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I've had a related thought: is it ethical to pay a person less based purely on where they live? I understand that there are different cost of living factors for

by daenz 6y ago

I've had a related thought: is it ethical to pay a person less based purely on where they live? I understand that there are different cost of living factors for different places, but that's on the employee's side and should be none of the employer's business. If they employer can pay $200k/yr for a remote employee, it shouldn't matter where they live, and so scaling that value seems discriminatory to me. Anyone have thoughts about this?

pb7 6y ago
Definitely an interesting point. What happens when you are remote in one expensive city then move to a cheaper city? Does the employer need to know where you presently reside? I would think not.
option 6y ago
the pay is based (as it should be) on market conditions, regulations and contractual obligations. Should not be based on ethics - those can vary in surprising ways.
- daenz 6y ago
  I would be inclined to agree with you if your residence wasn't information you were required to give to your employer. It takes the normal market negotiations out of the equation. It's like if your rent was information you were required to give to your employer. They could then make lower offers to people with lower rent, because the market conditions are now warped in favor of the employer.
edmundsauto 6y ago
The US Government, normally a very conservative org, has cost of living increases for federal workers and (I think) military service members. Based on that, I think it's pretty well accepted (perhaps incorrectly!) that it is ethical. Or maybe practical beats ethical.
xenocyon 6y ago
> If they employer can pay $200k/yr for a remote employee It's interesting that folks envisioning a globally uniform payscale tend to posit SF salaries in Hanoi rather than Hanoi salaries in SF.
- daenz 6y ago
  Fair point. I was just copying the parent post's number. Likely it would be somewhere in between, as you seem to suggest.
- Nimitz14 6y ago
  Yeah, these guys are going to get slapped back into reality so hard if this WFH thing really takes off.
- 6gvONxR4sf7o 6y ago
  Not really. I think we just assume that the situations where housing can't keep up with employment would shift the `income minus necessities` equation in our favor, making the massive assumption that we're willing to move somewhere cheap, or that enough other people are willing to move somewhere cheap, or just not move here in the first place. If the necessity of commuting to SF goes away, SF housing prices are less impacted, so it's more like Portland salaries in SF, and closer-to-Portland cost of living in SF.
itslikeroar 6y ago
Yeah employers should pay employees for the value of their work, which does not depend on their physical location. Also, employers always pay employees less than the value of their work and pocket the rest. This is called profit.
bhupy 6y ago
What if we took that thinking and turned it around: The minimum wage for a McDonalds cashier in NYC is $15/hour. McDonalds also operates in India, and hires cashiers that do essentially the same work. If the employe was able to pay $15/hour for the same type of work in NYC, then shouldn't they pay the Indian cashier INR 1,125 / hour? Or what about the other way around, why shouldn't the NYC cashier get paid at the Indian cost-of-living? And forget wages, how about the cost of goods and services? A 4BR house in Columbus, OH can cost about $300,000 — but the same house might cost about $3M in Palo Alto. Is this unfair / discriminatory? The house itself might be identical.
- daenz 6y ago
  I disagree with both of those examples because the physical location of the job/house is the important factor affecting the cost. In the McDonalds example, the physical restaurant is embedded in the community and partakes in the market forces of that physical location. In the house example, same thing, the physical house is embedded in the community and partakes market forces derived from the demand of others wanting to live in that community. The location of the job or asset affects its value. However, in remote work, this is no longer true to the degree of other jobs (disregarding regional taxes, paperwork, etc). The job can exist anywhere and the value derived from it (all else being equal, like worker quality, etc) does not change.
  - bhupy 6y ago
    > In the McDonalds example, the physical restaurant is embedded in the community and partakes in the market forces of that physical location Wouldn't this be true of remote software engineer jobs too? Market forces would drive wages downward. If you live in Minnesota and demand SF-salary, your neighbor (who is similarly qualified) might accept a lower salary, and their neighbor might accept an even lower salary, etc until you find the local market equilibrium. Are you suggesting that that's unjust?
    - daenz 6y ago
      The difference is that the equilibrium reached from SF-based neighbors undercutting eachother, would be different from the equilibrium reached from Minnesota-based neighbors undercutting eachother, for the same job and qualifications.
visarga 6y ago
> is it ethical to pay a person less based purely on where they live? It's not just rent/mortgage price differences, there are also different laws regarding taxation, healthcare and retirement. On the other hand you can't offer someone in the Bay Area a Eastern Europe level salary. Nobody would come, but you can offer a slightly higher than average salary in E.E. and they would definitely come. It's just that a global company needs to hire in both regions to be competitive.
nhumrich 6y ago
Just playing devils advocate: is it ethical to pay someone SF salary despite them living in a third world country where they are essentially richer than kings and can wreak havoc on the economy/culture if they themselves aren't ethical (paying off government, etc). Salary is not a number, its a "standard of living". But paying two engineers in two different zip codes the same number, you are technically paying the person in the cheaper location more. They have a much higher "standard of living".
- rtkwe 6y ago
  My main PoV for this is it doesn't particularly matter to the business where the employee is if they're working 100% remote, they're getting the same value out of the same employee regardless of where they happen to live. Trying to judge how much a salary is worth to the person just lets businesses justify getting similar value for lower cost when they're already coming out way ahead.

by daenz 6y ago

pb7 6y ago

Definitely an interesting point. What happens when you are remote in one expensive city then move to a cheaper city? Does the employer need to know where you presently reside? I would think not.

option 6y ago

the pay is based (as it should be) on market conditions, regulations and contractual obligations. Should not be based on ethics - those can vary in surprising ways.

daenz 6y ago
I would be inclined to agree with you if your residence wasn't information you were required to give to your employer. It takes the normal market negotiations out of the equation. It's like if your rent was information you were required to give to your employer. They could then make lower offers to people with lower rent, because the market conditions are now warped in favor of the employer.

edmundsauto 6y ago

The US Government, normally a very conservative org, has cost of living increases for federal workers and (I think) military service members. Based on that, I think it's pretty well accepted (perhaps incorrectly!) that it is ethical. Or maybe practical beats ethical.

xenocyon 6y ago

> If they employer can pay $200k/yr for a remote employee It's interesting that folks envisioning a globally uniform payscale tend to posit SF salaries in Hanoi rather than Hanoi salaries in SF.

daenz 6y ago
Fair point. I was just copying the parent post's number. Likely it would be somewhere in between, as you seem to suggest.
Nimitz14 6y ago
Yeah, these guys are going to get slapped back into reality so hard if this WFH thing really takes off.
6gvONxR4sf7o 6y ago
Not really. I think we just assume that the situations where housing can't keep up with employment would shift the `income minus necessities` equation in our favor, making the massive assumption that we're willing to move somewhere cheap, or that enough other people are willing to move somewhere cheap, or just not move here in the first place. If the necessity of commuting to SF goes away, SF housing prices are less impacted, so it's more like Portland salaries in SF, and closer-to-Portland cost of living in SF.

itslikeroar 6y ago

Yeah employers should pay employees for the value of their work, which does not depend on their physical location. Also, employers always pay employees less than the value of their work and pocket the rest. This is called profit.

bhupy 6y ago

What if we took that thinking and turned it around: The minimum wage for a McDonalds cashier in NYC is $15/hour. McDonalds also operates in India, and hires cashiers that do essentially the same work. If the employe was able to pay $15/hour for the same type of work in NYC, then shouldn't they pay the Indian cashier INR 1,125 / hour? Or what about the other way around, why shouldn't the NYC cashier get paid at the Indian cost-of-living? And forget wages, how about the cost of goods and services? A 4BR house in Columbus, OH can cost about $300,000 — but the same house might cost about $3M in Palo Alto. Is this unfair / discriminatory? The house itself might be identical.

daenz 6y ago
I disagree with both of those examples because the physical location of the job/house is the important factor affecting the cost. In the McDonalds example, the physical restaurant is embedded in the community and partakes in the market forces of that physical location. In the house example, same thing, the physical house is embedded in the community and partakes market forces derived from the demand of others wanting to live in that community. The location of the job or asset affects its value. However, in remote work, this is no longer true to the degree of other jobs (disregarding regional taxes, paperwork, etc). The job can exist anywhere and the value derived from it (all else being equal, like worker quality, etc) does not change.
- bhupy 6y ago
  > In the McDonalds example, the physical restaurant is embedded in the community and partakes in the market forces of that physical location Wouldn't this be true of remote software engineer jobs too? Market forces would drive wages downward. If you live in Minnesota and demand SF-salary, your neighbor (who is similarly qualified) might accept a lower salary, and their neighbor might accept an even lower salary, etc until you find the local market equilibrium. Are you suggesting that that's unjust?
  - daenz 6y ago
    The difference is that the equilibrium reached from SF-based neighbors undercutting eachother, would be different from the equilibrium reached from Minnesota-based neighbors undercutting eachother, for the same job and qualifications.

visarga 6y ago

> is it ethical to pay a person less based purely on where they live? It's not just rent/mortgage price differences, there are also different laws regarding taxation, healthcare and retirement. On the other hand you can't offer someone in the Bay Area a Eastern Europe level salary. Nobody would come, but you can offer a slightly higher than average salary in E.E. and they would definitely come. It's just that a global company needs to hire in both regions to be competitive.

nhumrich 6y ago

Just playing devils advocate: is it ethical to pay someone SF salary despite them living in a third world country where they are essentially richer than kings and can wreak havoc on the economy/culture if they themselves aren't ethical (paying off government, etc). Salary is not a number, its a "standard of living". But paying two engineers in two different zip codes the same number, you are technically paying the person in the cheaper location more. They have a much higher "standard of living".

rtkwe 6y ago
My main PoV for this is it doesn't particularly matter to the business where the employee is if they're working 100% remote, they're getting the same value out of the same employee regardless of where they happen to live. Trying to judge how much a salary is worth to the person just lets businesses justify getting similar value for lower cost when they're already coming out way ahead.