VMware Cuts Pay for Remote Workers Fleeing Silicon Valley | Hacker News Reader

VMware Cuts Pay for Remote Workers Fleeing Silicon Valley

bloomberg.com

49 pointsra786 comments

Yep. Just like relocating between cities while at the same company will cause your payscale to adjust.

Look at the US Federal Government, or most state governments. There is X Pay for the position, and then that pay has a modifier based on location & cost of living. A GS 8 makes $41,310. That's their base Salary. Now in Seattle, that comes out to $52,472. In Albany, NY it's $48,696 due to locality.

Not controversial at all.

For remote workers, though, where the company doesn't care if a given worker is in Seattle or Albany there is no need to pay them different amounts for the same work. They just need one pay level for that work, which is high enough to get enough total workers to fill all their remote openings.

I expect it to eventually end up that most companies will have N+1 pay scales, where N is the number of cities they have offices in: one pay scale in each city where they have offices for the workers who actually work in those offices, and one pay scale for remote workers.

Exactly, this is like HR 101 right? These companies didn't even have to deploy a new payroll system, let alone invent anything. If HR people spent more time innovating and less time at conferences they'd figure out how to cut your pay when you log in on vacation.

I have never in my life worked for a company that had an office and no remote workers. There's always someone in Montana or something. This is not new, at all.

Haha hi from Montana.

Scarcity of workforce is artificially created by rich countries, where talent can be discriminated due to location and citizenship. Now that you can hire internationally and remotely, talent is no longer confined to rich locations, thus democratizing opportunities for workers from poorer countries. A lose from the rich is a gain for the poor.

Hmm..I think outsourcing to poorer countries is happening for many decades now so nothing new here. Also "democratizing opportunities" sounds like corporate speak for cost arbitrage.

This is not quite what is going on. The "rich" that lose are the workers from rich countries. Their employers lose nothing. They can cut costs because they can employ people with a way lower salary. It might still be at the upper level of the poorer country's market rate, but foreign employers won't pay much more than they strictly have to.

employers have to adapt as well. Remember the employer’s employer is the customer. employers have to compete with other would be employers who have a lower barrier to entry now.

There is a lot of complexity for a US-based company around hiring people internationally: 1. Security. How would you prevent your monorepo being copied out to competitive companies in a foreign region or get snooped by some local government officials? 2. HR/Payroll. If you want to be compliant with local laws you will need to create local business entity. Would that make sense to do if you only have one employee in the country? How expensive that setup is going to be? 3. Somewhat obvious cultural/language/timezone difference.

There were a lot of conversations about moving jobs to India in early 2000. It didn't happen - I think primarily for reasons that I just outlined. I don't see what's different this time.

To add more color about the VMWare decision:

- the compensation strategy seems in line with what other companies were doing. Compensation adjustments based on local markets are fairly standard for the large tech companies. They seem to be fairly limited though (< 20% of TC) inside the US - Lots of tech companies allow their employees to work remotely until the end of 2021 keeping their current comp. I'm not surprised to see that changing and VMWare may be the first canary (or I'm just not aware about other companies already doing that)

For number 2 - I worked for many companies outside my current residence and none of them needed to create a German business entity to hire me, I was simply hired on a freelance basis & given a higher wage to compensate having to pay my own insurance & taxes.

If you were working for them like a regular employee, that has quite a few pitfalls - you'd need to perform the duties that an employer has then (get a "Betriebsnummer" (employer registration number), register your contract etc) - working "on a freelance basis" where you actually act as an employee isn't legal (https://www.existenzgruender.de/SharedDocs/BMWi-Expertenforu...). And if compliance is important for a company, they'd need at least someone that is familiar with labor law in a country before they start employing people there, even if they don't explicitly need a business entity.

(Edited for clarity)

Sure, and it's a good point that I think companies should consider instead of downright rejecting this option.

There are implications though: - What about equity grants? A lot of comp in SV based companies is based on equity (both liquid/illiquid). If you are hiring someone on a pure cash basis vs other people who are not - what kind of dynamic / incentives that will create?

I'm very curios about hearing your experiences working in freelance capacity for a US based company though, it sounds like something I would like to do at some point (as of hiring someone), and would really appreciate the ideas

That was basically my experience, I wasn't given options only paid a normal salary ~25-30% higher to compensate me paying for my own health insurance, unemployment insurance, misc taxes etc.

This time it is forced by a pandemic... the economic incentives for companies using this strategy are no longer defined by management's choice

Sorry, I don't think I understand what you said.

What about pandemic makes a difference in the way that security, laws, or timezones work?

Not sure, still unfolding for a lot of companies, but as remote become the norm, these issues may have higher chances of being circumvented

First - "artificially" - citizenship is not 'artificial' goes far beyond some academic credentials.

Second - far from being 'loss for rich gain to poor' - it's a 'gain' for the educated class of a poor nation, a 'loss' for the upper middle class of a rich nation, and a 'bigger gain' for the rich/capital class of the rich nations.

This is not true for complex software. The complexity of modern infra systems (like vmware vm) is so high, that there are very few people (regarding of the location) capable of understanding and creating such software on time and in budget.

I will be surprised if the salary cut includes good engineers.

I worked for VMware from 2007-2014 on things other than the core virtualization products.

I think you’re overestimating the situation. There is a group that did have a fair number of CS PhDs to develop and maintain the core piece — the virtual machine monitor (VMM) but then there’s a large number of plain old everyday SWEs developing the bulk of vSphere and the desktop virtualization products.

I would expect VMW’s policy to apply to just about everyone. A few old timers that have reached the principal engineer or fellow levels might be able to avoid it but that’s a few dozen out of 20,000+

There are 7 billion people on the planet. Even if only 0.001% are capable of working on VMWare, that's still nearly 100,000 people.

High salary Silicon Valley engineers are not nearly as special or unique as some think they are.

If you were actually "democratizing" the workplace, people would get a vote on whether or not to outsource their own jobs.

If you think about it, the net result will be a transfer from workers to executives and shareholders.

The cost of living in a city reflects its overall desirability: the job market, access to education, safety, and so on. If you're living in an amazing city where you have every amenity at your doorstep but a much higher cost of living -- then you should eat those costs in the same way you would moving to a better apartment. Conversely, why should someone in a --worse-- location have their salary --reduced-- to reflect the same ratios when they're not gaining the benefits of living in the more desirable location?

If I suddenly started living in a tent or sleeping on a park bench should my salary also be reduced to reflect the lack of rent and utilities I'm paying? What if I change my diet so I'm only living on rice and cans of beans? I could reduce my 'cost of living' there too. Better not pitch these ideas to VMWare. They might sell it as 'minimalism' and list it as a benefit.

Cost of living is not personal to a person it’s an average to get basics of food cost and housing in an area.

Not everyone has the privilege to just move whenever they want.

To use your example: if you got paid a Montana salary and already lived in SF and had ties where you were unable to move cities you would be forced to move into a tent because that’s what you would be able to afford. (I’m just using Montana and tent as examples I’m not checking actual figures for this analogy)

Adjusting salaries based on cost of living is making sure that people are not forced to move to a different city in order to afford the same size apartment and amount of food.

Your outlook makes dollar amount equitable, but a dollar is only useful when you try to spend it on something. That same tent and rice costs 10x more in one place vs another place.

COL based salary adjustment makes the purchasing power equitable. The real output of the dollar you’re given. Which is more equitable in my opinion.

I was once asked to move to SF for a job and given a 20% bump compared to Toronto salaries so I could afford it. The same apartment actually costs 4x in sf so I’m paying 2x for half the space here. If I hadn’t had my pay adjusted for cost of living I’d struggle to pay rent here and my visa requires that I live within 75 miles of the city for 6 years.

> I was once asked to move to SF for a job and given a 20% bump compared to Toronto salaries so I could afford it

Just to dwell on this point for a bit, I think your offer was not equitable. When I was offered to leave the GTA for SF I received a 50% pay bump with the knowledge that it would be closer to 200% in a few years.

Fast forward 1.5 years and that's exactly what happened. A few years later and the pay bump was closer to 300% and I'm happy it worked out the way I imagined, otherwise like you said, it would not have been worth it.

So companies are finally telling employees: Take a pay cut or take a hike.

Now putting aside that "scarce talent" or "skilled engineer" myth most companies are just fine working with half ass CRUD app peddlers. And they are about as much in demand and as much a commodity as crude oil in 2020.

I wondered how long until "remote work" became the new "talent scarcity," an excuse to pay less.

Programmers like us are not commodities, though, or we'd be worth as much in one location as another, given we can work remotely. And we could be traded (like pro athletes). We are service agents more like cleaners or restaurant waitstaff.

If someone moves from CA to a state with no state income tax, the savings from that piece alone could make up most of the salary difference. If your gross pay is cut by 15% but your post-tax pay is only 5% lower, you've still got way more earning power in WA, TX, NV, or FL.

Yep. I'm in FL, working on fancy virtual machine software. I have coworkers in TX.

These places are not for everybody. Lots of things that save money are just offensive to the typical CA voter. The words "Don't California my Texas" came into being because crowds of CA voters would evacuate from the mess they had created, then vote for more of the same. If they succeed, then where will they go?

So don't just look at the price. You might hate the policy, culture, and law.

Just because people repeat tropes about California or any other state doesn’t mean they’re actually based on data or fact.

According this data [1], Ohio has a higher overall tax burden than California. Does anyone from Texas criticize Ohio’s tax burden? No, because Ohio isn’t part of the demonization of California as a liberal regulatory dystopia.

In reality, California is a pretty normal state with normal people and many of the same problems as other states.

If you’re in Texas, the overall tax rate might be only a percent or two different than California, at least according to my linked chart.

https://wallethub.com/edu/states-with-highest-lowest-tax-bur...

If this data is flawed, I’ll be glad to eat my own words.

The nuance is this: the data looks at total state taxes paid as a percent of personal income. So if you're earning an average OH salary of say $90k, and your total taxes are around $8k, that comes to 9% or whatever.

But now imagine your an SV engineer who relocates to OH and is making $200k (after COLA reduction). Your personal state income tax rate tops out at 4.7%, which is perhaps 6% lower than what you were paying in CA.

Also, you have a mansion that's 3x the size of anything you could afford in SV, and it only costs $300k. So your property tax is under $6k (versus $20k in SV).

So while the tax burden on average might be higher in OH, the tax burden for high earners would be much less of a percentage of income.

California does have one of the most progressive taxation schemes in the country. That means the more well off complain louder. Because most people don't really understand taxes that well (for one thing, half of the nationwide population only pays FICA, which is more forced retirement savings than an income tax), they seem to assume that if the rich are complaining about high taxes then they must be suffering from high taxes, too.

Wikipedia says: "At 7.25%, California has the highest minimum statewide sales tax rate in the United States, which can total up to 10.50% with local sales taxes included."

Sales tax is not normally considered progressive.

With such a high sales tax, you'd expect to not also pay state income tax, and you'd expect low property taxes. This is not the case.

I don't think anybody should leave California. If you vote to create a disaster, you should stay to enjoy it. No other state wants you voting to replicate that.

The combined average sales tax is 8.6% in California (https://taxfoundation.org/state/california/) and 7% in Florida (https://taxfoundation.org/state/florida/). Both states exempt groceries. That's not much of a difference even if we zero in on sales taxes, but in any event it's entirely possible for California to have a relatively high tax burden on the lower classes while also having a relatively high progressive taxation scheme. Indeed, precisely because Florida has no income tax is also precisely why it's taxation scheme is less progressive than in California and possibly even regressive.

Further more, California has a state earned income credit, the highest in the nation: https://www.irs.gov/credits-deductions/individuals/earned-in...

The real issue in California is cost of housing, but that has almost nothing to do with taxation rates, per se. (Not trying to open a discussion about Prop 13 and property taxes....)

FWIW, I originally chose not to paste this citation regarding relative progressive schemes: https://taxfoundation.org/which-states-have-most-progressive... The methodology seemed highly suspicious to me. For example, if a state had a 100% taxation bracket at $1 trillion of income, then if I understand it correctly it would be the most progressive but quite obviously for a meaningless reason.

CA has an AMT. Until Trump's tax reform, you would have paid federal and CA AMT if you had a big payday (a payday of appreciable size typically happens once or twice to SV folks; they are not 'rich' by any stretch of the imagination, when cost of housing, living, and retirement are considered, but they can still get caught up in this AMT trap).

Ohio does not have an AMT. Somewhat surpisingly, Ohio does have a Capital Gains tax, similar to CA, but I'm not sure how they compare.

You have to look at other taxes: lots of people move to “low tax” states and then realize they’re making up the difference in property and sales taxes, or lower quality services.

Property tax rates may be higher elsewhere, but the cost of the real estate is so much lower that it more than makes up for it. I'd be interested to know if there are any low-tax states where someone can spend $25k/yr in property tax on a 3bd/2ba, which is the going rate in Palo Alto.

Also, I don't think any state has sales tax rates that are much higher than SMC/SCC.

California is not Palo Alto for a majority of its residents. My point was just that you can’t just look at the state tax rates in isolation to make an accurate comparison. There are definitely cheaper places to live but the differences are not as pronounced as they might seem - usually within a couple percent. Property costs where you want to live are likely to be a far greater impact on your budget.

It’s like when Americans say they pay less in taxes than Europeans without factoring in that our healthcare costs are paid separately. Systems built around different models need to be compared carefully.

that logic only works if you're saving a large fraction of your paycheck. If you're spending most of your paycheck, that invariably winds up getting taxed somehow, and only the overall state tax revenue fraction matters.

It's true that states need to get revenue from somewhere, so property tax rates may be higher. But the property costs are so much lower, even high rates would result in lower tax burden.

Basically, other states do not necessarily raise as much revenue as CA overall. CA provides lots of services (which you may or may not use), which contributes to the high overall taxation.

It depends on a ton of variables, but it can be boiled down to two: how the tax is distributed based off of various demographics, and how much total tax is levied. Unless you have some reason to believe that the tax distribution is better for you - for instance, if you save half of your paycheck and are moving to a state without income tax - then the only thing that matters is the overall level of taxation.

That really depends on spending habits. If you travel out of state regularly then you receive the same benefit as savings.

On top of that State spending and the relative tax burden on each income range can also vary significantly.

Where do all the taxes collected by California go?

I live in Massachusetts and we have a substantially lower overall tax burden. We also have the best public schools in the country, and the highest rate of health insurance, due to our very generous MassHealth program. What is California doing with their tax dollars?

California revenues are about $425 billion.

Medi-Cal covers 1 in 3 residents. $100 Billion per year program (or about 23% of the revenues). $25 Billion a year for government employees' pensions and retiree health (note that this is not current govt employees! BTW, that's gonna continue growing without bounds). $78 Billion on education (K-12).

These together account for a huge chunk of the money. Very little on infrastructure spending and such (the roads are worse than third-world those in third-world countries here).

BTW, folks like Zuckerberg (the 1%) contribute roughly 50% of the revenues! If the market takes a hit, CA hurts real bad.

> California revenues are about $425 billion.

California State General Fund + Special Funds revenue for FY 2030-2021 were estimated in the most recent budget revise at $182.278 billion. Not sure where you got $425 billion from.

> Medi-Cal covers 1 in 3 residents. $100 Billion per year program (or about 23% of the revenues

This is misleading, because only $38 billion of the $113 billion annual Medi-Cal costs comes from State revenue; $47 billion from state + local revenue and $66 billion comes from federal funds.

> $25 Billion a year for government employees' pensions and retiree health (note that this is not current govt employees! BTW, that's gonna continue growing without bounds).

Current pension + retiree health be benefits are paid out of contributions from when employers were working and investment returne thereon by the retirement system, not current revenue (current contributions come from current revenue, in part, but are part of program cost.) The only part that's really separate for retirement is state payments to pay down existing unfunded liabilities.)

> the roads are worse than third-world those in third-world countries here).

No, they aren't. They aren't even worse than Mexico.

> BTW, folks like Zuckerberg (the 1%) contribute roughly 50% of the revenues!

The top 1% household income threshold is ~$475k, Zuckerberg’s income is around 30,000× that.

The people who are around the top 1% are, by income ratio, far closer to beggars on the street than they are to Zuckerberg.

These figures are a few years old. You can't seriously consider 2020-2021 figures, considering how all economic activity has essentially been shut down for a solid 3-6 months. Revenue has plummeted.

Revenue numbers I quoted included the federal contributions, not CA alone. You can split hairs all you want about general fund vs. other subdivisions, but the fact remains that CA is an insane boom-and-bust state (it has been that way for the majority of its history) as far as its fiscal picture goes.

> You can't seriously consider 2020-2021 figures, considering how all economic activity has essentially been shut down for a solid 3-6 months.

FY 2018-2019, completely pre-shutdown (July 2018-June 2019) was $214 billion in revenue.

Is it true that the super-rich pay higher tax rates? My understanding is most of them have great accountants, and the salaries they pay themselves are generally very low. They use loopholes (intentional or unintentional by the government) to avoid the high income tax rates. Which is why I find the whole fantasy around raising income tax rates to tax the rich to be a smokescreen, and not very well researched. It'd hardly affect the super-rich. The top 1% will mostly be salaried people who can't use the loopholes.

CA has a capital gains tax, also an AMT. And it's generally not possible to escape much of CA taxes (most SV founders/CEOs anticipating a big payday shift domicile to FL and similar tax-free jurisdictions for this reason).

The state also extended the eye-wateringly high top tax bracket for another decade or so, I think... Even with all that, with this year's debacle, CA has probably blown through its rainy-day surplus and then some.

The numbers do not lie. CA taxes the high-earners and rich quite heavily (to practically Scandinavian levels).

I don't understand CA's taxation as much, except the income taxes are very high with little in terms of actual quality of life improvements. I do understand Canadian and UK taxation somewhat and most rich people don't pay themselves a high salary. There are "City of London" loopholes people can use to form a company and not pay tax. There's another one in the UK, where income not sourced inside the UK isn't tax, and that can be used in creative ways. Which means you can form a company in a tax haven and move your revenues there. In Canada, the corporate tax rate is like 15% and goes down to 9% for small business. And of course there are other avenues through which people form charities for tax avoidance and what not that I haven't dug deeper into. A lot of companies in the US also use the double Irish (closed now) and other similar schemes, don't they? I might not know as much here, so would love to know more. I highly doubt millionaires and billionaires pay 50%+ tax rates anywhere. They would be using loopholes I think. Kind of why I believe income tax is for the most part a failed scheme if you want to tax the rich. Tiered sales taxes might actually achieve more fair taxation.

CA is a first-world country (comparable), whose politics and governance are closer to a third-world populist state (India comes to mind). Insane giveaways and voter-mandated initiatives that take budgetary decisions out of elected representatives' hands (this one is both too much democracy and too little democracy at the same time!)

As far as taxing people effectively is concerned, I do not think there are simple answers to be found. As you yourself know, it's possible to clean dirty money simply by setting up complicated ownership structures in jurisdictions such as Jersey. But that only works for the substantially rich. The large majority of high-earners who are very successful professionals at or near the top of their fields end up shouldering a lot of the burden as far as income taxes are concerned. These people can not afford the advice needed to shelter their assets, so they end up getting caught in every revenue raising scheme.

High sales taxes are a terrible idea. CA taxes sales heavily (no VAT, but very high relative to other states), but it ends up being heavily anti-poor, because most poor are the working poor, and they must spend the majority of their incomes on essentials such as food, shelter and transportation. The sky-high gas taxes and surcharges also affect the poor the most in a similar fashion. If the goal of the taxation system is to be progressive, then sales taxes are the direct opposite of that. As are payroll taxes, for the most part.

Zuckerberg is way higher than 1%, a tiny silver of a fraction of 1%. "The 1%" are like senior engineers at FAANG or a successful dentist running their own clinic.

That's true. Unbelievable though it is, FAANG guys/gals are comfortably in the top 2-3%

> I live in Massachusetts and we have a substantially lower overall tax burden

Not according to https://taxfoundation.org/state-local-tax-collections-per-ca... (state+local per capita) or https://www.kff.org/other/state-indicator/state-collections-... (state only per capita).

This table has a breakdown of state revenues: https://www2.census.gov/programs-surveys/stc/tables/2019/FY2... I don't see any significant revenue sources, relative to sales or income taxes, that might offset the burden per individual. And in California corporate taxes make up 14% of state revenue, but only 10% in Massachusetts.

Revenues isn’t a great way to look at it, because that is heavily skewed by average income. A better metric is Tax Burden percentage, which basically combines all tax sources. California is higher than MA by .5%. https://worldpopulationreview.com/state-rankings/tax-burden-...

Can you substantiate the claim that MA has the best public schools in the country? I consistently hear about the Chicago suburbs (Naperville, Evanston), Westchester (Scarsdale, Rye, Chappaqua), Long Island (Jericho, Great Neck), and Main Line PA (Tredyffrin, Lower Merion). I never hear about MA schools.

Honestly, just do a Google search, there’s a ton of articles. https://www.usnews.com/news/best-states/rankings/education

I see. Looking at the methodology, they’re averaging out the state. This means that the average school district is better than any school district, on average.

But I wouldn’t go as far as saying “MA has the best public schools in the country.” It seems like they are just uniformly above average, whereas NY and Illinois have terrible school districts, mixed in with legitimately the best school districts in the nations.

40.7% goes to K-12 education. 11.9% to higher education. 21.0% to health. That is the top 3 expenditures.

Unfortunately for people in NY, you still have to pay income tax there no matter where you live in the US. If you're lucky you'll work in a state with no state income tax and it will be a wash, otherwise your tax preparer is going to have a fun time.

And just like that your manager has decided that your work is now less valuable despite meeting the same KPIs, adding the same value and sacrificing the same amount of your lifespan to make him rich.

Your work was never worth that much. I pay people 1/4 of Bay Area rates who are just as good and live better in a more obscure location. The downside was there aren’t enough people, but remote addresses a lot of that.

The big salaries and localization are about control, especially with investors. Talent follows the jobs, and we are in a consolidation cycle. IBM successfully ran significant technology centers in obscure places like Minnesota, Binghamton, NY and Vermont for decades.

> The downside was there aren’t enough people, but remote addresses a lot of that.

That's a big assumption! Wouldn't that imply there are software engineers who don't work in their field because they can't find work where they live? It's safe to say that most already relocate to where the money or work is.

No one has ever had their salary set by JUST the value they provide for the company. If anything, the value they provide is simply the CEILING for how much an employer would pay them; if they paid them more, they would be losing money and it would be better to not have the employee at all.

Employers pay the least amount they can in order to attract and keep an employee. That pride is set by supply and demand.

Remote work vastly increases the supply of available workers, which will drive down wages. While it also increases the number of companies that need employees, most of the ones that aren't in the major tech centers aren't really competing for those highest salary engineers; they simply don't generate enough value from an engineer to be able to afford those higher salaries.

"your manager has decided that your work is now less valuable "

No - this is supply and demand. There are two sides to the equation, not one.

Someone working where there is no taxes, and low cost of living, will value the employment opportunity differently.

The 'clearing price' for the 'trade' will thus be different, even when all other factors are otherwise the same (i.e. the workers skills and abilities are identical.)

the agency isn't with "your manager" so much as a large fraction of tech salaries were effectively a hedge against you walking down the metaphorical street and finding a different job.

now that that's no longer such a concern, coupled with what i would guess is largely a scarcity mindset brought on by the pandemic, it's not really a surprise that comfortable engineers aren't putting up a huge fight when their salaries are merely 2 standard deviations above the mean of one area or another.

I’d argue remote work means that folks can “walk down the street and find a job” quicker. Remote work means companies like those in say Chattanooga, TN can now source and hire workers from San Francisco. If they’re willing to pay for them and/or compensate/entice them otherwise.

It also means workers can be free to leave San Francisco without affecting their salaries as much. I live in a small city, that’s not a huge tech hub, and I make equivalent salary to someone in SF or in Seattle. I’ve done so for numerous years.

I’d also argue that much of these salary reductions have other means. Such as stock implications in a Covid world, an attempt to curb a runaway burn rate, or even a veiled attempt at reducing the workforce slowly without severance packages or legal issues.

Alternatively its a disguised reduction in workforce. Doesnt impact the stock like a layoff but probably has a non-negligible impact culling some employees from the herd.

When you cut pay are you more likely to lose your best and brightest, or those without better options? Sure, maybe it helps the bottom line now, but lowering wages to reduce head count is the best way to ensure brain drain (in most cases, obviously there are exceptions to everything)

It may be more useful to look at tit from the angle not of "value" but of compensation. For the employer to acquire your services, they have to compete with other companies and part of that competition is going to be on how much you are paid. When you leave to another place with a different COL or different job market, the amount competing companies are willing to pay decreases.

Sorry for rambling.

Well, that's a useful reminder that work by itself does not have an intrinsic value. What matters is an outcome or a perception of it. Sacrificing your lifespan is generally not something that is valued in a corporate life at all, outside of the face value of being visible.

In my experience companies who try to not pay based on location tend to underpay in general (Gitlab would be a prime example).

In the interest of value equivalence, do you believe COL adjustments in the Bay area are unfair?

Engineers are paid according to their scarcity, not so much their KPIs. Remote work changes the supply and demand situation in favour of employers.

I don’t really buy that argument. I doubt that there are lots of skilled engineers out in rural places just waiting to be tapped by remote work. Skilled talent clusters around the jobs.

I suppose there’s the international aspect, but that isn’t what is going on here.

You're going to be shocked when you realize the number of people who don't want to move to San Francisco. There's a smaller but still substantial number of people who don't want to deal with living in any dense metro area. There are even plenty of people who don't want to move very far from their friends and family at all.

Only if the employers are idiots. Good engineers are always scarce.

This is a wealth transfer from landlords to companies and doesn't really have a lot to do with the workers.

Companies to landlords, but yes.

How? They had to pay more because the employees had higher housing costs, because of artificially scarce housing in SF. Now the employee gets the same pay net of housing, the landlords (as a class) get less, and the company keeps the difference.

I think you and the parent are just talking past each other and you really agree on the same thing.

I don't see this as a new wealth transfer though, I see it as the cessation of an ongoing wealth transfer. I think the parent does too.

In other news, companies have been paying salaries based on cost of living expenses since the dawn of time.

I see this less as a "cutting" pay and more "rehiring you in another state at your relevant salary tier".

Eh, it won't last. There will be enough competition for engineers that salaries will rise again. Also this won't apply to talent the company doesn't want to lose.

This is comical in an environment where pay raises don't even track (or barely track) inflation, and then only if you are in the "top 10% of achievers". All of a sudden HR departments are economists and experts in adjusted living costs. Executive staff, of course, is exempt.

and now remote workers will flee VMware for companies which pay them normal salaries.

Seems reasonable. I wonder what would be consequences for this? and how significant will it be when more companies do this.

Will services that are based entirely on Silicon Valley charge less? Real Estate will be lower? Less trafic

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