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.
Also this leads to income inequality. A person from a poor neighborhood/country gets paid less than someone in a wealthy area.
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.)
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.
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.
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.
> 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...
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.
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.
facebook is a MAJOR player in society, and reflecting societies values is not a charitable act it's a responsibility.
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.
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.
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.
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?
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.
It's a perverse race to the bottom for the benefit of corporations at the expense of the worker and social income equality.
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.
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.
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.