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Comment by cactus2093 | Hacker News Reader

cactus2093

> and not on the market value of your work

Interesting choice to invoke market value to argue that the salaries that the market has settled on for remote work are too low.

The market value of work isn't the amount of revenue that the work brings in. If you think you can capture the full value of the work you do for yourself, you're always free to work as a solo entrepreneur instead of working a traditional job. That's kind of an upper bound on what the company could pay you, but the market value of the work is based on the number of employees the company needs and the number of qualified employees they can find. Remote work floods the supply with lots more available workers than they can find in any one city, so salaries for those roles go down. That's not treating you like a child, it's just how a market works.

View on HN

A lot of people on HN scream against location-based pay, because for some reason they assume they'll make more without it. If they live in Europe, or rural America, they might be right. But HN has a highly disproportionate number of Valley and NYC residents. They're all getting [big] pay cuts if you get rid of location-based pay. The biggest (but not only) reason someone in SF makes $250k+ total comp is because it's so expensive to live in SF.

Not too long ago, I remember threads on HN where people were saying that $200k or $250k wasn't enough for a SF dev and using real estate prices and general cost of living as justification. You can't have it both ways - either your general cost of living is taken into account in your salary (location-based pay), or it's not. If it's not, get ready for a market where the average senior developer makes $90-110k/yr, total comp.

Yea, i really don't get so many of the comments here.

If i live in a low COL area and i apply, why wouldn't i want the competitive advantage of being able to charge them half as much and make twice as much profit as my competition?

People outside the bay area can make a good living charging well below crazy SF rates.

This isn't even an argument to me. It's not even a discussion. Of course when you have a pool of talent, and that talent is competing for a single job, they will use every tool possible. If you can work for half the price of some SF guy paying massive SF rates, why wouldn't you use that tool?

Yea sure, i could make $200k a year - that would be neat i suppose, but it's insane imo. The number only exists because of SF specific problems. And i'm not in SF.

There is no nice way to say this anyhow, but it needs to be said to further the discussion that does in fact exist: this is thinking like a chump. Being a chump is not a competitive advantage, it’s being taken advantage of. I fully respect your right to sell yourself short, but please don’t present it as somehow economically sophisticated and potentially lead less experienced readers here to follow the same foolish path.

Not at all. It's playing the numbers.

If you're aiming for $50k/y in profit after all COL, your required pricing is different in SF than it is in rural America.

If you live in rural America and compete at hiring with SF people, it's your competitive advantage to keep the same profit as them but negotiate a lower price. This increases your relative value in the hiring process.

Sure, i _could_ keep the same SF rates, but then my competitive advantage may just be my skill. If i want more than skill alone, i could lower my rates.

I'm not making less profit. I'm competing to get a job.

> advantage to keep the same profit as them but negotiate a lower price. This increases your relative value in the hiring process.

That is how you negotiate when you’re struggling to find a job. By doing this you’re admitting that you’re not going to be as good as the high CoL candidate so you adjust your price to make your offer more attractive to the company. That’s a terrible position to put yourself in (but entirely understandable if you can’t get offers otherwise).

If you’ve passed the same bar and the company is truly fine with remote, there no reason to accept anything less than what they would pay a local. Speaking from experience in several tech companies in the bay, a proven remote employee is just as valuable as a local and getting decent software people is fucking hard.

It’s unlikely as a candidate that there is even any competition for the position you are filling (as in not multiple candidates that have passed the bar being picked over). Talking you into cost of living adjustments or whatever bullshit is just salary negotiation, not competition with other engineers.

Get multiple offers if you have to, but there is literally no reason a company willing to pay Bay Area salaries can’t pay that to a remote employee. Accepting less is just letting them convince you your labor isn’t as good as Bay Area SWE labor.

> That is how you negotiate when you’re struggling to find a job. By doing this you’re admitting that you’re not going to be as good as the high CoL candidate so you adjust your price to make your offer more attractive to the company. That’s a terrible position to put yourself in (but entirely understandable if you can’t get offers otherwise).

Yup. That's what i said.

If you see no reason to negotiate, why negotiate? Set your price at what your think your value is. Don't indulge COL requirements of another location.

> It’s unlikely as a candidate that there is even any competition for the position you are filling (as in not multiple candidates that have passed the bar being picked over). Talking you into cost of living adjustments or whatever bullshit is just salary negotiation, not competition with other engineers.

As someone who hires, i disagree. Every one of our hires has been a debate on expected output when compared to cost. But we're a fully remote company.

edit: Oh, and we're not flush with VC cash. We also can't afford any SF employees for this reason. We're much more willing to hire a junior engineer if their priced accordingly. Likewise, if we hired someone at $250k/y, we'd expect twice the output of him/her - and that's unlikely.

I don't get why this is controversial.

It is actually more than likely to get 2x the throughput when paying for better talent. The bottom of the talent pool is saturated with coasters who never invest in learning. I am seeing way more than 2x. There is also a cumulative factor when you get most of your employess in that caliber. Lastly, there is a limit on what a low talent pool can achieve regardless of the numbers. 1,000 people with my physics skill won't invent the theory of relativity. 10,000 coasters can't invent page rank.

I think it’s disingenuous to assume everyone in SF is commanding higher rates because they are all super talented and not coasters. There are definitely tons of undervalued engineers in poorer or lower cost areas being overlooked to do this fallacy.

Just because someone is charging $200k doesn’t mean they are worth it.

Companies previously established artificial constraints such as colocation that forced higher salaries. If colocation is no longer a requirement, it’s only natural the associated premium is going away. That is, if you want the benefit of living in, say India, then you’ll also have to incur the cost of competing against someone like Ramanujan (famous mathematician) rather than whoever just happens to be within commuting distance of Mountain View.

> I'm not making less profit. I'm competing to get a job.

You are competing on price instead of quality. I'd rather compete on talent and keep the money, thanks.

Being a chump is living in the Midwest and asking for SV rates just because you think it's "being taken advantage of" to underbid someone else for the same work.

The era of $400k total comp software development is going to end someday and more accessible remote work is only going to hasten it.

It wont end, just be reserved for the elite, much like it is today. Few Average Joes are making that 400k total comp.

It follows from this that you think the future of software companies will be reaping even greater profits from massive payroll cuts. I doubt it.

> The era of $400k total comp software development is going to end someday and more accessible remote work is only going to hasten it.

Well, the same argument has been made before regarding offshoring and so far that hasn't seemed to have spurred any major declines in total compensation.

> "Well, the same argument has been made before regarding offshoring and so far that hasn't seemed to have spurred any major declines in total compensation."

Yes, but things are different this time (famous last words, I know). Prior to COVID-19, offshoring was competing with the convenience of having everybody in the same physical space. Now, with every tech company currently having nearly all of their staff working from home, they are learning to make the equivalent of offshoring work; they have no choice in the matter if they want to continue operating. It's a small, small jump from there to outsourcing to low cost of living regions or even real offshoring.

> The era of $400k total comp software development is going to end someday and more accessible remote work is only going to hasten it.

I'm not sure I buy this when the vast majority of these CEOs have magnitudes more money than they could feasibly spend even if they used a flamethrower. Honestly I don't see tech becoming less useful/profitable in the future, quite the opposite. As long as these $400k employees are netting people higher up a lot more, it isn't going to stop. One could argue that there's still room to pay the employees even more. (and let's be real, most people aren't getting $400k tc)

We're all somebody else's chump

You're assuming a highly optimistic scenario where you take an even pay cut but make out like a bandit. The reality is that a "fair wage" for many rural white collar workers is 40% of what you might make in SV, or even worse. Getting $250k in SV sucks, but try getting paid $50k in Cincinnati. Then imagine a scenario where there's maybe 2-3 local companies that hire, and they all collude on prices.

I feel like people saying "just move to a low COL area" have never actually lived and worked in a low COL.

If you lose your job or get fired, there's no one to back up that "half as much, x2 profit" unless you find remote work again, and then you're also at the mercy of whatever people feel they can get out of you. Without competing offers or local competition, you're at the mercy of the market.

People are underselling the competition that nuclei of talent can produce from top competing companies.

> Getting $250k in SV sucks

Ok hold up in what world does $250k in SV suck? Median household income here is around $120k last I checked. Making more than double that cannot be described as sucking, come on.

It was mostly sarcastic. I don't actually believe it's bad, that's just "average market rate" for senior/mid level engineer. Roughly translated, 250k in SV is 120k in the Midwest. Housing issues aside.

> Roughly translated, 250k in SV is 120k in the Midwest.

I'll believe this only insofar as $120k in the Midwest means you are "set" in the sense that you can max out your retirement, buy a home, have nice cars, etc. and basically live on autopilot from a financial sense.

That’s how bad housing is. If you grew up on the dream of a nice house with a garage and a big yard, $250k still doesn’t get you there in SV.

This type of housing setup that would cost $300k in, say Dallas, will cost $2.5 million on the peninsula. Between property taxes, mortgage insurance, interest, and principal payments and a jaw dropping $140k down payment, that is a monthly payment of $14k or so.

Your take-home after taxes on 250k in the bay is probably around 160k, or 13.3k a month. Whoops, no “American dream” home for you.

As a European I think American expectations of a reasonable home size are completely ridiculous. Guess that’s a hidden immigrant advantage :D

Then again I would describe most of the houses here as somewhere between a hovel and a shack in terms of build quality. But I’m getting used to it after 6 years.

> As a European I think American expectations of a reasonable home size are completely ridiculous.

I would agree if it weren’t for the fact that this is still a completely reasonable expectation in most of the rest of the country.

How is it reasonable in the least to expect a big house with a garage and a yard in one of the most expensive places in the country?

Of course it’s going to cost a crazy amount of money. It’s not even an option in Manhattan, but plenty of people would disagree it “sucks” there.

> It’s not even an option in Manhattan, but plenty of people would disagree it “sucks” there.

In Manhattan thats the expectation. You’re in a super dense area filled with high rises. Life is good for apartment dwelling.

In Mountain View, you’re in a suburb that’s mostly single family homes that you’re constantly reminded you won’t ever be able to afford.

> How is it reasonable in the least to expect a big house with a garage and a yard

That’s the lifestyle of the peninsula. It’s reasonable to expect the lifestyle you are constantly surrounded by. Back to the Manhattan analogy, $250k absolutely would not be considered good money if it could not afford you the ability to live like the average property owner.

The Bay Area is a stark contrast between the people lucky enough to have purchased 10+ years ago + some FAANGs and everyone else. Everyone else is stuck in a terrible apartment telling themselves stories about how they’ll get out after making their money or whatever.

It’s nice living in a walkable apartment with no car in Manhattan (or nyc in general). It’s dreary AF on the peninsula.

It’s reasonable to expect the lifestyle you are constantly surrounded by.

No, it's not. Should you be able to afford a home in Beverley Hills? Should you be able to afford a home in San Francisco itself? 40 years ago that was the norm.

> No, it's not.

Yes, it is. The norm in cities in the US until very recently was that you could get a middle class job, buy a small home, raise a family, etc. This phenomenon of only being able to lick the boots of the homeowners near the good jobs is relative new.

> able to afford a home in Beverley Hills

We’re talking about the entire Bay Area, not a specific suburb. Anywhere within an hour commute of Google HQ is like this.

> Should you be able to afford a home in San Francisco itself? 40 years ago that was the norm.

Yes. It was the norm. Then the nimby dickheads stepped in and pulled up the ladder behind them by blocking everything they could and pushed through a very favorable proposition to existing homeowners (prop 13).

Your opinion might be that it’s fine to block out an entire generation from the bay and rent seek. I personally think that’s a shitty drag on society propped up by government created housing scarcity.

I think people are also assuming that the "market" rate for tech jobs in these "low COL" areas keeps up with the cost of living. I am here to tell you that it does not, in the cases I'm familiar with. Especially in the relatively hot "cheap" areas, outsiders moving in are driving housing prices up dramatically, but the pay rates have not increased the same amount. So if five years ago you could make 2X the profit, now it might only be 1.25X, and getting worse.

Also, people need to remember that "cost of living" is not actually one thing. It's not like I get a "living" bill once a year that I have to pay. Even in relatively cheap areas, there are some things that cost the same as or even more than they do in major metro areas. Don't do math based on some web-based COL calculator or even on housing prices and assume that it will apply across the board.

I have absolutely seen offers within the last six months where the candidate would be worse off financially despite living in a "cheap" place because the pay reduction was more than the all-in cost of living a similar lifestyle (yes, if you're willing to downgrade lifestyle you can offset this, but you can do the same thing in SF. Most people I've seen actually want to UPGRADE lifestyle with larger houses, more land, nicer neighborhoods, etc.).

The point is that the companies are making the same amount of revenue regardless of where you live. If Google cuts your salary 50% because you move to a cheaper area, maybe that doesn't make a difference to you but it is free profit for Google shareholders. It makes it more obvious to people that the amount they are paid and the amount of marginal profit they earn for the company is WILDLY incommensurate, even for over-compensated Silly Valley engineers, and would be even moreso if you move somewhere cheaper and take a pay cut.

> The point is that the companies are making the same amount of revenue regardless of where you live.

Agreed entirely. It depends on what specifically we're discussing. I often look at hiring.

> If Google cuts your salary 50% because you move to a cheaper area, maybe that doesn't make a difference to you but it is free profit for Google shareholders. It makes it more obvious to people that the amount they are paid and the amount of marginal profit they earn for the company is WILDLY incommensurate, even for over-compensated Silly Valley engineers, and would be even moreso if you move somewhere cheaper and take a pay cut.

I wouldn't work somewhere that did this for this very reason. But there's a huge difference to paying someone based on their finances, and negotiating hiring pay. I'm just talking about hiring pay being negotiable.

They could also hire more engineers or expand into new territory which requires additional (non-engineering) labor. The cost of living in the bay area seems almost an artificial constraint on the supply of labor at these companies

>. If Google cuts your salary 50% because you move to a cheaper area, maybe that doesn't make a difference to you but it is free profit for Google shareholders.

And thats exactly how a company should operate - maximize profit while minimizing cost. And conversly, as an individual, you should do the exact same, which is get paid as much as you can for your work (or do the minimum amount of work for the pay you get). When both of those strategies meet in the middle, you get a paid job position.

I'd argue the opposite. The price of living rose to meet the means of the people who lived there. People in tech are highly paid because it is a workers' market where talent and special education and skills are generally required. If the industry could hire people who could do the same job remote at $50k per year this trend would have begun decades ago.

It did, didn't it? faangs have been moving development to the Midwest for at least 20years.

Look carefully at what is moving to midwest. Either projects that are in maintenance or non-tech workers.

Interesting! In the embedded systems arena it has been happening even longer than that, including developers. Maybe that explains part but not all of why webserver developers make double on average an embedded developer's salary, or last time I checked.

They aren't isolated of course, SV is expensive because SV has money. Rentals go up because people keep paying stupid high rents, property goes up because people CAN afford it. Rent seekers keep pushing their luck and it keeps working.

I have become interested with the real value of software, and how getting rid of stupid high wages could be a great thing for the industry.

As an analogy, if a country has reasonably priced infrastructure workers (laymen and engineers) it can afford to build the infrastructure it's community needs. If you blow your annual budget building 6 miles of train line, you'll never have high speed rail. Real world example: Australia, one of the richest countries in the world, notoriously high infrastructure costs. While the rest of the world is speeding away with high speed rail, we could barely afford a two stop tram extension in the CBD.

Now have a think about all the software that doesn't get written because it's prohibitively expensive to make it, lots of boutique applications for specific needs, or local communities that need software to help with problems in their community. There are probably a lot of companies that could really do with an inhouse software team, but would never entertain the idea on account of the cost.

Is Australia and HSR really a good example of this? I would think the only viable route would be Sydney-Melbourne, and that seems far enough apart to be directly competing with air travel, likely a major reason for it to be marginal profit-wise.

Also Australian workers are no doubt well paid compared with some, but compared with the U.S. or Western Europe? Taking into account cost of living etc.? Certainly engineers in Australia in general don't seem to be getting SV wages.

I can confirm, I moved from Seattle to Sydney. It's not even close.

Single data point on new grad s/w engineer salary at small/medium business in Melbourne, circa 2015 ~40k in USD.

we have generally higher wages and prices on the low end (that is, the rest of the population and high minimum wages), and comparatively lower wages compared to the US coasts for tech/stem. That high minimal wage and remoteness affects the price of a lot of things.

That being said, the original poster is a little bit off, as both Sydney and Melbourne have inner-city transport options and infrastructure that outcompete practically all American cities in that regard, and punches pretty damn well on a worldwide basis (behind only a few cities that are notable specifically because they are world leaders).

You're right that Melbourne and Sydney infrastructure outcompete pretty much all US cities, but the punching above their weight on a worldwide basis is Australian mythology. I've lived on both and several cities in Europe and Melbourne and Sydney are behind pretty much every big city in Europe and Asia. Public transport for example is absolutely atrocious, the state of the roads are extremely poor...

That reminds me of a story. In 2009 I flew into Sydney with a team of 20 people and 40 duffle bags, and the regional airline to Melbourne refused to check half the luggage despite us having a pre-arranged letter from them stating otherwise. So, a team member and I rented a car, bought a SIM card and several Red Bulls, and drove to Melbourne to join the rest of the team the next morning. With the international flight, that was a very long day!

Many contractor shops have terrible wages yet they charge eye watering prices. You can’t improve the costs here by pushing the worker wages down. All that money is just going to accumulate in jeff bezos bank account

High Speed Rail is not being built because no one is sure it'll be used, whereas expanding public rail in the cities is always going to be expensive because you're renovating around a dense urban area. It's also non-optional - Sydney's traffic problems are bad, and getting worse. We either do something now or watch as the CBD eventually dies.

Public HSR even going out into the sticks gets rapidly surrounded by commercial and residential real estate rent-seekers, and prices quickly (within 10-20 years) arrive close enough to CBD parity to again price out young families. You would need something like a community land trust or transit authority trust that locks up the land and locks in the basis pricing along the rail line about 1-2 km out on either side of the rail, and around a 3-6 km radius around the terminals, with a taxing jurisdiction about double those radii, that gives the families a shot at entry without the same housing pricing dynamics we see now. That trust would have to plan for incremental, systemic densification on a self-funding model based upon the "rent" charged through taxes. Otherwise, the funding for densification evaporates into land developer hands through the years, because it is non-linearly more expensive to densify than spread out, but the energy utilization and efficiency is much lower and higher respectively per capita with densification than spread out. Land developers are valuable, but it is unfair to expect them to behave contrary to their incentives.

Two different groups of people. The ones complaining about location based pay are the ones who would rather work in cheaper cities.

Of course getting paid Bay Area salaries while simultaneously living somewhere you can buy a big cheap house is a great arbitrage, but not achievable for many.

But many engineers can work in the Bay Area for 10 years to become a millionaire then move elsewhere, buy a house cash and retire early (or work a lower pay job if they feel like it).

> But many engineers can work in the Bay Area for 10 years to become a millionaire then move elsewhere, buy a house cash and retire early (or work a lower pay job if they feel like it).

This sounds good on paper, but what you’re saying is establish roots in one place and then rip them up (take your kids out of schools, away from their friends, leave your friends, hobbies, etc). 10 years isn’t exactly an in-n-out stint on an oil rig.

On the coasts it's normal to not have kids until your early 30s, so you can definitely graduate and work 10 years in the Bay Area before moving elsewhere and establishing a family.

Frankly I would be ok with that.

The situation in the valley developed in the 90s and 00s, so that companies could be located close to their investors. That was a time when remote work tools sucked and work practices forced people to be in the same office as the founders, so it made lots of sense that the proximity to capital spiked rents and comp to match.

But now, post-pandemic, remote work is the norm. The founders can relocate to the valley because investment finance is largely a relationship game and those are still way better done in person, but there’s no longer any reason the technical team needs to be located near the founders or even each other.

There is huge disparity in engineering salaries — if you work for a smallish company in a rural area you’re probably making $80k/yr for doing the same job someone in the bay gets $175+ for. Ideally it will work the other way around though — the folks making $80k are much more likely to jump ship for a remote job that pays $125k than the folks making $175k are to jump to the same job.

Of course, if organize via collective bargaining we can likely push that even higher, so listen to your union organizers.

I always assumed that it the high paid jobs in SF were proper software engineering positions as opposed to line of business apps that lower paid jobs else where often are?

What is "proper software engineering"?

Calling it "proper software engineering" is little pretentious at best, but there is some distinction to be made between software engineering in the bay area and most software engineering elsewhere.

When we think of SF software, we think of software created by a company whose core product is the software itself, especially when the end-users are individuals or other software companies.

This is quite a bit different than most software developed outside of the bay area. Most of it is either in-house stuff or industry-specific B2B stuff. In these situations, the software doesn't have to be pretty, it doesn't have to use cutting-edge tech to woo investors, resource utilization is much less important, and hell - it usually doesn't even have to scale. It just has to work. It just has to make someone's job incrementally better, and it'll be a success.

This software can be tremendously valuable, and creating it has its own unique challenges, but the job is indeed a bit different than software engineering in the bay, and the compensation is different as well.

There's a wide range of salaries. The highest paying companies will pay $175+ to a new grad. A of jobs pay $200k+ with equity for senior engineers.

175K seems kinda crazy unless that's total yearly compensation including equity. These days even interns are making 80K+ though. The crazy SV money is in getting early equity in a company with enough secret sauce to make it long term, though, and those opportunities don't usually come with big salaries right away. It's also a very high risk way to be compensated. If you are in the position to do so, I suggest focusing on finding a job that's a good fit for your skills, work style and risk tolerance. Let the compensation details fall into place from there. Assuming you've joined a good group of people working on a real project, things will probably work out. (You of course need to be responsible for yourself and understand your financial situation. It's too easy to miss a deadline and lose equity options, for example.)

Yeah, I'm including equity. Equity at a public company like Google is liquid and easier to value. But usually new grad offers don't include a lot of equity. I'd say that pre-ipo unicorns can also be a great option if it's available to you. Base salaries are usually high, and equity can end up being really valuable. Recent IPOs have made a lot of millionaires.

But I do agree with you, it's high risk and there's a lot of luck involved. And it's much more important to find a job that's a good fit for you.

But collocated teams are still more efficient - there's plenty of studies that prove that.

And my current job quite often has multiple teams from multiple employers/agencies from multiple time zones - even being able to have key meetings with all hand present would massively speed up - we could have avoided so many problems and delivered things months quicker.

In my experience, the efficiency benefits aren’t as clear-cut as you think. I have a client who is a big Fortune 10 company, with most of their engineering teams located in the same high-rise office building for this collocation efficiency benefit.

They’ve actually seen a huge increase in productivity by moving to a virtual model during the pandemic — exactly because nobody is wasting 2 hours of their day waiting on elevators or waiting for meetings to start. People have more autonomy to block off their day and there aren’t the distractions present in a normal open office.

If I were to informally poll all of the product development organizations I work with, I would expect to see at least 90% of folks want to maintain the remote workplace going forward. They’ll still probably go back to some level of in-person work later this year, but the difference is that remote will still probably be the default for most folks. I don’t think we’ll ever get back to a model that assumes all or even most of the team is located in the same room — it’s just too much better to do things this way.

Well I normally work with a well known brand and we often have main client 2 -3 locations two or three agencies agencies plus our dev/project teams a Liviv .

Trying to get things done properly is very hard if we could have even kickoff meetings with every one in the room and have printed designs stuck to the wall

Yeah, that’s why I think long-term it’s going to be coming into the office a few days a month for meetings, and WFH the rest of the time. Productivity is up and people are generally ok with the remote work situation — it’s the fact that they have to babysit their kids and can’t go anywhere for a change of scenery that’s causing the stress.

And frankly most of the dev projects I work on are globally distributed anyway, so you’re never getting everyone in the same room to begin with.

Not having it both way is an argument to fairness. You should want fairness in a game of checkers. It was never a thing in employment anyway nor will it be.

A high local real estate price is a reason you can't profitably work for less and its something you can profitably express to an employer if they will take it into account in order to access the local labor market.

A lower local real estate cost is a reason you could work for less not a reason you ought to want to.

You absolutely should try to have it both ways to the greatest extent possible because they are too.

At the end of the day, it is neither a matter of fairness or formula, it is a market, supply vs demand. If companies switch to remote working from any location, it will be easier to find a cheaper workforce, the equilibrium will go down. If you don’t like the new rate, find an employer that will pay more. If there isn’t one, then the new rate is a fair rate.

I am not sold on full remote working for most companies. I am not even convinced the little covid experiment demonstrated anything, as companies still benefit from employees knowing each others from before the lockdown. Long term the effects in term of productivity, employee morale or culture may be quite different. A compromise is having more local offices, but even then, everywhere I saw it before, it creates a “them” vs “us” between offices, people feel remote from the centres of decision, etc.

To me, the "little covid experiment" kind of validated the value of an office: Situational awareness. Previously, it was so easy to grab a coffee or lunch, and get an overall awareness of who is doing what. I'm still struggling to find a substitute for that.

Not sure why you are downvoted. I observed this as well. One manager hired a few new grads during covid. I spoke with them over Zoom to introduce myself, seemed like really smart and passionate people. One later told me that they are really lonely, managers are rarely there to push them / give them work / check up on them. I bet they feel awkward .. they're barely working, they don't know anyone in the company, and no one really cares about them. Perhaps this is just a symptom of mismanagement but I bet they feel invisible, they're probably asking themselves "why am I here? oh well the paycheque is nice"

A good question is if a local workforce drawn from major hubs of civilization doesn't add value why are tech companies paying so much for it now?

I actually agree with you that this is not actually a remote experiment.

But -- and I feel like I'm alone in this -- my personal observation is that even for teams that knew each other before full time WFH I've noticed the teams _mostly_ are not doing new and challenging projects. There's a ton of work and small iterating possible in any company, but I notice all the challenging projects have been punted - or are moving very slowly.

My personal conclusion is that remote work does not, in fact, work well, at least for some types of projects. I can totally see UI-heavy stuff working out, for example, but not embedded or high complexity projects.

This holds true for junior engineers, but not for seniors.

Raises tend to be percentage-based. The junior making 200k in SF may be worse off than the junior making 100k in Pittsburgh.

But the senior making 400k in SF is much better off than the senior making 200k in Pittsburgh.

Since Silicon valley is that one weird place where it takes five years for a junior to become a senior, taking that job in Pittsburgh is quite short-sighted.

> You can't have it both ways - either your general cost of living is taken into account in your salary (location-based pay), or it's not.

Cost of living allowance/adjustment (COLA) was a retention strategy originally designed to give workers being transferred overseas and to large metropolitan areas more money, not less. You should do some reading up on HR practices if you want them to stop taking advantage of you.

Was approached by a headhunter for a role in Bratislava for Amazon. They were giving a 'generous' salary of €20k (net) per year (it was a few years ago). The headhunter was desperate and wanted to convince me that "this is a lot of money!!!" (for Bratislava).

My simple counter was that "if I save 20% of my salary per month, I will have 4k in the end of the year. If I take an €60k (net) job in Frankfurt and again I save 20%, I will have 12k". Why would I 'sell myself short' for 8k of savings per year? It only made him angrier because my narrative did not match his sales-pitch. I never got to work for Amazon (or anyone else in Bratislava).

Location matters.

If you want €100k then don't look in Bratislava.

If you want a 'slow calm life' (away from the madness of London/Paris/etc.) go to Bratislava or Ljubljana and be happy with the €40k.

> You can't have it both ways..

No but people love to complain.

PS/Addition: it feels like "bait and switch". It's like hiring me in Bratislava, giving me a small (net) salary and ask me to work from London. I wouldn't accept that. The employee would also feel cheated the other way around. And with that said this is my favorite cities' cost comparison: https://www.numbeo.com/cost-of-living/comparison.jsp

Ljubljana is lovely for a vacation by the way. Slovenia is a very beautiful country. Unfortunately we were sick with a cold for most of our stay and I didn't partake in the beer fountain or drink nearly as much wine as I wanted to. Our landlady was a bit uptight and got upset that we were hand washing clothes in the bathroom sink, but with the communication barrier I don't think she fully appreciated that we were dealing with sick baby throw-up 3+ times a day...

> it feels like "bait and switch". It's like hiring me in Bratislava, giving me a small (net) salary and ask me to work from London.

Many IT companies in Bratislava hire local people for local salaries... and then make them travel to other countries exactly 49% of the year (so they still pay taxes locally); the remaining 51% of time working for a foreign client remotely from a local office.

My friend had a job where he had to fly to a Western country every Monday morning, and fly back home every Friday evening, to maximize the number of working days within that 49% of the year. (This way you can work abroad for 36 weeks a year, instead of "mere" 26.) And of course he had to spend 8 hours working each Monday or Friday, so he left home on Monday soon after midnight, and arrived home on Friday shortly before midnight, so he basically spent the whole weekend sleeping. (He already quit that job.)

You're right. I think so much of this discussion is missing the forest for the trees though. The bigger picture question is whether dense, expensive metropolitan areas, or other locales with expensive cost-of-living are the right fit for many jobs. I think there will be major changes in the next five-to-ten years.

> But HN has a highly disproportionate number of Valley and NYC residents. They're all getting [big] pay cuts if you get rid of location-based pay. The biggest (but not only) reason someone in SF makes $250k+ total comp is because it's so expensive to live in SF.

I'd argue that this isn't really what location based pay is worried about. In this case, you're being paid specifically be close to some location or collective building because your employer values that collectiveness. That's okay. That's the company communicating "we value the ability for you to be here, in person, with this group of people - so we're going to incentivize it".

The problem with location based pay is when an employer says, "You can work from anywhere you want, but we want to know where that is so we can pay you less". You provide them the same value from mid-city America as you do in rural America. They simply want to pay you less when they can.

This exactly. If they want me to live somewhere specific they should pay me more to live there. If my employer isn't requiring me to love somewhere, I should be compensated for my value and work, not judged for living where and how I choose.

> I should be compensated for my value and work,

No, you are compensated for how much someone doing the same work would demand.

Yes, so if we all demand that that isn’t based on where we live we should be fine right?

I don’t understand why pepple keep repeating this. Obviously we are paid what they can get away with. We’re just trying to change what that is. If everyone starts accepting location based pay, we’ll be fucked in the long term.

Or, well. It’s strictly better for me if I get paid SF wages anywhere in the world.

A far more likely outcome is that this would converge on being paid something like Prague/Barcelona wages anywhere in the world. (Think 50-75% of Kansas City, Des Moines, Pittsburgh wages today.)

There is, obviously, incredible incentive to defect. If you're going to demand 100% of SF wages, I can improve my lot by demanding 99%. Then the next SWE can undercut me at only 98%, and so on.

You are assuming that the employer had many candidates to choose from. Usually, that is not really the case.

Like the original comment said, most programmers probably need to read a book about negotiation so that they can clearly communicate their skills and why they are not easily replaceable. Once you're established as an unique professional with an unique skill mix, you'll be compensated for how much the team to replace you would cost.

You don't need an exact equivalent. You simply need the idea of an equivalent and an idea of the cost/value of such a candidate.

A candidate can't ask for an obviously uncompetitive salary, but they can ask on the high end for what a company expects to pay for an employee.

Yep, both sides have a BATNA

> so we can pay you less

Setting aside that obviously, on an individual level, an employer will typically want to pay you as little as they can get away with, this isn't how location based pay works at a macro level.

Saying "You can work from anywhere you want, but we want to know where that is so we can pay you more" is an equally (in)valid statement since it's about pay distribution.

> Remote work floods the supply with lots more available workers than they can find in any one city, so salaries for those roles go down.

You’re correct, but that’s not what’s happening here. Facebook isn’t paying remote workers uniformly less than in person workers. It is paying different amounts for different remote workers depending on where they live. That makes no sense given that, as you observe, there is a single national market for remote workers. The fact that Facebook can do that is an indicator that it either has market power in the employment market for programmers, or that we’re in an odd situation where the market hasn’t reached equilibrium.

> the full value of the work you do > That's kind of an upper bound on what the company could pay you

No. If you have a monopoly on a skill/knowledge/certification/etc, then in theory you can extract rent from the business, potentially up to the profits of the business (well, profits less the returns required to cover risk of capital). The maximum you can earn is far more than the value you create.

Your comment could justify a divide in pay between in-person and remote workers. Presumably, the ability to be available in person is valuable in some companies and the market for that is smaller, so more compensation.

However, what it does not justify is location-based pay. From the company's perspective, there is no significant difference between a remote worker in New York City or Birmingham, Alabama.

It’s funny how the power of markets seems so easily used to reinforce the current market outcome. Like wage prices are artificially high or right where they should be because the market must be right. Without looking at the factors closely (like one should when discussing labor especially), there’s the possible outcome that current wages are held down below their market clearing prices by external factors and market power.

The market is always right pretty much by definition.

The “external factors” you speak of are the market conditions in which the market operates. You can change the external factors and the market will rebalance to a new equalibrium but that doenst mean the market was wrong before and correct now.

I still think what I said is true basically by definition, but yeah fair enough it does beg the question why companies don't hire exclusively in cheap areas now, driving down the market rates in expensive cities.

I think supply and demand is still a big part of the answer. By square mileage the potential locations where employees can live has grown by 200x by opening up to remote work anywhere in the US (napkin math, US is 3.8 million sq miles, bay area and tri-state area combined are ~20k sq miles). But obviously the number of available engineers hasn't expanded by nearly that much, engineers are much more concentrated in the areas where most of the jobs have been concentrated up until now. I.e. companies still can't afford to limit their supply to remote only, just as they increasingly can't afford to limit supply to bay area only.

Then there's also the perhaps more controversial issue of skill & experience. The most in-demand engineers are the people with experience at Google, FB, etc. and these people are concentrated in the places where these companies are. Ambitious people also have self-selected to live in these hot markets for years. You could argue that these proxy factors shouldn't matter and companies should be measuring skill directly, but as an industry we still haven't cracked that problem. So on average, a remote engineer in NYC probably is more valuable to most companies than one in Birmingham, Al. Like it or not, there's still a lot inertia to overcome here (and maybe even a little bit of validity to these patterns).

This is pretty much wrong, the evidence is against you, you are paying for in-location developers.

There are plenty of developers who speak great English in the EU, many natively in the UK and Australia and Canada.

Why are these not all getting heavily poached by SV?

Because SV value in-person developers, so have driven up the pay for developers in SV, but in Europe a mid-level developer is still on something like €40-50k.

Remote work from Europe for a SV company is problematic, there's practically no overlap of working time so the European workers needs to work late evening and into the night to be able to stay in touch with the team. Not that many experienced (i.e. older and with families) people are ok with that.

timezone and cultural differences.

This line of thinking breaks down since those companies have a much larger pool of workers to draw from, but they are also competing against every other company who is hiring remotely in their country.

In the end, employers are free to make whatever excuse they want to try to pay less, but I will respectfully decline to take a 50% pay cut to produce the same value for them :)

>Interesting choice to invoke market value to argue that the salaries that the market has settled on for remote work are too low.

My friend who works remote makes just as much as I used to working in the office (when I was in industry). He's not getting "location-based" pay, so I'd say that "the market" has not unanimously decided on that quite yet.

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