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Comment by icebraining | Hacker News Reader

Setting one market wage worldwide as an employer ensures that you'll not get much (any?) talent from the high-cost locations

I don't see why; it just means you have to set the global wage equal to the ceiling, not the average of all local market wages.

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I think it would be better to set it some degree below the ceiling, not outside of livability for the high-cost locations, but such that it doesn't overly distort the low-average cost locations.

Then it is the individuals choice of paying a portion of the cost for living in a high-cost location, or choosing to live in a lower-cost location and pocketing extra money. This reduction is associated with increased employee flexibility pertaining to their choice of lifestyle. It also might encourage a redistribution of individuals out of the high-cost locations. That would have some benefit (if this was industry standard) to the public in those locations as it could reduce market-demand for housing through redistribution of demand among the broader market.

Even then, you'll be deluged with applicants from low-cost locations where your offer is way above (local) market, and if I were in a high-cost location, I'd not apply, judging your investment/expense management policies to be unsound, as you're paying the highest worldwide wages and still not taking advantage of a co-located team.

As an employer, you're then leaving a ton of money on the table by paying people substantially more than their alternative offers.

That's only true so long as everyone else is only paying local market rate. Once a company starts offering people in Argentina SF-level pay... that company now will get every single qualified developer in that location that they want. So now other companies have to start offering similar wages, or they only get second tier devs. It's called competition.

Sure, but as a company there's not really any incentive to do so.

I could accomplish a similar effect by merely offering 50% more than the prevailing Argentinian developer wage while still realizing substantial savings over SF rates.

...until someone else offers 55%, then you offer 60%... until it reaches equilibrium at approximately 100% (and I understand real life is a lot more complicated than one single salary number)

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