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Comment by TylerE | Hacker News Reader

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TylerE

Why is it crazy if, say, a 30% paycut lowers your CoL by 50%?

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Why on earth should you take the pay cut? That savings is yours, not the company's.

If you take a pay cut for relocating to a lower CoL area, you are being stolen from.

Did you not read the part where their cost of living dramatically dropped? You know, the entire comment you replied to?

Did you not read the part where the salary dramatically dropped? Why is it justifiable to pay someone less for the same work, just because of where they live? If I find a way to produce the same output but with lower expenses, the difference is my profit. I don't share that with the party purchasing my output so they can fucking steal it.

What does amount of work have to do with anything? Justifiable? What? This isn’t unicef. There’s no moral question here. It’s a bunch of tech assholes divvying up the spoils from further computerising the modern human experience.

Then the notion that anyone is being stolen from is just completely ridiculous.

Thinking that they’re paying you some intrinsically fair rate for a quantifiable unit of work is nice, but not true.

They pay the minimum they feel is required to retain you and prevent you from going to a competitor. And if that amount exceeds the cost to hire someone who can do your job as good as you, they want you gone. That’s it.

They know that working remotely from a place with a lower cost of living is a perk. They know even if you take a pay cut, you’ll come out ahead. They know the minimum they need to pay you to retain you has gone down.

It's hugely idealistic to believe that people get paid the same for the same work.

Look at an international circus contract, for example (I was in one). A group of performers from different countries performing in the same place get paid different amounts for doing the same exact role in the show (up to 2.5X difference, by the way) just because the company can get away with it. It's about the cost of the best alternative (for the worker), not about some intrinsic worth of the work.

Living in a highly sought-after area is a luxury and people who forgo luxuries to save money should not be subsidizing their coworkers who do not. Should your coworker that just bought a Lamborghini get a raise to compensate for their costs too?

My coworker should get whatever raise they can successfully negotiate. Buying an expensive luxury car is probably the kind of lifestyle event that prompts a lot of people to think “I could do with more money” and campaign for a raise. So kind of but not really.

As for whether you should subsidise someone, if it makes you more money overall then of course you should. Regardless of what luxuries they have.

I think ideally we move away from the whole "negotiating for a raise" idea since that advantages people who are low in agreeableness (and exacerbates gender pay ratios).

We should have open pay scales by position with well-defined criteria for bonus / raises. Negotiation should have little to do with it, ideally.

What has cost of living got to do with anything?

People are more likely to agree to a lower salary if they have a lower cost of living.

People are selling themselves short. Your salary and your cost of living aren’t connected. The value you deliver for the company is all that matters.

I don’t give a shit about “value delivered” or how much I “deserve”. I care about how nice my life will be. If I can live a nicer life by moving and taking a pay cut and a large CoL cut then I certainly will take it.

You can get an even better life by moving and not taking a pay cut.

I agree that if you're working remote, cost of living should not really matter. But I also disagree that you should be paid an SF salary while working remote - part of the reason for the exorbitant SF salaries was actually the cost of living (and since you had to show up in person it made sense to provide for it). So likely remote workers should have more or less similar compensation, probably indexed to some median city in the U.S. - if you want to live in SF and work remotely - too bad.

Pure value rarely has to do with your salary; it's more about supply/demand. If we doubled the supply of people doing your exact job right now, your ability to negotiate (and your salary) would probably drop, even though you are delivering the same "value" to the company (unless value encompasses supply & demand).

(As I've mentioned above, I've seen pay differences in circus of 2.5X for performers with different passports doing pretty much the same exact job in the same exact show - the value they were delivering was the same, the only difference was country of origin). So pay is also about cost of best alternative.

What is the revenue per employee of your company?

It's bizarre considering that the company benefits as well when you move to low cost of living areas. Those tend to be low tax states so the state tax burden associated with employing you that the company has to pay goes down. Its absurd that they demand additional savings on top of that.

The portion of payroll taxes paid by the employer are entirely Federal aren't they?

The difference in income taxes is paid (or saved) by the employee.

There are additional state and local tax programs like workers comp and disability insurance, job training, paid family leave, state income taxes if your entity is registered in that state, local taxes, etc. As you might expect, higher cost of living states tend to be more liberal and have more programs that employers are expected to fund. Moving employees out of those states saves money.

Does your company adjust the price it charges its customers based on their geographical "cost of living"?

Yes. Google ads are much cheaper in my rural area than a large metro area.

Food, gas, plumbing, etc are also cheaper.

Tons of companies do. I forget the exact number but I was paying like $3/month for Spotify when I was registered as living in Indonesia and paying with an Indonesian bank card.

Steam also does this. Massively different prices for different countries.

NBA also does this for League Pass. A simple work around is to use a VPN to connect from India and buy with rupees. You have to sign in again with VPN each time though when loading a video, disconnect from VPN and then refresh.

Of course, that's the very meaning of cost of living.

That’s irrelevant. It’s up to you to make a choice about what is the best value and suits you best. Rather than paying a high CoL on principal even though you would be better off somewhere else and on a pay cut.

Doesn’t your net savings at the end matter?

For me at least the added COL is more than offset by the higher pay.

Edit: This is more a pre-Covid comment. No idea the math for remote post-Covid.

It's not what you make, it's what you keep.

And improves your quality of life as well.

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