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The fact that employee in SF gets $200k doesn't mean that the labor is worth $200k in Bucharest. It is worth whatever somebody is ready to do the job for and wh
by tooop 7y ago
The fact that employee in SF gets $200k doesn't mean that the labor is worth $200k in Bucharest. It is worth whatever somebody is ready to do the job for and what the company is ready to offer, in this case - SF it is $200k while in Bucharest it is $100k. If the employee is happy with $100k in Bucharest then the salary is fair.
- dragonwriter 7y agoThe fact that the purchaser pays $200k for it means that the labor is worth $200k to that purchaser. Assuming that what they get doesn't vary based on the seller's location, the only reason to offer less for identical labor from Bucharest is because they think they aren't competing with other buyers who are likewise location-insensitive, so that the Law of One Price doesn't apply, and they can optimize their cost with market segmentation. That's obviously what is going on. Trying to sell it with a dishonest narrative about some inherent fairness of scaling compensation to local cost of living is B.S. Local cost of living is just assumed to be a reasonable approximate proxy for what competing bidders, most of whom are presumed to be local and thus location-sensitive rather than remote and thus location-insensitive, are likely to offer. There's no ethical rationale in operation, just cost optimization.