Ask HN: Location based pay is killing my motivation, how do others handle it?

Get a counteroffer. If your company likes you, they'll match it. If they don't, you can accept the offer and get that amount of money. Basically 0 downside for you.

I think there are a lot of companies that do location-independent pay, so you should look into interviewing at one of those. My impression from a cursory look at what I see on these companies blogs is that they skew very low for someone that lives in New York or San Francisco, but that doesn't seem to be your situation.

Another option is to just move. I think you come out ahead, as pay seems to linearly scale with the cost of living change, but many expenses are fixed. (For example, nobody says "every software engineer should have $1650 for their 401k, $3000 in pocket change, and whatever the average rent is in their city of choice". They say "We aim for $200k in NYC" and if housing is 50% cheaper somewhere else, pay you $100k. That means your 401k, pocket change, etc. scale down proportionally, and that's the part that's unfair. So move to San Francisco!)

You could also find a company that pays more in your desired location. Google's software engineers in Madison, WI probably get paid more than some random startup in Brooklyn, NY. Even if it's location based, you can still get yourself more money.

Finally, if you're contracting, nobody really needs to know what city you live in. For full time employees it's tough to lie about this because of taxes, and of course fraud is a crime. I definitely know of people that claim to live in Pennsylvania but actually live in New York City, for tax reasons. This is fraud and is illegal, but people do do it. Maybe location-based pay tips the scale towards "meh, I can do 5 years in prison with 10% probability". I'd personally avoid going down that road. If you're a contractor, though, nothing stops you from starting a company in a high cost area, billing through the company, and never mentioning (except to tax authorities) where you actually live. Again, I wouldn't recommend this as it sounds like a huge hassle, but everything can be gamed. The upside of contracting is that you're negotiating your compensation several times a year, instead of a handful of times throughout your career. The downside is that if nobody really needs your skills, you make $0 for that period of time, which can be pretty rough.

I think my TLDR is that I'm guessing you don't actually love your job, so you should probably find a different one. That's how you get paid more as a software engineer. Some employers keep their fingers on the pulse of the market and give you raises to keep your compensation within the %-ile that they decided, but 99.99% don't. So, you find a new job every 2 years. That's their fault, not yours. I worked at one of the 0.01% that did keep refreshing comp as the industry landscape changed, without me ever asking, and that was the job I worked at longest.

I'm emotionally with you, however the OP is right in that the GP most likely doesn't have any options other than quitting and going to a company that doesn't do this

OP is also correct in that the following is how HR at almost every large company thinks about comp:

1. Comp is usually not set by a Hiring Manager and is specifically based on "comparable" which is based on job type and location.

2. Job type and location is by far the easiest way to create a heuristic for pay rates because the data is public

It's basically impossible to individually value everyone's contribution consistently and without bias across hundreds or thousands of employees - plus I don't think people would want to actually be judged with any method that puts granular measurement on something as vague as "value"

So if you can come up with a better way to determine pay *at scale* other than the open market approach, I'm super interested.

The only way to do this in my mind is to never pass -- lets say -- 100 employees.

How do you judge ‘contributed less’? More senior people generally have more skill and a better understanding of the product, making them more able to make decisions that carry much more value to the business than labor from non-senior employees

    I've raised this issue with my manager and they've told me that I can 
    transfer if i want those pay scales but that's not a possibility for me. If 
    the company is willing to pay me that amount in a different location, why 
    can't it pay me the same here?

Get another offer or several and then have this conversation again. The equation changes considerably for your manager when you are talking about leaving for a better offer. Right now he has you as an employee for a price that saves him money. When you have another offer he has to weigh losing the knowledge you have built up about the job and the business, Locating, Interviewing, and Hiring a replacement against paying you a higher wage.