deleted] » Sat, Sep 12, 2020, 4:51 PM UTC

counterpoint1 wrote: post #17

toomuchtodo wrote: post #8

Earlier quoted context omitted.

An argument for higher corporate and (progressive) personal income tax rates.

This is the most depressing, dystopian desire. Taxes are necessary to fund shared infrastructure and services. They're not supposed to overtly punish success or prevent people from earning a high salary. There's an argument that high earners can (and possibly should) pay a higher share of taxes because they have the most ability to do so, but you seem to be just advocating taxing away people's earnings out of a jealo…

[deleted]

Re: VMware Cuts Pay for Remote Workers Fleeing Silicon Valley

#22

Post by causehealth101 » Sat, Sep 12, 2020, 5:06 PM UTC

a3n wrote: post #5

I thought people in SV are paid what they're paid because they're uniquely qualified and productive, making their employers extremely profitable, or salable. Is that no longer true when they don't sit in a SV chair?

The unfortunate reality is that you're worth the same as what the next qualified person is willing to accept.

Compensation is determined by the local cost of labor: if a competing candidate is living in North Dakota and willing to accept 30% less, then that's what they'll pay.

Re: VMware Cuts Pay for Remote Workers Fleeing Silicon Valley

#23

Post by amscanne » Sat, Sep 12, 2020, 5:18 PM UTC

harshitaneja wrote: post #16

amscanne wrote: post #11

Earlier quoted context omitted.

It’s funny: I don’t know where people get the idea that people are paid based on the value they produce. People are paid based on the amount they command in the labor market, and labor markets are local (and if they produce less value than they command, there’s no hire). It works like nearly every other economic transaction. Engineers cost more in the valley because there is far more competition to hire them, not bec…

While I agree that there is dissonance between value produced and salary paid, but your argument doesn't seem to hold as well.If higher competition drives salaries upwards then the salaries should increase in a remote worker economy as worker pool is not bound to a geographical locality but rather to the whole planet(or at least a larger region if culture or timezone differences are major concerns). Economics of dema…

There are still very few companies that want to hire pure remote, so demand is low. This might all change: supply goes up as people go remote, demand goes up as companies look to hire remotely. It’s unclear what this market will look like, but I sincerely doubt it will mean higher compensation than the current Bay Area salaries.

Cost of living has nothing to do with it. The density of employers (and capital) in the valley plus a desire to hire locally leads to high compensation. This leads to engineers moving to the valley. The high density of high earners and demand for housing is what is responsible for the high cost of living in the Bay Area, not the other way around (high costs of living leading to high compensation).

Re: VMware Cuts Pay for Remote Workers Fleeing Silicon Valley

#24

Post by Unknoob » Sat, Sep 12, 2020, 7:57 PM UTC

znpy wrote: post #3

meh. If your cost of life gets more than 18% cheaper by moving somewhere else, one could seriously consider taking the hit. And that one probably should. If anything, you'll get those money back in the next job hopping session. But now you're permanently remote and can use that as leverage in your next job offer negotiations.

But shouldn't the cost go down for the company as well? Now they no longer need to use office space to accommodate you or provide you with a space to eat/bathroom/take breaks. Rent in the valley is a nightmare and companies could save a lot by not needing a physical space for the entire workforce.

Re: VMware Cuts Pay for Remote Workers Fleeing Silicon Valley

#25

Post by PaulHoule » Mon, Sep 14, 2020, 1:35 PM UTC

amscanne wrote: post #11

a3n wrote: post #5

I thought people in SV are paid what they're paid because they're uniquely qualified and productive, making their employers extremely profitable, or salable. Is that no longer true when they don't sit in a SV chair?

It’s funny: I don’t know where people get the idea that people are paid based on the value they produce. People are paid based on the amount they command in the labor market, and labor markets are local (and if they produce less value than they command, there’s no hire). It works like nearly every other economic transaction. Engineers cost more in the valley because there is far more competition to hire them, not bec…

In theory a business that was paying somebody $8 to create $800 of value would have an incentive to pay a lot of people until either the $8 increases or the $800 decreases. If they didn't do it, somebody else would.

Vice versa a business that paid someone $8000 to get $800 worth of value might be able to sustain it (it can divert $7200 from something else) but won't be able to scale it.

People who want to sound reasonable might talk about figures like $790 and $810 but that guarantees you will be in the weeds because you never know exactly where to "charge" things. For instance, a firm invests in equipment for a worker, worker B fills in the gap when worker A slacks off, etc. Even in areas where it is widely believed you can measure productivity (e.g. sales) this is problematic.

I have been looking in the macroeconomics literature but haven't yet found any exploration of the following:

what if an organization has a nodal structure such that at each node somebody can divert X% (say 1 for the hell of it) of what goes through the node? The salary of the top man is then basically proportional to the size of the node, so to get mega-rich, a bank president in New York might buy a bank in New Jersey. The node in New Jersey remains, but a buyer of the bank in New York now gets to skim additional cream.

A corollary of that could be that the "competitive advantage" of "productive" urban areas is in theft. In Ancien Regime France you would set up at Versailles because that is where you had connections for thieving. In post-2008 America, Washington D.C. has boomed because it has "comparative advantage" if you want to bribe politicians to help you steal. Certainly in a country like Equatorial Guinea you are going to settle in the capital because that's where you can steal.

Re: VMware Cuts Pay for Remote Workers Fleeing Silicon Valley

#26

Post by amscanne » Thu, Sep 17, 2020, 4:31 AM UTC

PaulHoule wrote: post #25

amscanne wrote: post #11

Earlier quoted context omitted.

It’s funny: I don’t know where people get the idea that people are paid based on the value they produce. People are paid based on the amount they command in the labor market, and labor markets are local (and if they produce less value than they command, there’s no hire). It works like nearly every other economic transaction. Engineers cost more in the valley because there is far more competition to hire them, not bec…

In theory a business that was paying somebody $8 to create $800 of value would have an incentive to pay a lot of people until either the $8 increases or the $800 decreases. If they didn't do it, somebody else would. Vice versa a business that paid someone $8000 to get $800 worth of value might be able to sustain it (it can divert $7200 from something else) but won't be able to scale it. People who want to sound reaso…

> what if an organization has a nodal structure such that at each node somebody can divert X% (say 1 for the hell of it) of what goes through the node? The salary of the top man is then basically proportional to the size of the node, so to get mega-rich, a bank president in New York might buy a bank in New Jersey. The node in New Jersey remains, but a buyer of the bank in New York now gets to skim additional cream.

This is basically how the world works, if you consider each of those nodes a business. The cost to buy that bank though, already factors in the income stream that you’d get from it. Like how you can go buy shares on the public market and receive dividends.