[ThePawnBreak]

Obviously market forces should dictate what an employee should be paid, but I think the problem here is what we consider the market to be. If you are hiring remote employees from all over the world, the markets you are hiring from are not San Francisco, New York, London and Bordeaux, it is just one market, the global remote employees market (excluding timezone considerations).

I would define an employer market as the set of all the employers that a given employee is willing to work for, should he receive a competitive offer. Some Canadians really want to stay in Canada and therefore their market is Canada, others don't mind moving to the states and therefore their market is Canada+US (and obviously they move to the US). Canadian employers claim to pay "market rate", when in fact they only do so for employees unwilling to emigrate.

If you have a remote employee making $30k a year in Krakow, and he gets offered $150k by a SF startup that really likes him, can you reasonably argue that he was paid market wages, and now he's overpaid? I'd say that his market value is now $150k on the remote market, and if a different employer wants to poach him they need to compete with that.

I would expect a rational employer to set a hiring bar and then keep on hiring people and raising salaries until they can hire as many people as they need. Regardless of whether that turns out to be $40k or $120k (obviously depending on productivity, salary can't grow forever). What I think is happening here is that employers (and their friends and first employees) are making an emotional decision to somehow justify them being "worth" their salaries, and almost always scale salaries down but never up, effectively hiring from their market and less competitive ones. Then they start justifying this as being "fair" and "based on cost of living", when in fact it doesn't have anything with those at all.

[baddox]

> I would define an employer market as the set of all the employers that a given employee is willing to work for, should he receive a competitive offer.

Isn't that a mostly circular definition? The competitive offer from a less desirable employer would simply be higher than it would be for a more desirable employer.

[ThePawnBreak]

That wasn't very clear, let me clarify what I mean.

Let's say Bob is a programmer and always loved games, and only wants to work for game companies. Let's also say that game companies pay roughly $50k, and the Google office down the street pays roughly $200k. The market rate for Bob is $50k, not $200k, because he is unwilling to work for Google (since it's not a game company) and they are therefore not part of his market. His market is only game companies.

I think examples of this happening are: - game programmers making considerably less so than other programmers simply because their employers can pay less and still get enough applicants - big tech companies paying through their nose because a lot of people are unwilling to put up with their hiring process bullshit - finance companies in London paying a lot because a lot of people don't want to touch them

So for programmer Joe, the market is the intersection of companies which would hire Joe and companies which Joe is willing to work for.