Hacker News Reader

Comment by celeritascelery | Hacker News Reader

> Offering equal pay for equal work [...] Pay people for their contribution and treat all humans with equal respect.

Does any company actually do this? I don’t feel like this is economically feasible. What rate do you pay? The California rate or the Romania rate? If pay the Romania rate then no one from California will work for you. If you pay the California rate then you will be putting way more money into salaries then needed, which could drown your company in hard times. Splitting the difference doesn’t actually solve anything.

I can see in the long run equal pay becoming a reality, especially within a country (same pay for California or Nebraska) because movement is so easy. But it will be long time before cost of living between the poorest matches that of the richest.

View on HN

Other issues folks frequently skip over are legal complications and benefit differences between countries.

If the salary is the same, but an employee in one country has 5 weeks vacation (legally required), but another has 2 weeks, is that equal pay for equal work?

What about when one country says that, if an employee quits (not terminated), the employer must continue paying them for another 3 months anyways? Is this the same carrying cost as employment in a state with at-will employment?

Another somewhat related topic is that if you employ a single employee in some states, your company may have to pay additional taxes because you now have a “presence” in that state. Do you pay them the same, even though their “carrying cost” could be prohibitive for the business?

This is not an endorsement of any particular approach, just surfacing that things are not as cut-and-dry as they are presented.

At the very least, it's an easier case to make that salaries should be equalized across states within the US. There are a lot of complications to making it worldwide and, yes, it probably means at a minimum that total comp including benefits is equalized, not salary.

To be sure, that means you probably don't pay especially competitively in the highest cost of living states--but frankly, that's probably already the case with many companies that don't have significant offices there.

Why not give everyone the same employment rights, and the same pay?

Nobody said you couldn’t. Go for it!

Well you said 'If the salary is the same, but an employee in one country has 5 weeks vacation (legally required), but another has 2 weeks, is that equal pay for equal work?' like it was a blocker?

If you offer everyone 5 weeks, then hire someone in a country that offers 6 weeks, do you go back and readjust an entire workforce to have 6 weeks? Can every business actually financially support that?

The point is merely that “it’s complicated” (as I comment at the end), not “this is a blocker”.

> If you pay the California rate then you will be putting way more money into salaries then needed, which could drown your company in hard times.

This doesn't follow. You can still be profitable by hiring people who add value, and paying them a consistent percentage for that value, regardless of location. Assuming of course that everyone is working remotely regardless of location, and time zones are a non-issue. (remote vs. local could have legitimate salary impacts, as well as time zone availability, due to potential increased burden on the business).

If your business's profit is based on the ability to exploit reduced living costs, then your business is at least partially focused on trading in salary differences (arbitrage?). That has it's own problems (like splitting your focus), but is probably OK as long as the margin you're making from it is lucrative. As this margin decreases you're spending more and more time trading in salaries and less time focus on your product. That's perfectly fine business wise as long as you're still making a profit, although at some point you may turn into an agency / recruiter (pivot?!?).

If however, your business's profit is based purely on providing a valuable product, you still benefit from a much wider pool of talent (thus reducing overall salaries due to supply) even without exploiting living costs. You can ignore location (assuming again time zone isn't an issue) and pay based on percentage of value. Plus you can still focus primarily on your product, instead of becoming a salary trader!

> paying them a consistent percentage for that value

Except... there's a market. People want to be paid based on a market clearing rate, not on your appraisal of value. And what is value anyway? If a company is in build mode and not generating any value is nobody paid anything?

If your value percentage does't cover market rate, then you might need to rethink your business. Market rate is derived from value percentage across all companies that seek the same talent (and also negotiating strength etc.).

If a company is in build mode, there are other creative ways to compensate (stock, etc.) or you convince investors of future value so you can afford to build it (investors) by paying market rate. An investor who just gave you millions of dollars to build something, probably doesn't want to hear about how you're going to cut costs by hiring overseas talent.

If the only way you can succeed is by exploiting location based salaries, then your business isn't just competing in it's product market, but also competing with every other business that is trying to exploit location based salaries (and there's a lot).

> there are other creative ways to compensate (stock, etc.)

People need to eat, lol.

What? Are we having the same conversation?

I'm saying is that focusing your energies on trying to get location based cheap labour might not be the best use of your time. How am I arguing that people should starve?

If you're building, and paying people in stock, then people can't trade that stock, and they can't buy food with it. So they'll go elsewhere where they get compensation they can buy food with.

Why is that a problem though? Businesses fail every day. Are you saying that paying less for 3rd world talent is going to make or break this business?

What I'm hearing is a bit contrived:

1. You only have enough cashflow to pay exploitative location based salaries. 2. You need talent (can't do it yourself). 3. You can't convince anyone to invest in it. 4. You can't attract talent with a low pay + ownership / stock deal.

Good luck I guess?

> What I'm hearing is a bit contrived:

I’ve literally no understanding of how you arrived at this list of things you’ve heard.

Paint me a picture then because I obviously have no idea and misinterpreted the point you are trying to make.

If you pay "Romania rate" for Romanians then those people can easily be hired by companies which are willing to pay a few dollars extra.

I think we have begun to see this with people hired in India: if you pay "Indian rate" then you get the bottom of the barrel. If you want very good developers in India you need to pay above "Indian rate".

The market for very good developers is no longer local.

What you just said applies to SV too. Pay average you get an average SV engineer that likely isn’t particularly more effective than engineers abroad, the only advantage being physical locality.

On the other hand, companies are quite terrible at determining and utilizing actual value. So I do think there’s a lot of really good developers that aren’t making “above average” rates for whatever reason. heck, see all the engineers that go off and start companies that they then sell back to the behemoths for several multiples more - they take a pay cut in the short term because they believe they’re being undervalued wherever they are.

Very good developers in India generally don’t make $500k+ USD/year, which is the going rate for very good developers in the Bay Area. Salaries are heterogeneous within areas, but they’re still also heterogeneous across areas even when you hold talent level constant.

> ...especially within a country (same pay for California or Nebraska) because movement is so easy.

I can't entirely agree with this.

Yes, it's easier to move if your job is completely remote. But for many people, the most significant barriers are not financial problems but mental ones.

Even though I'm single, I have few friends near my house and am satisfied with my current living environment. It's a bit scary to move to somewhere I don't know. And if I lived with a family, it would be much harder.

That's why the house prices are skyrocketing even though more people have started working entirely remotely. The majority of remote workers are still living in a big town and don't plan to move to the countryside in the near future.

A lot of the more desirable countryside or smaller city prices have gone up as well.

Not that I really disagree. Especially if you're settled in there are a lot of frictions to moving--more or less depending on circumstances. Absent a need to move for a job or whatever, you're talking at least a lot of time and at least some amount of money. So if you're "OK" where you are, the default is certainly to stay put.

>That's why the house prices are skyrocketing even though more people have started working entirely remotely.

I don't disagree with the premise prior to this, but I do think a lot of people overestimate how many permanent remote workers there are, and by extension, how big their influence on the housing market is.

Housing prices are skyrocketing in areas with no industry lol

I don’t understand that either. Even on-site jobs don’t pay the same whether you’re in the US or Europe working for the same company - IT salaries in Europe are, even in countries like Ireland and Germany, lower than their US counterparts even though the taxes and cost of living can be higher.

Even in the US salaries are different based upon where you live - SFO or NYC vs. Kansas.

If citizenship, or lack thereof, prevents someone from moving to another location in order to work from there, then equal pay across those borders doesn't make sense. But California vs Idaho (states in the US)... they should have equal pay.

If I move from California to Romania will I get a lower salary? I call this BS.

Hotjar does. Pay for the same role is the same band regardless of location.

I work remotely for a company which does this. Every role and level has a salary range, independent of location and close to german standards.

> close to German standards

Paying everyone the floor rate is one approach, lol.

> Does any company actually do this?

I think for example Igalia pay literally every person the exact same figure, no matter their experience or location.

But does everyone at Igalia do exactly equal work?

Who decides what work is equal?

Same tasks, same responsibilities might be a start?

That’s expectations, not output.

Reply on news.ycombinator.com