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Comment by xupybd | Hacker News Reader

*2. People are paid what a replacement would cost

Let’s suppose for a moment that employees are interchangeable resources without discernible differences and companies are profit maximizing entities. How is it possible under such assumptions that 2-5-10x salaries exist when 1x replacements are readily available elsewhere? To argue that people are only paid what their replacement would cost also requires an explanation why a garden variety remote employee (or a team of four experienced veterans) is not a replacement for locally grown organic talent? So far there is no convincing explanation to back that up. *

Because companies don't always go for the cheapest labor. There are other factors...

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I'm not sure what you are getting at, could you please elaborate on some of those factors?

Sure to name a few:

1) Managing remote workers is a harder task than managing in office employees.

2) Time zone differences can slow work.

3) Cultural differences can cause problems with team cohesion.

4) Tax differences add to the cost of distant employees.

Thanks for the clarification. I agree that these are valid points, but subtle differences at best and mostly solved for multinational companies. Not something that would justify such disparity in wages. On top of that there are obvious advantages to having a distributed workforce as well.

1) With hybrid work on the rise managing remote is already a task, granted there are different levels to it

2) Similarly time zone differences can be taken advantage of, there are people to handle on call during normal working hours and cover national holidays for example. Also, some kind of work not depending on cross timezone collaboration can be done faster e.g. answering customer inquiries.

3) Also there is strength in diversity. A diverse set of experiences and backgrounds can help not to be blindsided by a monoculture for instance

4) Indeed, taxation can add accounting overhead, but even if we take that into consideration local wages will still dwarf the full cost of remote teams in some cases.

While I find it plausible that someone would put more value in having local employees even in a multinational setting, I would argue that is the exception rather than the rule.

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