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Comment by klodolph | Hacker News Reader

Every company that I’ve worked for which has offices in the SF Bay area and offices somewhere else has had a location-based adjustment to pay. Every single one.

Honestly, if I exercise my imagination a little bit and try to remember what it was like to live in a city which didn’t have jobs from most of the “big tech” companies, I would have loved to see a greater variety of job opportunities without being asked to move to SF/Seattle/NYC etc. It would have meant that I could get career growth and keep my friends and support network.

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Also if the value and quality of work is the same... shouldn't the pay remain the same.

Also this leads to income inequality. A person from a poor neighborhood/country gets paid less than someone in a wealthy area.

Of course. It also costs less to live there.

it costs less if I decide to cook rather than do take out, should I inform my employer I'm saving more money so they cut my salary.

It's a perverse race to the bottom for the benefit of corporations at the expense of the worker and social income equality.

Your mental model is all wrong. There's no moral calculus being used to determine how much you earn. If you want to think like that, then you'd have a hard time justifying differences in pay for different lines of work, especially since they don't correlate with how much or how hard you work. You don't make more than the guy laying tile because you work harder than him. It's because there's a lot more people who can do what he does than what you do.

Labor is a market. It's supply and demand. All of that stuff you're talking about--the cost of eating out vs. cooking, rent in Silicon Valley vs. Wisconsin--doesn't need to be calculated. The market price for labor in a city is how much you need to offer to get enough qualified people to work for you in that city. People’s preferences, for eating out, for living here or there, are factored in to how much they’re willing to work for.

All employers always want to pay as little as possible. You get paid as much as you do because your labor in your area costs that much. Companies are competing for your labor, if they paid you less, you'd be way more likely to take another job elsewhere.

Now suppose you could move somewhere else and didn't have to pay insane prices just to live in a shithole like San Francisco, but you'd have to take a pay cut - why wouldn't you do it? You'd earn less on paper but you'd have a better life.

> You'd earn less on paper but you'd have a better life

Exactly. "pay" is just a way to afford things that you value. If I can get those things, I'm happy; if not, I'm sad. "pay" is irrelevant unless compared to cost.

Depends on the reference point. Maybe less inequality within a country if it’s in line with other salaries. Just not parity with other countries, but as long as PPP is maintained it’s not bad.

> Also if the value and quality of work is the same... shouldn't the pay remain the same.

Why would this apply to remote workers but not local workers? Are you saying that you should pay convenience store workers the same everywhere, in New York and Lincoln, NE?

You could turn it around, and I’d say that if rent goes up, wages should go up too. People should get CoL adjustments separately from raises. If we get CoL adjustments for inflation over time (you get paid more in 2020 because 2020 is more expensive than 1990) why wouldn’t it also apply to location (you get paid more in NYC because NYC is more expensive than Lincoln, NE).

(I’d also argue that the value & quality of local workers in dense cities is higher.)

if they work for the same company and deliver the same value... yes that is exactly what I'm saying.

The thing is, they’re not paying less for remote workers. They are paying more for local workers living at high cost areas

This is just marketing spin, I’d like to think that the people in this discussion are talking about the merits of a pay differential, and the way you phrase it is not really the point under discussion here.

Categorically, the value of remote workers is lower than the value of local workers.

This is largely due to network effects and the higher efficiency of communication with co-located teams. I’m a software engineer, and like other software engineers, my job is something like 50% communication and 50% coding/testing/operations. As you go up in seniority and expertise, the ratio shifts more and more in favor of communication. A fresh graduate or more junior employee might have a larger share of coding/testing/operations.

The communication side of my job is suffering like never before during mandatory WFH.

My communication with the guys sitting beside me has gone down but my communication with those in a different building has gone up.

This might be on you and the company you work for. Many companies have remote work baked into their culture and from my experience, the quality of communication tends to be quite high

Local workers don't compete with local workers in other locales, but remote workers do.

EDIT: But this implies that people in big cities can expect to see their pay go down to match the greater competitiveness of remote workers, not the other way around.

>But this implies that people in big cities can expect to see their pay go down to match the greater competitiveness of remote workers, not the other way around.

It really depends how fully remote a company goes. To the degree there's still some company advantage to anchor locations that some employees come into on a semi-regular basis, a company might still want to pay some premium for employees to live in that area. However, to the degree that a company were fully remote (and ignoring that some functions will still be physically close to customers), then high CoL vs. low CoL becomes purely an employee decision, it's hard to see the company paying those premiums. So, leaving aside real world messiness, the expectation would be that salaries head towards one (country-wide) value for a given set of skills.

> shouldn't the pay remain the same

No, because facebook is a a company not a charity. If they can pay less amount for equal work, they should. Similarly I would not pay more for a haircut if there is cheaper barber with equal value and quality.

On that basis, a company could pay women less since it knows they are less likely to demand an equal salary. After all facebook is not a charity.

facebook is a MAJOR player in society, and reflecting societies values is not a charitable act it's a responsibility.

It's hard to argue that "remote devs" are a protected group.

>a company could pay women less since it knows they are less likely to demand an equal salary

Except they couldn't, FB is forced to pay equal salary.

>is not charitable act it's a responsibility

Depends on which perspective you're looking at, if I'm facebook or fb shareholder, I consider it act of irresponsibility.

> Except they couldn't, FB is forced to pay equal salary.

never has. no company is forced to do this.

companies only get into trouble if they do this on a significant scale. There are tons of companies out there happily paying women less and still on the right side of the law.

>companies only get into trouble if they do this on a significant scale

This is where they are being forced do to it. The point is a company should do it if they could get away with it without trouble.

s/should/can/. There are reasons in this world to do things that do not maximize immediate net profits.

A salary is made up of a bunch of things, and one of those things is an allowance for living and working in an expensive location, which is not tied to performance or role. If the allowance is for a specific circumstance, it's reasonable that it changes if the circumstance changes. It might be called a Cost-of-living adjustment which is discretionary income.

By that logic, the adjustment should not be a percentage of gross pay, but a fixed dollar amount based on difference in average cost of living.

> Also if the value and quality of work is the same... shouldn't the pay remain the same.

No, because you will find the same quality of people agreeing to work for less because their expenses are lower.

> Also this leads to income inequality. A person from a poor neighborhood/country gets paid less than someone in a wealthy area.

You have to look at net income after basic expenses. What good is it to earn more money but then also spend more for the same quality of life, because everything is more expensive?

What good is it for the company to pay out more money ever? Why pay people to live in expensive neighborhoods at all?

> What good is it for the company to pay out more money ever?

Prices are set by supply and demand. If I need someone in San Francisco to do a certain kind of work, there's a limited pool of people and they aren't going to show up unless I pay a certain amount.

> Why pay people to live in expensive neighborhoods at all?

I don't care where people live, they care. They could save money by moving out to nowhere but then have a terrible commute. Again, that's assuming I need them onsite.

If it turns out that I don't need people onsite at all, I can hire from anywhere and the pool of people gets much larger. Since many of these people don't have huge expenses because they don't live in expensive cities, they'd do the same job for less. I save money, they earn money, it's win-win.

It really only comes down to how much value you put on people being onsite.

Salary is not the only payment. People accept those cuts, this means that those "ow paying areas" have something else to offer. Also, usually remote opportinies still pay more than local is most places, with more remote, the competition for talent in those areas, and both local and remote opportunities will pay more. Value also takes in consideration how easy you can get something, something easy to get is low value, this applies to everything including labor.

It's just supply and demand. The willingness of a worker to supply labor at a certain price (i.e. salary) is, for normal human beings, going to vary with his cost of living.

> It's odd to see Valley types, in light of the FB WFH news, debating whether comp should follow a 'cost plus' or 'fraction of value added' model.

> In my experience it's always followed the Goldman Sachs bonus algorithm: Exactly $1 more than your walkaway price as an employee.

https://twitter.com/antoniogm/status/1263586217183965184?s=2...

Maybe it should stay the same from a moral perspective, but that's not how the system currently works in the United States - and, perhaps, most of the world.

No (viable) company in the United States pays for the value of your labor, but for the profit it can have from your labor. They pay you the very minimum they can get away with, and no more, in a complex decision-making process that tries to extract the maximum profit from your labor. Food, benefits, time off etc, it's all part of the goal of maximizing profits from your work.

So considering the above, and ignoring the morals of doing so, no, your pay shouldn't stay the same because that doesn't maximize profits for the company.

After you move, the company will pay you less because you will still be gladly giving them the same work, if not better work, for a smaller salary due to the new and immense benefit of accepting you to work from any place you want.

Now, you can always refuse to accept these terms. Your options: remain in the bay area or go to your new house elsewhere without the job. Would you prefer any of these options to taking the pay cut?

That's what I thought!

PS: possibly one day we'll have such a strong labor market that people in Wyoming can charge top dollar to bay area companies because the companies won't be able to find anyone else to do that job for less. But I think we're not there yet.

But Also every company has a clause that prevents your pay being cut no?

No. If you relocated out of the SF bay area you would lose the adjustment. This has been true as long as I can remember. I remember seeing old email threads with people complaining about it.

No. In fact, not a single company I've worked for has such a clause.

I've had that in quite a few companies. Their only recourse is to fire you if you unperformed, but reducing your pay is not allowed in the contract.

This makes sense to me because I agree to do the job fox x dollars, you shouldn't be able to turn around and make me do the same job for less without my agreement and a new contract.

I think that's a very uncommon structure, but regardless it's a voluntary pay cut in this case. Facebook isn't saying anyone has to move, and they won't get their pay cut if they don't.

I think you're coming from a place where you're receiving contracts for employment. My employer's contract is "fuck you, show up to work and we can fire you and change the game whenever we please, also, fuck you.". I think that's the employment status for most people, at least here in the United States.

This makes sense for the average worker.

But these are Facebook devs, surely they demand more knowing they have mobility. At that level signing "fuck you" contracts shouldn't make any sense.

Sure it does; they value the "Facebook" entry on their resume more than the risk of being underpaid, pay change, fired at will, or any of the other risks.

Whether or not you or I would value it the same can be debated, but clearly it's worth something to some.

I guess they cannot cut your pay if you keep the contract conditions, if you willingly move to another area... why not?

If you’re getting a location based pay adjustment you’re either working for a company that doesn’t give a shit about you or you aren’t negotiating hard enough. Both of these cases are fixable.

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