Will wages in, say, Lagos or Buenos Aires rise to SF/NYC levels? Or will the reverse happen?
Economics says that it depends on the value of the labor, but cost of living matters too (or at least, has in the past within say, the USA).
I think this essay https://blog.pragmaticengineer.com/software-engineering-sala... shows evidence that says the answer is "yes", that we'll see a weird fracturing of labor markets.
What I think you can probably safely say is that, within the US say, you'll probably have some degree of normalization of salaries over time. You'll probably still have outliers with the biggest/best-paying tech companies, some areas of finance, particularly well-funded startups, etc. But, as was already the case before, a lot of companies simply won't even try to match the top-tier salary bands. And mostly they'll be fine because hiring practices are simply random enough that no one really skims the cream with their processes.
I know that it was big surprise for FB and other big tier 1 companies when they started to hire remotely was that it was not actually easier to hire remotely than hiring in NYC/SF. The remote pool ended up being pretty small.
I think at this point, the meaning of competent is the top 1% of engineers
EDIT: But let me specify - the original premise to this was that there are already two comparable candidates in SF and somewhere else in the world.
For the discussion, let's assume that the whole world of IT candidates is now your pool of potential employees. India alone seems to produce around a million computer science graduates a year. Europe, probably in the same ballpark. Rest of Asia? Who knows. Same for Central and South America. That's each and every year, new candidates that are added to the pool (minus those removed).
Even the absolute outliers would result in a sizeable number.
You are right, not all of these might have the required knowledge (if looking for experience hire), or some other number of factors.
But it would probably be easier to just start poaching top talent from top companies around the world.
I've worked with overseas devs who I'm pretty sure were smarter than me (PhDs, ability to go deep on tons of technologies) yet didn't have the skills needed to quickly turn around a request from a business person and build the right feature.
I think salaries will level out to a certain amount inside the US and other countries - but it's going to be a long time before highly competitive companies wouldn't be shooting themselves in the foot by eliminating themselves from consideration by coastal devs, experience-wise - but cross-country language and communication barriers (especially when timezones are involved) will remain very high.
Companies have already been trying to do that sort of outsourcing for 20 years, and yet US salaries have only gone up in that time frame. Solving "working remotely in the US in a few timezones" is a very different problem than solving the persistent, unsolved-for-decades "hiring programmers in a different country" problem.
I think this will normalize over time, but it will normalize to no one getting good mentorship as all the senior folks work remotely.
I've personally worked with engineers at "hot SF startup" and also engineers from Croatia. Both were folks I'd consider of equivalent skill. #anecdata
> I know that it was big surprise for FB and other big tier 1 companies when they started to hire remotely was that it was not actually easier to hire remotely than hiring in NYC/SF.
Do you have any articles or references for this? I'd love to learn more about this.
All of the big tier 1 companies have serious strings attached for remote work. I've interviewed at several in the last year or two, and they all advertised remote work but also had weird requirements like "must be within 150 miles of an office" and "for certain positions" and "based on seniority."
Perhaps the reason they are struggling to hire remote employees is linked to the fact that they have poor remote culture AND dubious support for remote employees in the future.
If you pay a top programmer in the Philippines, say $45k/year, that's 10x more than the average dev. salary in Philippines. It would be like offering $1M in salary to someone in the US. You could pick and choose between the best.
You're not gonna get any better candidates if you up that salary to SF-level salaries, like $250k/year. The law of diminishing returns will kick in after a certain level. Comparing wages in city A in country X and city B in country Y is like comparing apples and oranges.
Also third world country savings pretty much limit your retirement options to third world countries. You aren't going to retire in the South of France on a third world salary.
But then again, purchasing a home in SF or NYC is very expensive.