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Comment by hackerbabz | Hacker News Reader

Because when I work I produce a product for my employer. My employer sells that product at the same price regardless of where it was produced.

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Indeed. There are two views of employee compensation - you can have people that you compensate as a share of value added/profit share (this is very common for sales:its easy to record who sells what;selling more means more revenue - giving a share of that revenue to the seller aligns goals. In theory, and for commodities; in software you also get sales people that overpromise and lead to developers working themselves into an early grave, never having a hope of satisfying any customers..) - and you can have "wage slaves": people you pay wages to for a share of their time.

In the latter case, from a strictly economic standpoint, you'd prefer workers to pay you (eg us prison labour...).

In a strictly value-add/profit share the more value a worker produce, the higher the compensation and the higher the company revenue.

Now software business (knowledgewwork) is typically somewhere on the scale between these two.

I'd personally say that given gitlab's product and business - they would probably be better off leaning a bit more towards the latter - allow a great softare engineer in rural UK or eastern Europe get (locally) silly rich;and allow those that feel like it to move to less crowded locations without docking their compensation. As long as they only get a share of generated added value, this should be a win-win.

But I am not the owner of gitlab.

This is an amazing response.

It's not true for every industry (e.g. Games), but definitely true for most.

In Gitlab's case it's 100% true.

Games aren’t sold for the same price regardless of where they were produced? Sure they do. They sell for different prices in different places they’re sold, but where they were produced has little impact on the price in each location.

They buy your skill at the market rate, and sell the product at the market rate in a different market.

For an all-remote, international company, "the market" at both ends of that process is "the world".

The fact that I make X here while pay is 4X in SF is the only proof needed to show job markets and pay levels are local.

If a SF company wants to hire me remotely, I'll take the job at 1.5X, so they won't pay more than that. The simple reason is this: If I don't want the job at 1.5X the local pay, I my neighbor does, and he's every bit as good an engineer as I am. When they do hire me at 1.5X my current pay, they have bought my skill at the local market rate.

You make a good point: as an employee you are not the product, you are part of a team — and the team is just one ingredient in the manufacturing of a product. An important ingredient, but not the whole story nonetheless.

Taking that further: as a human you are also part of the physical community that you live in. A developer in a small town might help out the local library, whereas a developer in a big city might organize tech meet-ups to help their peers.

I'm not saying one situation is better than the other, but I can imagine not just different price points, but also different valuations for equal skill depending on location.

But they might sell it at different prices in different markets

Does GitLab apply their regional coefficients to their pricing?

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