This debate has come up at my place of work recently: Should the area where someone lives impact their salary if they are working as a remote employee? Should someone be paid less if they move to an area with a lower cost of living, even if they started in an area where they were making a higher salary?
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.
> 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.
Exactly.
The salaries in some countries (e.g. India) are so low that it befuddles me. In smaller cities in India, software engineers actually make closer to around $4K a year, and new grads with no experience start at around $2.5K a year.
Compare that to the new grad pay rate of $180K+ at Google. Also, a close friend of mine at Google makes over $400K.
In some cases, the pay gap is literally 100X. E.g. in the US, it's $400K, and in India, it's $4K.
Why?
This pay gap makes no sense.
And, you're right. As soon as the same dev from India comes over to the US (and gets a Master's or directly comes on an H1B), their pay goes from $4K to $200K. (Another friend of mine moved here from India, and is making over $200K now.)
Why are salaries so far apart, even with all the tech we have today? Doing remote work over the Internet is so easy.
> 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.
To me COL adjustments are a proxy for the underlying metric of replacement cost. Employers are not going to pay someone more than the cost to replace them. For a lot of professionals this is dictated by their local employment market and COL is an easy way to approximate this.
However not every skillset is tied to local markets. My own job is fairly niche and the hiring pool is on a national level. If I moved to a low COL area my employer would have no leverage to reduce my compensation because they couldn't replace my skillset at that price. But that means the converse is also true. If I moved to a high COL area I would be laughed out of the room if I asked for more money. They could easily replace me for the current price regardless of where I chose to live.
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?
I think the relationship of geography to salary is going to be dictated by the biggest factors in all pricing -- supply and demand. Cost of living adjustments are really just a proxy for acknowledging that a prospective remote worker in Des Moines will have fewer local opportunities (lower demand) than a similar worker in New York, and so will be in a less favorable negotiating position. If remote work continues to grow (thus making demand between geos more similar), the differences between locations will begin to diminish, of course.
I sometimes wonder if I worked for a company that was fixated on cost-of-living-based salaries, and I decided to move up to Aspen (high CoL, but low demand for software engineers) if I would get a commensurate increase in pay. I'm guessing probably not. ;)
Exactly this. We can talk all day about whether it's fair for companies to pay people in low COL locations less. But if a company can get the same work output from two different people at two different prices, that's an opportunity that the hidden hand of the market will find and close.
Wouldn’t this mode breakdown when more than two companies want a given remote employee? Presumably companies paying Bay Area salaries and still making healthy profits means that they can afford to pay high salaries irrespective for talent.
This seems to be true insofar as companies can’t collude, either implicitly or explicitly, to suppress remote wages.
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.
But we're not paid by CoL, rather, the job market. If I move to a very small but expensive village, I'm not going to get paid more than being in London. Silicon Valley is just a weird edge case where there's so much talent in one place that it's affecting CoL.
Regardless, there's always going to be a premium on in-person talent.
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.
It's interesting to look at the inverse... would/should the company pay more if someone moved from a low to a high CoL place?
Obviously SV companies offer high salaries because they want to attract people to work on-location, which means they'd have to live nearby, in a high-CoL area. If the job was made remote with the same salary offer, there would be so many candidates, that it would make sense to lower the salary offer, like in any supply-demand problem...
I don't think it's a matter of "should", it's a question of what an employee is willing to accept and what a company is willing to pay.
It's been my experience that if you don't offer higher salaries to folks living in high cost areas, they simply won't come work for you.
My guess is that over time as remote work becomes more common, the cost of living differentials between places (at least in the US) will start to flatten, though it may take quite some time.
No, it should be (and basically is) based on the distribution of salaries available to that employee in the market she or he has access to. This means locally available jobs, as well as remote ones within a couple timezones/with compatible language/culture. In the US, as the pool of remote jobs gets larger I expect salaries to normalize to somewhere between "bay area" and "rural midwest".
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.
Then ask another question, should your employee earn more than say a well experienced neurosurgeon?
What will be the effect on the local economy and society, when a junior programmer right out of university will earn more than critical services to society?
Would the company pay more if you moved into a better place (bigger house, nicer neighbourhood with better schools, etc.) that happens to be more expensive to live in? I very much think not.
So no, they shouldn't adjust downwards for that family of reasons either.
I see the point of taxes being raised, so that's fair, but really I'd expect that, before taxes and other required benefits and deductions, the salary being offered should be the same. I can't see how one could reasonably rationalize that one worker is delivering less value to the company simply because they live somewhere different than the other.
>I can't see how one could reasonably rationalize that one worker is delivering less value to the company simply because they live somewhere different than the other.
I can definitely _see_ how one could make that argument. In some cases there is absolutely value that comes from in-person interaction. I'd argue it's far less than the salary difference between someone in Little Rock, AR and the Bay Area, though.
If an employer wants to make the case that there's value to in-person interaction, I don't think that's particularly outlandish, and it forces them to put a number on how much they value those interactions, which can then be benchmarked and tested.
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.
In a well functioning labor market, employee should earn more than the minimum they would accept to do the job and employers should pay less than the employee is making the firm.
Who gets what share of that surplus value from the transaction is a negotiation. Arguments about what's fair and other normative statements are definitely an effective way to influence those negotiations.
If an employee does something to earn a company a lot more money, they're not automatically entitled to that additional income, but they have a lot more room to negotiate their compensation. The same goes for assumed changes in an employee's reserve price.
Even from a purely self-serving perspective, it is worth considering that offending employees or colleagues is liable to change morale and output before they leave. Additionally, the rising acceptance of remote work doesn't just mean that there are new considerations about living expenses, it means that companies aren't just competing with local companies for talent. That star employee who has just moved to a cabin in the woods could very well have more options in 2020 than they did in 2019.
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.
> Just let it happen and see what the attractor becomes for this large, dynamical system.
I think the problem with this stance is that "this large, dynamical system" actually determines whether people have food to eat. Playing experiments with the labour market is extremely unethical in my opinion.
It already is. If it’s legal to give you a pay cut cuz you’re not coming to the office anymore it’ll get done. If they can force it on you because you have no choice they will. Remember business don’t exist to be fair. They exist to make money. This is not evil.
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.
"Should" is one of those words that means less and less the more you look at it.
One way to define it is, "Do employees like it?"
If you accept the premise that markets are good at finding optimal prices where "optimal" means "greatest aggregate satisfaction of all participants", and you believe that the job market is relatively efficient, then it means you can trust the job market to answer your "should" question for you.
(It's OK to not accept these premises, of course, or to partially accept them. Personally, I think the job market is somewhat efficient. There are lots of both buyers and sellers. There is a fair amount of information available to all participants. However, switching costs are pretty high, which artificially disincentivizes job hopping.)
You might assume that employees would not like it because they'll get paid less in a cheaper area. But employees in more expensive areas will get paid correspondingly more. And, if your goal is to maximize total happiness across all employees, you'll probably find that yes, it makes sense for salary to vary based on cost of living.
Another definition is "Is it good for society?" In other words, what incentives does this choice create, and do we like the consequences of incentivizing that?
Salaries that do not take cost of living into account are essentially pay raises for living some place cheaper and pay cuts for living some place more expensive. That incentivizes people to move to cheaper areas.
That could be a good thing for the US. Ever since our ag industry automated and our manufacturing industry moved overseas, we have lost most of the forces pulling people towards smaller cities. The result is an increasing concentration in a few metro areas not designed to handle that population. This in turn creates a bunch of knock-on effects: greater homelessness, greater economic sorting where people rarely interact with people outside of their economic level, and increasingly painful commutes for lower income people.
An incentive to mitigate that and encourage Americans to move out of the big cities could be a good thing.
Pay raise and pay cut are not justified descriptions. Given folks can live where they like, its simply a choice of where you want to live, vs what you can afford.
I agree that work and location will be decoupled for information workers, because the modern world is going that way. Its just something we'll have to adapt to.
The question feels too open ended in the sense that there is no baseline premise on how the adjustment is being made. Cost of living varies greatly, can change at different rates, and if you're talking about the US, there are some aspects of your pay that aren't directly reflected in your salary - health benefits.
Let's take that latter point as an example. Health care plans differ per state and you are usually better off having your health care plan be from the state you are living in. At all the companies I've worked at, the plan is usually from the state where they have their HQ and subsequently, most employees. If you live in a branch office, that means your plan isn't as useful to you (this actually factored into comparing similar offers to me recently).
Now an employee moving knows the risk and how this will affect their coverage. For a company to adjust their salary based on where they live, how will they take this into account? Are they going to do a per-state/per-city level analysis of say, how their provider network coverage differs? Then pay you more if your coverage is worse off?
I'm not a risk taker, but I'd be willing to bet that most debates won't take something like this into account. However, this and many other factors matter a lot in determining what is considered "fair" compensation for a given area. If the premise of what a fair adjustment is cannot be established, then I believe that this isn't even a debate because the hypothetical reduces to, "what excuse can we use to cut someone's pay?"
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.
During hiring, it makes lots of sense. A Kansas candidate could certainly accept a lower-paying job than an SF one. It makes less sense when you move while already employed, since the cost of re-hiring would greatly exceed the delta they might save. I guess it becomes a question then of are you willing to put your job on the line and demand the identical salary.
If the salary is already negotiated, it'd be extremely demoralizing for the company to force the employee to take less. A company that's willing to pay less because one lives somewhere else after one has proven oneself is a company that has the least engaged, most demoralized employees possible. The productivity lost is undoubtedly many times higher than what was saved in COL adjustments. It's amazing how brain dead most companies are, so focused on intermediate goals to the major detriment of the entire company's progress. This is one prime example. Another is not giving yearly raises, at least to adjust for inflation. Or lowering benefits. If the benefits are still good, people will stick around and put in the minimum.
[+] [-] screye|5 years ago|reply
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.
[+] [-] winter_blue|5 years ago|reply
Exactly.
The salaries in some countries (e.g. India) are so low that it befuddles me. In smaller cities in India, software engineers actually make closer to around $4K a year, and new grads with no experience start at around $2.5K a year.
Compare that to the new grad pay rate of $180K+ at Google. Also, a close friend of mine at Google makes over $400K.
In some cases, the pay gap is literally 100X. E.g. in the US, it's $400K, and in India, it's $4K.
Why?
This pay gap makes no sense.
And, you're right. As soon as the same dev from India comes over to the US (and gets a Master's or directly comes on an H1B), their pay goes from $4K to $200K. (Another friend of mine moved here from India, and is making over $200K now.)
Why are salaries so far apart, even with all the tech we have today? Doing remote work over the Internet is so easy.
Makes no sense..
[+] [-] tmaly|5 years ago|reply
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.
[+] [-] kyteland|5 years ago|reply
However not every skillset is tied to local markets. My own job is fairly niche and the hiring pool is on a national level. If I moved to a low COL area my employer would have no leverage to reduce my compensation because they couldn't replace my skillset at that price. But that means the converse is also true. If I moved to a high COL area I would be laughed out of the room if I asked for more money. They could easily replace me for the current price regardless of where I chose to live.
[+] [-] jdm2212|5 years ago|reply
That's not quite it. In SF/Seattle, you'll have either high-paying opportunities you can take instead if you're in software.
Plenty of people who aren't in software live in SF/Seattle and accept very low pay despite the high COL.
[+] [-] jbob2000|5 years ago|reply
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?
[+] [-] simmons|5 years ago|reply
I sometimes wonder if I worked for a company that was fixated on cost-of-living-based salaries, and I decided to move up to Aspen (high CoL, but low demand for software engineers) if I would get a commensurate increase in pay. I'm guessing probably not. ;)
[+] [-] paulgb|5 years ago|reply
[+] [-] alextheparrot|5 years ago|reply
This seems to be true insofar as companies can’t collude, either implicitly or explicitly, to suppress remote wages.
[+] [-] R0b0t1|5 years ago|reply
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.
[+] [-] cameronbrown|5 years ago|reply
Regardless, there's always going to be a premium on in-person talent.
[+] [-] tharne|5 years ago|reply
[+] [-] netsharc|5 years ago|reply
Obviously SV companies offer high salaries because they want to attract people to work on-location, which means they'd have to live nearby, in a high-CoL area. If the job was made remote with the same salary offer, there would be so many candidates, that it would make sense to lower the salary offer, like in any supply-demand problem...
[+] [-] tharne|5 years ago|reply
It's been my experience that if you don't offer higher salaries to folks living in high cost areas, they simply won't come work for you.
My guess is that over time as remote work becomes more common, the cost of living differentials between places (at least in the US) will start to flatten, though it may take quite some time.
[+] [-] sbrother|5 years ago|reply
[+] [-] FabHK|5 years ago|reply
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.
[+] [-] lanstein|5 years ago|reply
Obviously not, and if you don't do it in that scenario, you don't do it in any scenario.
For reference, we're entirely distributed, no offices.
[+] [-] yokaze|5 years ago|reply
What will be the effect on the local economy and society, when a junior programmer right out of university will earn more than critical services to society?
[+] [-] dspillett|5 years ago|reply
So no, they shouldn't adjust downwards for that family of reasons either.
[+] [-] SketchySeaBeast|5 years ago|reply
[+] [-] graerg|5 years ago|reply
I can definitely _see_ how one could make that argument. In some cases there is absolutely value that comes from in-person interaction. I'd argue it's far less than the salary difference between someone in Little Rock, AR and the Bay Area, though.
If an employer wants to make the case that there's value to in-person interaction, I don't think that's particularly outlandish, and it forces them to put a number on how much they value those interactions, which can then be benchmarked and tested.
[+] [-] lhorie|5 years ago|reply
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.
[+] [-] rz2k|5 years ago|reply
Who gets what share of that surplus value from the transaction is a negotiation. Arguments about what's fair and other normative statements are definitely an effective way to influence those negotiations.
If an employee does something to earn a company a lot more money, they're not automatically entitled to that additional income, but they have a lot more room to negotiate their compensation. The same goes for assumed changes in an employee's reserve price.
Even from a purely self-serving perspective, it is worth considering that offending employees or colleagues is liable to change morale and output before they leave. Additionally, the rising acceptance of remote work doesn't just mean that there are new considerations about living expenses, it means that companies aren't just competing with local companies for talent. That star employee who has just moved to a cabin in the woods could very well have more options in 2020 than they did in 2019.
[+] [-] vbtemp|5 years ago|reply
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.
[+] [-] lotsofpulp|5 years ago|reply
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.
[+] [-] p0llard|5 years ago|reply
I think the problem with this stance is that "this large, dynamical system" actually determines whether people have food to eat. Playing experiments with the labour market is extremely unethical in my opinion.
[+] [-] holografix|5 years ago|reply
[+] [-] air7|5 years ago|reply
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.
[+] [-] R0b0t1|5 years ago|reply
[+] [-] munificent|5 years ago|reply
One way to define it is, "Do employees like it?"
If you accept the premise that markets are good at finding optimal prices where "optimal" means "greatest aggregate satisfaction of all participants", and you believe that the job market is relatively efficient, then it means you can trust the job market to answer your "should" question for you.
(It's OK to not accept these premises, of course, or to partially accept them. Personally, I think the job market is somewhat efficient. There are lots of both buyers and sellers. There is a fair amount of information available to all participants. However, switching costs are pretty high, which artificially disincentivizes job hopping.)
You might assume that employees would not like it because they'll get paid less in a cheaper area. But employees in more expensive areas will get paid correspondingly more. And, if your goal is to maximize total happiness across all employees, you'll probably find that yes, it makes sense for salary to vary based on cost of living.
Another definition is "Is it good for society?" In other words, what incentives does this choice create, and do we like the consequences of incentivizing that?
Salaries that do not take cost of living into account are essentially pay raises for living some place cheaper and pay cuts for living some place more expensive. That incentivizes people to move to cheaper areas.
That could be a good thing for the US. Ever since our ag industry automated and our manufacturing industry moved overseas, we have lost most of the forces pulling people towards smaller cities. The result is an increasing concentration in a few metro areas not designed to handle that population. This in turn creates a bunch of knock-on effects: greater homelessness, greater economic sorting where people rarely interact with people outside of their economic level, and increasingly painful commutes for lower income people.
An incentive to mitigate that and encourage Americans to move out of the big cities could be a good thing.
[+] [-] JoeAltmaier|5 years ago|reply
I agree that work and location will be decoupled for information workers, because the modern world is going that way. Its just something we'll have to adapt to.
[+] [-] hysan|5 years ago|reply
Let's take that latter point as an example. Health care plans differ per state and you are usually better off having your health care plan be from the state you are living in. At all the companies I've worked at, the plan is usually from the state where they have their HQ and subsequently, most employees. If you live in a branch office, that means your plan isn't as useful to you (this actually factored into comparing similar offers to me recently).
Now an employee moving knows the risk and how this will affect their coverage. For a company to adjust their salary based on where they live, how will they take this into account? Are they going to do a per-state/per-city level analysis of say, how their provider network coverage differs? Then pay you more if your coverage is worse off?
I'm not a risk taker, but I'd be willing to bet that most debates won't take something like this into account. However, this and many other factors matter a lot in determining what is considered "fair" compensation for a given area. If the premise of what a fair adjustment is cannot be established, then I believe that this isn't even a debate because the hypothetical reduces to, "what excuse can we use to cut someone's pay?"
[+] [-] pmiller2|5 years ago|reply
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.
[+] [-] symmitchry|5 years ago|reply
[+] [-] allsystemsgo|5 years ago|reply
[+] [-] mnm1|5 years ago|reply