I wish more people would reject zip code COL so that companies starting to WFH don't just take Gitlabs idea of it.
Their calculations and reasoning are completely irrational. Rent is more a lot more in NYC, but utilities are the same; medical costs are the same; groceries are roughly the same (I found them cheaper in Manhattan than in nearby suburbs); you don't own a car (or two, as a couple); you don't have the expense of maintaining a large home and yard; etc. It costs a lot to live in NYC, but you can't compare the rent on a 1BR NYC apartment with a 1BR suburban apartment and say it's three times as expensive. It's a completely different lifestyle, and the choice for people like me is between a shoebox in the city with the perks of city life, or a comfortable 3BR home with a yard in the suburbs and a car and maybe a swimming pool or a boat or something. It's not a cheaper life, it's just a different life.
In the end, I think zipcode (and COL) is a weak proxy for talent. It's very easy to measure zipcode, compared to talent.
But, think about it from the other angle: if you have a history of this talent (earning high salaries in high-COL zip codes or otherwise), why on earth would you accept anything less than that, when moving to a lower COL area?
To me, it seems like a decision that would hurt the employer more than help them, since the people with proven talent would work for companies that don't discriminate on zip codes. And that costs more than the investment in assessing incoming talent levels.
None of the salaries I've seen there seem remotely "senior/architect" level if you want Bay/WA talent.
That's the way I see the company, at least.
My location during any of this transaction bears absolutely zero significance. If I'm worth $300k to generate $5mill for you don't worry about whether I'm living in NYC or on a ranch in Wyoming.
If you're willing to take $60k for a remote job you can make $160k at because that's the actual global market value you're doing all of us in the field a disservice by working for the low COL wage. It's bad enough salaries have barely risen for other fields since the 70s. Our field can work anywhere but we need to make sure we don't let our salaries slide by letting the Gitlab style take hold.
Often on hn I see people thinking they need to take a pay cut to work remotely. You don't! Same thing.
Don't forget that there's a really high competition among applicants so someone will take those 60k offers. And when it's 8-10x their average salary in their home country, then you can't really blame them.
I'm not really serious, I can probably get a better offer from a US company, but it still irks me.
Adjusting by CoL is only good for the employer, if a worker is worth X working remote in SF they're worth the same amount in the middle of nowhere.
But the competition tends to be fiercer in a higher COL area, so you are still not guaranteed even a median pay job in that area if you cannot get it. Many do not. The "higher COL area = higher pay" equation seems magical except it hides that it also includes higher competition.
Of course the competitiveness matters. It informs the level of optionality and leverage they have to negotiate. I would say that it's the only thing that matters. What about the CoL adjustment is weird besides it being reflective of the somewhat ugly and distasteful truth that to the company, you are a human resource and fungible cog? That's what they're paying for.
This employee will have to think about what happens if they do not come to a favorable agreement with their employer. Their BATNA completely depends on 1) the demand of other firms in the area (or remotely) and 2) their relative ability to compete. If they can perform well enough to move to a competing employer in the same locale that pays better, they will.
Care to name some?