I don't get your reasoning on why you expect that people will have to take a pay cut for working remotely. Would have thought it would be the opposite. Office space, hardware and energy cost a bit.
The negotiating power of a company, which is practically a group of people, is much higher than that of employees, which are just 1 person. A big company loses what? 0.00001% of its revenue if it doesn't hire the right person for a specific position? An employee loses 100% of their revenue if they don't get hired or get fired.
So companies can pretty much do what they want (up to a point where they cause uproar and those individuals to bunch up into a group fighting the company).
If you're a skilled developer, I urge you to exercise your negotiation power. You have much more than you think.
The problem is, most people aren't willing to walk from job offers. Walk. There are more.
skilled developers are much more common than people think. We get the impression of rarity precisely because we limit the search pool to local areas where very often many top companies are competing for the same talent pool.
But at the end of the day there are a ton of super smart developers in EU, China, India, Japan, South America or even lower to mid COL areas in the U.S. who are more than happy to take 50% of Silicon Valley pay and just do as well of a job.
At the very end of the day vast majority of software engineering is far from rocket science, and you don't need someone who can re-invent MapReduce out of thin air just to refactor that clusterfuck of Redux code.
[0] - https://about.gitlab.com/handbook/people-group/employment-so...
* ~900 million people for where they use companies (and probably in the low tens of million of possible employees)
* probably ~2 billion people for where they use contracts (and probably some more low tens of millions of possible employees)
Those are <<huge>> pools of people.
This might not mean much for someone who made their career in SV, but certainly means a lot to an Indian, Russian or Brazilian developer.
If this bubble bursts then yeah painful changes will likely come.
Recent numbers at my place of work (looking for a couple of senior hires):
3 months, 200 applicants, 35 full-day technical interviews, 2 offers. 1 accepted. The guy who rejected had a competing offer.
I'm poking around currently, and there's definitely an appetite for companies to get strong candidates in for interview. However, I keep these numbers in mind. The odds are against us.
1. Your line of development is popular (I wish PL/I developers good luck with their job searches!)
2. That you're geographically located in a "hot" location and you can easily relocate (which is frequently not the case, due to family concerns or other concerns) <<or>> you like remote work and are good at it.
3. That you can easily handle interview stress (a ton of people can't) and that you're good at interviewing (which you can improve at, but you need to spend time, plus see: stress).
I'm probably forgetting a bunch.
In any case, the balance is tilted a lot more towards big companies.
I think companies often undervalue the cost of annoying employees in random trivial ways, creating the nudge that causes them to shop around for another job. This is not a trivial annoyance and I understand that the tech job market is extremely hot at the moment so causing people to apply to other jobs and find companies willing to increase their pay by a lot does not sound like a smart business decision.
But maybe I’m wrong or Google have some great internal productivity data that makes this incentivising all worth it to them.
Obviously there is a larger supply of workers in a time zone than a metro area, but there is a larger demand for them too. And a workers can reasonably threaten to move to the part of the US where they would be paid the most.
Software engineer pay is quite different, between, say, London and Paris, or between Switzerland and any place in Europe... And it has more to do with talent competition than cost of living. France or Germany aren't inexpensive places to live in but there isn't as much software talent competition, so pay is still lower there from what I can tell.
You're right that a bigger pool doesn't necessarily mean more competition or lower wages, just a trend towards equalization: some people's pay could move up from access to a pool with higher competition for talent. But the pay for the people whose location puts them already at the top of the pay ladder has only one way to go relative to others who will WFH in the same timezone.
This statement is easily falsifiable.
Salaries for anything are much higher in Switzerland.
I doubt there's more "janitor talent competition" in Switzerland than in France, yet Swiss janitors are paid more :-)
I guess what I'm saying is that businesses as a whole tend to hire people at the lowest possible costs given to them by the job market, not based on what they want the worker's disposable income to be after costs are deducted.
Costs of living do affect the offer side of the market - the willingness of people to take various jobs at various salaries.
What I'm observing in software engineering is places with smaller differences in cost of living than in pay levels, which I'd attribute to talent competition...
One argument for this to be the case is that an employee could reasonably threaten to move to Silicon Valley for higher pay (at another company.)
In reality the supply and demand of employees of particular type determines the "negotiating power", and this can change over time.
So the company can drag even a lawsuit across many, many years, practically guaranteeing big companies are bullet proof.
You’ll make comparatively less working remotely because the pool of workers willing to work remote are higher in supply. Office jobs will be forced to offer higher wages because their supply of candidates has shrunk.
If people prefer remote work and that also saves them time and money then they will probably be willing to accept a lower salary than they will for the same job on-site.
IMHO that's the logic of companies that are suggesting pay cuts for employees that won't come back to the office.
Not my arguments, just what I've seen written...
As I understand it, the rationale behind offering pay-cuts to full time wfh employees is that the pay cut is relative to the employee's lower cost of living. The employer sees an opportunity to avoid including the cost-of-living salary-uplift that is required to attract people to San Francisco etc.
The rationale that Google is citing is that they pay based on location. They say remote workers will make the same as office workers in the same city, which sounds reasonable.