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That's messed up. Unless there's a separate component like local-cost-of-living-adjustment where you get extra for living in a high-rent area.
by MichaelGG 9y ago
That's messed up. Unless there's a separate component like local-cost-of-living-adjustment where you get extra for living in a high-rent area.
- fragmede 9y ago...yes? Cost of living between Mexico to San Francisco probably in the neighborhood of 4x, depending on which part of Mexico. 500000 MXN rounds to $25k, which is 1/4 of $100k.
- viljar 9y agoCost of surviving(food, shelter, boose) - yes. What about cost of having trip around the world for vacation, building your retirement fund, price of the iphone, car?
- jldugger 9y agoWell, the retirement fund might be more CoL adjusted, if you intend to retire to the same region you currently reside.
- MichaelGG 9y agoYou shouldn't have to decide that up front. Plus someone living in a high-rent area then gets a huge retirement bonus and allows them the option to move somewhere else. Someone in a low-rent area doesn't get that option at all.
- jldugger 9y agoAll true, and yet I imagine a lot of people think in different terms about retirement.
- EduardoBautista 9y agoiPhones and car loans are more expensive here in Mexico.
- foobarbazetc 9y agoit's not messed up. Otherwise you're overpaying by 4x compared to local positions. Which means the person will probably never leave if they're unhappy etc.
- MichaelGG 9y agoIf it's more than just a cost-of-living bonus for high-rent areas, then yes it is. You're saying "Hey engineer A, you're just as good as B, but we're going to pay you less because people that live near you aren't getting paid as much. If you'd like a raise, move somewhere where engineers get more money." Again, if it's just the cost-of-living bonus (like, all our engineers get $80K, plus $X/month where X is average rent and groceries, plus Y% for taxes) then it's fine. Otherwise it's valuing someone less purely on their geographical location. Edit: Also, really, overpaying so they might be unhappy? "We're giving you less money for your own good!" Presumably if they're a world-class engineer and can work remotely at one place, they can find another remote job, too...
- rlpb 9y ago> "Hey engineer A, you're just as good as B, but we're going to pay you less..." Let's face it. As an employee, you want to earn as much as you can. As a company, you want to make as much profit as you can, which means that you base your target pay on market rate (be it above or below market rate). Market rate is set by the competition. Really it's "we're going to pay you enough that you don't leave to work for someone else", and that's it. If an employer gives you a cost-of-living bonus for high-rent areas, the reason is that they're competing for you against other companies who do the same thing. The same applies to any pay difference based on locality, whether local or remote. It simply depends on who they're competing with for your services. This isn't evil. It's how the market works.
- MichaelGG 9y agoDon't think I said it's evil, just wrong. Obviously it's how the market works, and I've taken advantage of this myself. Just saying that, aside from "well, we can get away with it", it's not that defensible.
- eloisant 9y agoIt's not messed up, it's supply and demand. Someone living in SF will have many high-paid opportunities so they have to match that. On the other hand they know someone not willing to relocate won't have the same opportunities locally or with remote jobs, so they can afford to pay them less.
- MichaelGG 9y agoThat doesn't make it right. You can get away with ("afford") lots of things that aren't correct to do.
- bbcbasic 9y agoEasily hacked. As long as you stay in the timezone, start off in expensive city, then quietly move to cheap city.