Equal Pay for Equal Work
dusted.codes
dusted.codes
And conversely for a company: do you really want to spread out your developers over very disparate timezones, different cultures etc?
But this ignores the fact that the labour market in the whole of the US is not the same as the labour market in SV - so it is a pretty poor argument.
I think most people get it wrong - it's not that people living in cheaper locations are underpaid. It's people living in more expensive locations that are massively overpaid. Just because a software engineer in SF can make $100k/year doesn't mean that's what the position is worth, it just means these companies are massively overpaying.
Compared to your environment, sure. However, you'll never drive a Tesla and buy $4000 road bikes when you're on $27k/y.
> Just because a software engineer in SF can make $100k/year doesn't mean that's what the position is worth
It means exactly that in a free market capitalism (and while we're not living in a pure free market, we're not _that_ far). Why would a company overpay? (Sometimes they do, but not 4x, and not consistently.) In case everyone's massively overpaying in SV, then you could just start a company there and pay people half the salaries and be extremely competitive.
But I'll easily buy a 6 bed house with lots of land, something that pretty much no one in SV can afford, so.....what do I need that Tesla for?
It is obvious that for you money equals happiness but there are people in the world that believe that not everything in life is money and status.
They value relationships, they value freedom and time, they value going to the mountains or beaches that is almost free. They value cars as a means of transport and do not need a Tesla.
Your comments speaks clearly that you have never gone out of the US and as a result you have lots of prejudices about it.
But also, companies overpay in SF because if they don't someone else will pay better and pick up the experienced technical labor. So it's an employee's market there, sort of, versus in perhaps Poland where there's less valley-level insane demand for technical labor and so companies aren't so competitive to snag that one extra person.
How do you measure it then. Because the textbook definition is "you're worth as much as the market will bear". Which is exactly what I'm talking about - do you disagree? And why would I have little experience on the topic? I worked abroad, I worked in high and low income regions - the market forces work exactly the same way everywhere.
I only brought up my accountant and prime minister to give people from outside of Poland some idea what the wages are like. So I have no idea what you're talking about, but I also guess you don't either.
It would happen between Scotland and London, but not (to the same extent) between Poland and London.
Once you move something abroad the output becomes an import which ultimately has to be balanced by an export (or mercantilist tricks which is a whole other discussion - see China for details).
The correct response would be to unionise, rather than throw hands up in the air and continue to feel exploited.
There is a shortage of skilled staff. If your current employer doesn't appreciate you, then find one that does.
Why not just find another employer which pays the rate that you want? And if you can't do that, why do you deserve that rate?
So we see this "pay me, but no-one else, for the value I create" nonsense, as though programmers alone should be exempt from the dynamics of supply and demand.
If we're going to go down this path, then let's pay nurses and doctors for the value they create, which has been proven to be extraordinarily substantial this year. Let's pay supermarket cashiers, truck drivers and shelf-stackers - the people who had to literally risk their lives so that the rest of us could have food available during this pandemic - for the value they created in the rest of us not starving. Let's pay child care workers and teachers for the value they create, which I wager will often be far greater than what some programmers contribute.
Engineers aren’t asking to be paid the value they create, they’re just objecting to pay cuts for physically moving while doing the same job.
I can think of a few other alternatives:
- some new "remote workers" market that doesn't exist at the moment
- the pay of the lowest paid region in the world
- the pay of the highest paid region in the world
I can't see the last option being reasonable in any way, and the second option also doesn't seem like it would work in practice. My guess is you'd see something in between the first two.
This would take a long time to stabilize, so it's not straightforward for companies to implement I think?
That being said, I still do much better than I would with local employers, and I like not stressing out about heavy liabilities.
While ignoring that their pay in their current location was as a consequence of a location specific market, while if the market becomes the whole of US, the market rate will obviously change.
If you have to discard this for the argument to hold water, it is a bad argument.
So, a nurse or teacher provides a very valuable service, no doubt. Salaries won't naturally go up until availability goes down.
By demanding to be paid closer to the value you create you're not robbing nurses from their unfairly small salaries, you're demanding a few more crumbs from the pie shareholders are taking.
Stop that bullshit. Be frank, and say that compensations will be different because the market is different. That's it.
'Cost of living' is bullshit without specifying what 'living' means. That needs you to specify what your employees should be spending their income on. If an Ukrainian employee spends all they income on buying houses and going to restaurants and hairdressers, then their cost of living is really way cheaper than someone living in, say, London and buying similar houses and eating in similar restaurants. However, if our imaginary Ukrainian employee wants to buy cars, gadgets or wants access to high-quality healthcare, then suddenly the cost of living is _higher_ for them than for someone living in London.
So screw the bullshit around 'cost of living'. Do whatever you prefer about compensation, but be straight about it.
(The article is not great, though, e.g. stuff like "Whatever one's situation is, however difficult a negotiation might be, treat people like they were your friends" -- well, no, your colleagues are not your friends; some of them might be, but you better have friends as your direct reports.)
that's not saying "these are your friends", it's saying "treat them like they were your friends". They're clearly not your actual friends, but negotiating is easier and gets better outcomes if you're friendly and positive. Starting a negotiation with an unfriendly and hostile or combatative attitude doesn't work as well.
Treating someone as a friend and being friendly are very different. Sometimes I am very assertive, pushy with my friends, and make them uncomfortable. I'd like to think that I'm doing that when making them uncomfortable is in their interest (e.g. telling someone to stop doing something that's harmful for them is definitely not a 'friendly' thing to do).
In a business setting, being friendly can simply be means to squeezing more value out of a person.
Therefore I'd be careful with my words here: if TFA wants to say 'friendly' then that is what it should do instead of saying that "treat people like they were your friends".
It's different if you are arguing that they will inevitably merge. But if you're arguing that we should artificially merge them, that doesn't make a terribly large amount of sense to me. Or that we should not merge them but we should just act irrationally in a market to be consistent with our actions in another market, again, that sounds like people being excessively idealistic.
No, it is not. This article is arguing the opposite. The article is arguing that you should ignore the fact that the labour market changes and still demand that you get market rates for some arbitrary other market which is no longer the market that you are operating in.
If this article was arguing we should artificially merge all markets they would not have a problem with getting a pay cut when the market becomes the whole of US instead of SV.
Call it cost-of-housing or cost-of-equal-expenses, or whatever but the name doesn’t matter. The costs to the employee are different
But I’m a remote employee right now and do want equal pay
A company starts with an office in London, and employs a bunch of people at London market rate. Some people move from Poland to London to take those well paid jobs.
The company grows for a few years and needs to open a second office. They open an office in Poland as paying market rate there costs a lot less.
Then along comes Covid-19, and some of those Polish employees in London want to WFH from Poland. The company has a bunch of options and they're all shitty for the company:
* If they let the Polish employees in London work from Poland while earning London market rate, they'll have two sets of Polish employees earning radically different wages for the same work in the same country.
* If they tell the Polish workers they'll get a pay cut if they move, that's arbitrary as they're doing the same work regardless of their location - and it deprives them of the family support Brits can access, and it's essentially unenforceable anyway (who's going to report themselves as due a pay cut?)
* If they cut everyone's salaries to Polish levels, the London office will evaporate instantly.
* If they raise everyone's salaries to London levels, why open a Polish office in the first place?
Legally you probably have to report yourself.
It's rarely (or never?) legal to pay taxes in one place while permanently living at another.
I think this article would be more helpful when negotiating if it also included the arguments from the employers point of view and how to respond to those. The most important point being: "The market price for developers in your situation/area is X".
I also find the argumentation a bit inconsistent: The first section is "Same value, same pay", but then later it is "Higher cost, higher pay". Now what is it? Is your pay determined by the value you provide or the cost you have? Or is it a combination? If so, how do you balance it? Should "Lower cost" (e.g. no longer paying for commute) also lead to "lower pay"?
Salary has nothing to do with cost of living. It correlates somewhat, but ultimately all that matters is cost of labour. If we're going for "equal pay for equal work" then employers could easily pull wages down to a global minimum (now that "the market" is the whole world).
I live in London where things are super expensive, much like SV, but I get paid far less. How is that fair?
Developers from the whole world that get paid 1/10th(or less) of those SV engineers that the only differentiation factor they have is an American citizenship would happily take their jobs.
I like this situation because it won't take long until all software work is moved elsewhere outside America. I doubt companies will accept that kind of shit from employees, because if they do, they will lose money. And if they don't, employees are spoiled, they think that those high salaries are a right, will make a big case of it and caos.
- When working in a team, timezones matter
- Labor laws also matter, and a company needs to do some paperwork before hiring workers in a new country
- Companies are still going to hire workers with similar skills to their employees, so Big Tech and Silicon Valley companies are not going to suddenly hire people who only have experience working at outsourcing companies
Paperwork and laws matter as well, but if you can save 75% of your salary spending you'll deal with that.
Big tech and SV hire people straight out of university, don't they? What's the difference between hiring an MIT grad that stayed in the US and hiring an MIT grad that moved back to their home country?
So if employers want to be competitive then they will have to pay well regardless of location. In Europe we see a lot of US applicants these days, some good some bad, but we pay equally for most part depending on skill set.
Excuse my cynicism, but:
"diversify their workforce" -> use subcontractors, temporary work agencies, and other people who are ore
"increase employee productivity" -> From the experience of myself and people I know, productivity working remotely is generally lower than working on-premises, albeit with some exceptions. This sounds more like the potential for making people work longer hours and be on-call during off hours
"cut some cost" -> That seems to be the opportunity here...
> The biggest cost saving obviously comes from office space,
I'd guess that the biggest cost saving probably comes from reduced salaries. People working remotely are easier to control and are much less able to resist management initiatives through interaction with their peers (and I'm not even talking about unionization, which is already very low in the US).
We should never assume the debate is between different benevolent entities who just disagree about the proper moral criterion for setting wages. No. Those are commercial companies which have a tendency to depress wages when the opportunity arises. That doesn't mean they'll always do that, but it certainly means that their considerations and motivations are not what's best for employees or what's morally superior, or even what's fair.
Imagine if you are building cars worth $20000 for $5000 and undercut western companies. Your car is worth $20000 so instead of undercutting you can just sell it for $20000 and take $15000 profit which then leads to more demand for employees which then leads to increased incomes once unemployment is down.
"Cost of living" is a bastardization of the concept of real wages that doesn't even make the slightest economic sense.
Should we boost salaries of people in Sydney so they can sustain living in the sun all year long with rich neighborhoods and a thriving city? And then pay people less in rainy and cold places, just because it’s poorer and disenfranchised and flats are cheap in the polluted area of the city, so your price-per-square-meter is lower? That is why the average cost of living there is lower, after all.
If we pay people at their living cost, people will flock to nice places, overpopulating them while cold places will die faster than Detroit.
There is no right answer to that. So let’s not “organize” it and let the markets decide.
If previously agreed upon, it can be reasonable for a company to remove this location-dependent raise in salary if someone voluntarily changes their location.
- I am not a Bay worker, I don't even live in the US, I never had a pay like an average SV engineer and I am not even an employee right now. This blog post was not written with the intention to help myself, but others.
- Anyone can find any flaws in any argumentation, but that is not the point. I wrote this because I thought if it only helps a single person to motivate them to fight for a better pay, then it is worth it. If someone doesn't stand up for their own pay then it doesn't make other employees better off. The alternative is that some big corporation just managed to exploit the general public in yet another way. My blog may not help everyone, but if it does for some I consider it a success.
Thanks for sharing and your inputs though!
If the veracity of an argument is besides the point, why even write it?
And the actual argument has nothing to do with equal value, work or duties even, and it is a crappy argument, because the price of labour has to do with the market for labour. If the market is the whole of US instead of SV, then you will get market rate for the whole of US, which is lower than SV.
You think someone in Poland will get SV rates just because they are insufferable enough? No. They won't.
And you know what, if you don't like what your employer pays you, go to another one. If you can't find one that pays you what you think you are entitled to, what is the basis for this entitlement?
There are lots of employers.
I think governments will try to prevent that with some sort of taxation.
There are no two programmers that actually do the same work or that have the same job (similar ones yes, even substitutable, but not the same).
That works only for reasonably repetitive tasks with well defined boundaries, such as an assembly line worker.