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Comment by blizkreeg | Hacker News Reader

I think it's silly (and borderline divorced from understanding how business works) to expect bay area salaries when you're living in Nebraska or Uruguay. After all, when you move to the bay area, you don't say "give me my Kansas salary". No one gets paid that way. Pay is always tied to comparative salaries in that market.

Why should I hire someone and pay them a bay area salary if there are equally talented folks in that geography that are perfectly happy making what's market for _their_ location?

This is only a perspective that highly paid engineers living in the bay area share. The rest of the world doesn't work this way.

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> (and borderline divorced from understanding how business works)

This describes 90+% of HN posters these days, to be fair. You’re absolutely completely right in your argument.

Comp today varies per city because job markets are per city: at every moment each city has a fixed number of applicants and jobs, which creates a market rate.

In the long term with enough companies doing remote work though, this starts to blur the boundaries between job markets and we might expect salaries to start to be affected by other cities, in the same way that different suburbs within a city share the same comp rates.

I'm curious how this plays out in practice. Should every company just start offering bay area salaries to everyone, since bay area salaries are at the top end?

How do you decide what a software engineer salary (since we're talking about pure skill and not location) should be? Is it $30K, $80K, $150K, $400K?

Do you see the problem and why I don't think this will happen?

No, companies offer the least amount and still be competitive with the other employers in the area. This amount currently varies by location because job markets are segmented by city. Over time if job markets spread across cities, then this would change.

> No, companies offer the least amount and still be competitive with the other employers in the area.

If Facebook will now hire permanent remote employees anywhere with excellent internet they are now hiring in the area. They pay new grads in SF $200K a year. If they pay $100K for people with seven years of good experience, Seniors, in Vietnam they will have them all in under six months. Even at $50K the market price of devs will get bid up quickly.

> Should every company just start offering bay area salaries to everyone, since bay area salaries are at the top end?

No, but FAANG and other extremely profitable companies might try it. If you offer Bay Area salaries to everyone who’s currently in a top 20 CS PhD programme and tell them they can live wherever they want you’ll get a pretty good yield. Even better if you make a standing offer to everyone who completes X hard classes on GA Tech’s OMSCS. This wouldn’t be worthwhile if the productivity differential between remote and office was high enough but in the long run wages approach the marginal product of labour absent employer collusion. Might take 20 years but eventually the top end of the market will be getting comparable numbers whether in NYC or Bangor, Maine.

I think you fail to recognize what you’re competing for as an employer. If you just want average engineers from city X, go ahead and pay the reduced wage. However, if you want top talent, you have to pay what other companies are willing to pay and some are willing to pay Bay Area salaries for remote.

When someone good is on the line, it’s not hard to justify the Bay Area salary when you were willing to pay it if they were in the bay.

Source: kept Bay Area salary when moved remote and was able to easily negotiate Bay Area salary at future companies.

That's good for you. And there will always be companies that are the exception. Some companies will do it simply to keep you because they're already familiar with you, know how you work, and have trust built. But it won't be the norm.

I might still say if someone is doing a 6-mo/1-yr temporary change of scenery, it makes sense to not dock their salary. But an actual move and keep my $300K FAANG salary while working in Thailand? I don't see it happening. If the difference is < 20%, may be sure. But a > 50% difference? I doubt we'll see that world. But who knows...stranger things have happened.

Every profession gets paid this way. Tech is no different, or some special snowflake.

Actually if you move to Thailand with your FAANG salary it's likely that the HR team will have a conniption fit. Thailand is--or at least was until recently--considered a prime location for dodging taxes. That is a problem for any company that wants to be SOX-compliant.

Thailand is a different country in a significantly different timezone. That has real administrative and logistics implications. I wouldn’t expect a company to pay me the same in that scenario.

> Some companies will do it simply to keep you because they're already familiar with you, know how you work, and have trust built. But it won't be the norm.

I’ve negotiated into a new company a bay salary and I had never worked with any of them before. The interview was a little extended to talk about remote work background but that was about it.

The problem is most remote employees fold on salary negotiation when the company lowballs them because they don’t know any better. If they company is actively hiring bay area salaries, they enough to offer you the same as remote.

Remember, good tech companies can’t even find enough good employees in the bay. They are realistically just as happy to have a remote employee that’s as good as a local even if it’s for the same price.

You’ll see this standard change pretty quickly once companies realize how many other techs are now remote friendly.

Bay Area SWE salaries are bimodal. Negotiating a high salary that's part of the lower peak (which I'm currently part of) is easy. Doing so for a salary that's part of the second peak is not.

If Facebook or Apple or whoever are still willing to give you 400k+ TC outside of the Bay Area, Seattle, NYC, or Los Angeles, it's because you're truly exceptional. Most people who get around that much in compensation working for those companies in the Bay Area will have to take a reduction in pay if they go to another office in a major city, and an even bigger cut if they go full remote.

I am expecting Bay Area SWE incomes to fall in the next few years, as housing & rent prices fall. But I could be wrong, and they'll continue going up despite cost of living going down. We'll see!

> Why should I hire someone and pay them a bay area salary if there are equally talented folks in that geography that are perfectly happy making what's market for _their_ location?

Right now, you wouldn't. However, if going full remote turns into a trend, then you're not competing with other talented folks in that geography making what's market for their location because they don't have a location, but rather with every other company which offers remote work. They're remote. Won't this drive up market standard prices for engineers in places where markets are less populated by tech right now, while lowering the market price in places like the bay area? After all, if I'm a company, why would I pay $BAY_AREA_ENGINEER more money for the same job I can get done by $KANSAS_ENGINEER for less? Remote work, if taken to the furthest conclusion, will obviate any discussion of "location" based payment because every engineer would be in the same location: the Internet.

See my comment here https://news.ycombinator.com/item?id=23264947

How do you think it will play out?

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