6 ms·

People won't continue making their current SF salary by working out of Farmville, Ohio. I think this point is missed by many I fully expect Twitter, for exampl

by zaidf 6y ago

People won't continue making their current SF salary by working out of Farmville, Ohio. I think this point is missed by many I fully expect Twitter, for example, to come out with salary adjustment policies for people who want to work from home from an entirely different city and state

sigfubar 6y ago
There are plenty of people who moved out of NYC/SF and continued making their NYC/SF salary while working remotely from Nowhere, USA. Companies who cut pay based on locale will soon see their workforces dwindle to nothing.
- cpascal 6y ago
  This works if you stay with the company you were working for in NYC/SF and then transition to being remote.
geddy 6y ago
I'm always reading about job openings throughout my country (or world, for that matter) that offer 100% remote positions, and initially the huge difference in salary was pretty jarring. Then I hopped on Trulia for some less populated (not rural, but certainly not close-to-the-city-suburbs), and realized the mortgage for a house twice my size would cost the property taxes I pay now. Literally talking about a $25,000/year difference in just the mortgage. In other words, what I pay just in property taxes annually here, is how much a house costs annually that's double the size, there. Suddenly I didn't mind seeing zeroes falling off the salary.
- shuckles 6y ago
  There's a concept known as operating leverage which applies here: fixed costs, even if high, mean that increases in revenue multiply net income. And of course by moving outside a greater metro area, you're also saving money by choosing not to consume any amenities of private schools, airports, large hospitals, high infrastructure recreation, etc.
  - mcguire 6y ago
    Absolutely true. Once you move out of the center of a high-density, major metropolitan area, you literally cannot find and use private schools, airports, hospitals, and theme parks. And your IQ drops by 50 points. Instantly. It's weird.
    - shuckles 6y ago
      That's not what I said, so your sarcasm is misplaced and makes you seem unnecessarily irritated. Maybe you are misunderstanding the meaning of "greater metro area" which means "a metro area and surrounding, connected developments" and not "better than rural metro area."
      - mcguire 6y ago
        I live in northeast Alabama currently, in a rural area, well outside any metropolitan area. Now, I can't speak to private schools; I don't have kids. As far as airports go, there are two connector airports about an hour away, to the northeast and west, and a major hub two hours east. (As it turns out, even when I've lived in major metropolitan areas, I've never been closer than an hour to an airport.) There are two regional hospitals relatively close (plus trauma helicopters if you need that sort of thing). Then there are major hospitals an hour west, plus Birmingham and Nashville---both of which I've known people to go to for specialized care. I honestly don't know what you mean by "high infrastructure recreation"; if it's outdoor sporting and recreation, it's as good here as anywhere (and fishing is better than most). There is a dearth of bars and live-music venues, but then I didn't partake of those even when I had easy access. So, when you write "And of course by moving outside a greater metro area, you're also saving money by choosing not to consume any amenities of private schools, airports, large hospitals, high infrastructure recreation, etc." you seem to have a very wrong idea of life outside a "greater metro area", one that is either extremely naive or deliberately insulting. And I'm not irritated, just cranky.
        shuckles 6y ago
        No, I have the right idea just as you corroborated. There are amenities of legitimate value in a metro area. You do not care for them, so it doesn’t make sense for you to pay for easy access to them. However, saving money by reducing consumption is a lifestyle choice. Many people would rather choose to consume. That’s all I was trying to point out. There are network effects as well. I live 15 minutes from an airport with daily direct flights to the my parent’s home country. There are only a few such airports in the USA. Places with that kind of infrastructure also tend to have other valuable infrastructure. So even though I don’t benefit from the live music venue 2 blocks from my home, it’s part of the deal of being able to return home on short notice in emergency.
- viklove 6y ago
  fuck hn
  - geddy 6y ago
    Totally, it's a dangerous path to tread. Suddenly your potential worth as having you as an employee is tied to how small of a shanty you live in. "Whoa, this guy's resume says he has 20 years experience and lives in a box down by the river, wonder if we he'll take a $7,000 salary?"
  - bhupy 6y ago
    > It's literally just the lowest they can get away with paying you. Um, yes? That's exactly how this works. Google doesn't pay software engineers what they do out of the goodness of their hearts, they do it because that's how much it costs for a highly skilled engineer to come live in the Bay Area and work there. Humans aren't necessarily commodities, but labor is ABSOLUTELY a commodity. We have to start decoupling the value of a human from the value of their labor, because there's no use pretending that all labor is worth the same — while you and I might both agree that all humans are inherently equal. It's like any other good/service, labor costs as much as the buyer is willing to pay.
    - viklove 6y ago
      fuck hn
      - bhupy 6y ago
        > And employees don't work for Google out of the goodness of their hearts, what's your point? My point is that the current value of a Google employee in Mountain View is the result of the negotiated value between the buyer and the seller. A Google employee in Mountain View earns more than a Google employee in Atlanta even if they are engaging in the same labor for the same number of hours. > How exactly would you go about doing this? How is it possible to say that you don't deserve to live in a nice house, or have a nice car, or send your children to college based on the job you have and how much Google decides to pay you -- all while they capture the value you're generating so their execs and VCs can live in a nice house, have a nice car, and send their children to college? Are you really making the argument that software engineers outside the Bay Area do not live in nice houses, or drive nice cars, or send their children to college? In fact, even with the currently lower salaries of software engineers outside the Bay Area, it is easier to buy a house, buy a nicer car, etc. This can be calculated by computing the ratio between the median house price in a locale and the median salary in that same locale[1]. In San Francisco, one must earn $183k to afford the median home. In Chicago, one must earn $63k to afford the median home. > The system we live in is disgusting. The system we live in is one in which we try and minimize the cost of goods and services to consumers. The role of markets is to minimize the amount of input necessary to produce goods/services, while maximizing the output of those goods/services. In practice, this means driving down the price of goods/services to the minimum possible price, while making them as abundant as possible, and as high quality as possible. This is good for consumers, because they can purchase those goods/services cheaply. This is why bread, milk, eggs, washing machines, clothes, TVs etc have gotten cheaper over time, relative to inflation. Another good/service that consumers purchase is labor, mostly indirectly. The market is also very good at driving down the price of labor, and this is why wages don't outpace inflation, in the same way that the price of bread doesn't outpace inflation. Again, this is excellent for consumers, because the labor is an input in the production of goods/services, and the former’s cost is a part of the latter cost that consumers ultimately pay. For software engineers, this is largely fine, because there is virtually no market in which software engineers are not in the top quintile of wage earners — or at the very least, in the top 2 quintiles. High skill workers will always find higher leverage work to do, and it's easiest for them to adapt to a changing market. Low skill workers, on the other hand, struggle to do this, and we must help them out through welfare and safety nets. [1] https://www.hsh.com/finance/mortgage/salary-home-buying-25-cities.html https://www.hsh.com/finance/mortgage/salary-home-buying-25-c...
- bcrosby95 6y ago
  > Suddenly I didn't mind seeing zeroes falling off the salary. Keep in mind: that asset your company is paying for can be sold and the difference will be kept by the employee, which will let them set themselves up for a much better retirement in a lower cost of living area. It reminds me a bit of the SF Giants. They couldn't pay high salaries because they had to pay for their ballpark. But the value of that ballpark is part of the value of the club, which would be realized if the owner ever sold it. So it still was a lot like the owners pocketing the money. But not exactly.
- asdff 6y ago
  This could be dangerous, restarting your life somewhere sight unseen just because it looks great on paper. You sell and move to that house in location x for cost alone, always pining for that life you had in location y with all the intangibles you never realized you were reliant on, and never will make enough to reverse the play and relocate back to y which has experienced ever higher property values since you've been gone. A better move would be to move laterally, to a place with the same benefits that the one you are in gives you, be it leisure activities or a network for your field. That might limit you to metros, and particular metros that are most favorable to your activities (skiers might like CO, sailors might like FL). Suddenly your options become limited, and you find among these limited choices the same housing issues that have plagued states like CA as demand ramps up, because everyone had the same idea as you. No city in the U.S. actually builds sufficient supply for their influx in labor; even the ones that we applaud are doing quite poorly in terms of how much housing should be built and where. The ones that don't seem to have a housing crisis are experiencing a contracting local economy, and that doesn't bode well with your networking prospects and career options.
deleted 6y ago
[deleted]
ransom1538 6y ago
Salary based on your locale even though everyone is remote: hilarious. "Oh you live in Alabama you get 60k" "Oh you live in Manhattan on 65th street that is 150k". This will backfire into a political hell.
- three_seagrass 6y ago
  It's likely there will be a mean remote salary, to remain competitive - i.e. $110K remote and $150k on-site in SF.
- MattGaiser 6y ago
  If everyone is remote, the salary will just generally be low, period.
  - TulliusCicero 6y ago
    Right, that's one strategy, but then that means you lose out on strong engineers living in expensive areas. And since the major tech hubs are mostly very expensive, that means you're missing out on a lot of potential candidates.
- twblalock 6y ago
  What you described is already the case at most large companies, and it has not backfired, so I don't know what you are talking about.
- usefulcat 6y ago
  It certainly could, depending on how it's done, but consider the possibility that part of the motivation for allowing people to work remotely is to save on salaries, which are probably by far the biggest expense for a typical tech company.
- smnrchrds 6y ago
  Gitlab famously does this, is very open about it [0], and in general has enjoyed more praise for their all remote structure than hell for their differing salaries. Maybe the companies won't rush to cut salaries of current employees who go remote and move elsewhere. But I fully expect them to offer new hires different salaries based on their location. After all, they already do that with their non-remote offices. It's not like Google is paying the same salaries to workers in their SF office and Toronto office. [0] https://about.gitlab.com/handbook/total-rewards/compensation/compensation-calculator/calculator/ https://about.gitlab.com/handbook/total-rewards/compensation...
ianmobbs 6y ago
Gitlab's compensation calculator will show you how much less or more you can expect to make based on where you live (if employed at Gitlab, of course) https://about.gitlab.com/handbook/total-rewards/compensation/compensation-calculator/calculator/ https://about.gitlab.com/handbook/total-rewards/compensation...
panzagl 6y ago
If people leave SF and NYC rents and COLA should fall. Or alternatively they could just decrease salary across the board and those who want to stay in expensive areas are out of luck.
jlbnjmn 6y ago
On the flip side, if VCs decide their money is better spent in Provo or Austin than SV, there might be a move toward wage equilibrium. 20 years ago, tech was still a toy to the average person and lawyers were the ones in high demand. The thing about markets is that they communicate relative scarcity, which tends to bring new people into the market. It will be interesting to see what happens next.
mcguire 6y ago
"Rent is way too high in San Francisco!" "So move somewhere else, maybe?" "But I won't make as much money!" Well, there you go, then.
- oiasdjfoiasd 6y ago
  "Yes, I live in SF" - Actually lives in Ohio.
tfehring 6y ago
For reference, GitLab are fully remote and publish their rationale [0] for paying regionally-adjusted salaries. Some of the arguments I don't really buy (for example, I don't think you need to hire anyone from very high cost of living areas to build a world-class engineering org at GitLab's scale) and others (e.g., the golden handcuffs argument) I think are just a consequence of fully remote teams currently being rare. But it's still interesting to see their rationale. [0] https://about.gitlab.com/handbook/total-rewards/compensation/#paying-local-rates https://about.gitlab.com/handbook/total-rewards/compensation...
- kube-system 6y ago
  This isn't anything unique to remote companies. This has been standard practice for a very long time at companies with a presence in multiple locations, for the same reasons.
  - tfehring 6y ago
    True, but I'm not sure that's equivalent. A company that employs onsite employees in a high cost of living area is demanding that they pay higher rent as a condition of employment and should bear the associated cost. It may still make sense for the company to bear that cost even if it's solely the employee's choice to live in a high cost of living area (e.g., for the reasons GitLab mention), but it's much fuzzier for remote employees than for onsite employees.
    - kube-system 6y ago
      I don't think companies have ever done COL adjustments out of altruism. It's because of market effects. If you pay Kansas rates for an employee in NYC, you're not going to get qualified candidates. This doesn't make a difference if the employee is driving to an office or not. Both remote and and onsite employees live somewhere. When you hire someone in NYC remotely, you're also competing with employers onsite in NYC, paying NYC rates. If there's anything that results from the shift to remote, it's going to be that companies hire fewer people in high COL locations.
- 6y ago
Dirak 6y ago
From first principles, the value gained from paying top dollar for SF based engineers is their talent and their being in the environment of SF -- the tech capital of the world. If everyone is working remote, then the environment aspect of the deal disappears and all that's left is talent correlating with salary. Based on this assumption, I think it's actually more likely that the Staff level engineer at Twitter who moved to Kentucky for a lower cost of living will still be making the same range of salary and the SWE 1 in SF would make significantly less.
oldsklgdfth 6y ago
How much of a paycut is acceptable for a given drop in COL? Ex. SF to Dayton, OH: https://www.wolframalpha.com/input/?i=cost+of+living+comparison+san+francisco+dayton%2C+ohio https://www.wolframalpha.com/input/?i=cost+of+living+compari... If your bills were cut in half, what percentage pay cut would you accept?
- asdff 6y ago
  Personally, I wouldn't accept a cut. However, depending on how the employer calculates COL, I wouldn't be surprised if pay for new hires follows in lock step.
- np- 6y ago
  It doesn't scale as simply as that. Imagine you were making $100k with $60k in expenses in the Bay Area. That means your discretionary income is $40k. Then you move to Ohio and make $50k with $20k in expenses. That's $30k in discretionary income. So, even though the Bay Area is 3x more expensive, and you're only earning 2x the salary, you're still taking more money home at the end of the year by accepting the job in the Bay. In this scenario you need to look at absolute cost, not relative cost. (Obviously there are also other factors to take into account like quality of life, etc - but that's highly dependent on the individual)
  - oldsklgdfth 6y ago
    > It doesn't scale as simply as that. My question fails at the lower end. I was imagining 200-300k Bay area salaries. Is that reasonable? It seems like if you want to move to a low cost area, there is a salary that is smaller but provides you the same discretionary income.

by zaidf 6y ago

sigfubar 6y ago

There are plenty of people who moved out of NYC/SF and continued making their NYC/SF salary while working remotely from Nowhere, USA. Companies who cut pay based on locale will soon see their workforces dwindle to nothing.

cpascal 6y ago
This works if you stay with the company you were working for in NYC/SF and then transition to being remote.

geddy 6y ago

I'm always reading about job openings throughout my country (or world, for that matter) that offer 100% remote positions, and initially the huge difference in salary was pretty jarring. Then I hopped on Trulia for some less populated (not rural, but certainly not close-to-the-city-suburbs), and realized the mortgage for a house twice my size would cost the property taxes I pay now. Literally talking about a $25,000/year difference in just the mortgage. In other words, what I pay just in property taxes annually here, is how much a house costs annually that's double the size, there. Suddenly I didn't mind seeing zeroes falling off the salary.

shuckles 6y ago
There's a concept known as operating leverage which applies here: fixed costs, even if high, mean that increases in revenue multiply net income. And of course by moving outside a greater metro area, you're also saving money by choosing not to consume any amenities of private schools, airports, large hospitals, high infrastructure recreation, etc.
- mcguire 6y ago
  Absolutely true. Once you move out of the center of a high-density, major metropolitan area, you literally cannot find and use private schools, airports, hospitals, and theme parks. And your IQ drops by 50 points. Instantly. It's weird.
  - shuckles 6y ago
    That's not what I said, so your sarcasm is misplaced and makes you seem unnecessarily irritated. Maybe you are misunderstanding the meaning of "greater metro area" which means "a metro area and surrounding, connected developments" and not "better than rural metro area."
    - mcguire 6y ago
      I live in northeast Alabama currently, in a rural area, well outside any metropolitan area. Now, I can't speak to private schools; I don't have kids. As far as airports go, there are two connector airports about an hour away, to the northeast and west, and a major hub two hours east. (As it turns out, even when I've lived in major metropolitan areas, I've never been closer than an hour to an airport.) There are two regional hospitals relatively close (plus trauma helicopters if you need that sort of thing). Then there are major hospitals an hour west, plus Birmingham and Nashville---both of which I've known people to go to for specialized care. I honestly don't know what you mean by "high infrastructure recreation"; if it's outdoor sporting and recreation, it's as good here as anywhere (and fishing is better than most). There is a dearth of bars and live-music venues, but then I didn't partake of those even when I had easy access. So, when you write "And of course by moving outside a greater metro area, you're also saving money by choosing not to consume any amenities of private schools, airports, large hospitals, high infrastructure recreation, etc." you seem to have a very wrong idea of life outside a "greater metro area", one that is either extremely naive or deliberately insulting. And I'm not irritated, just cranky.
      - shuckles 6y ago
        No, I have the right idea just as you corroborated. There are amenities of legitimate value in a metro area. You do not care for them, so it doesn’t make sense for you to pay for easy access to them. However, saving money by reducing consumption is a lifestyle choice. Many people would rather choose to consume. That’s all I was trying to point out. There are network effects as well. I live 15 minutes from an airport with daily direct flights to the my parent’s home country. There are only a few such airports in the USA. Places with that kind of infrastructure also tend to have other valuable infrastructure. So even though I don’t benefit from the live music venue 2 blocks from my home, it’s part of the deal of being able to return home on short notice in emergency.
viklove 6y ago
fuck hn
- geddy 6y ago
  Totally, it's a dangerous path to tread. Suddenly your potential worth as having you as an employee is tied to how small of a shanty you live in. "Whoa, this guy's resume says he has 20 years experience and lives in a box down by the river, wonder if we he'll take a $7,000 salary?"
- bhupy 6y ago
  > It's literally just the lowest they can get away with paying you. Um, yes? That's exactly how this works. Google doesn't pay software engineers what they do out of the goodness of their hearts, they do it because that's how much it costs for a highly skilled engineer to come live in the Bay Area and work there. Humans aren't necessarily commodities, but labor is ABSOLUTELY a commodity. We have to start decoupling the value of a human from the value of their labor, because there's no use pretending that all labor is worth the same — while you and I might both agree that all humans are inherently equal. It's like any other good/service, labor costs as much as the buyer is willing to pay.
  - viklove 6y ago
    fuck hn
    - bhupy 6y ago
      > And employees don't work for Google out of the goodness of their hearts, what's your point? My point is that the current value of a Google employee in Mountain View is the result of the negotiated value between the buyer and the seller. A Google employee in Mountain View earns more than a Google employee in Atlanta even if they are engaging in the same labor for the same number of hours. > How exactly would you go about doing this? How is it possible to say that you don't deserve to live in a nice house, or have a nice car, or send your children to college based on the job you have and how much Google decides to pay you -- all while they capture the value you're generating so their execs and VCs can live in a nice house, have a nice car, and send their children to college? Are you really making the argument that software engineers outside the Bay Area do not live in nice houses, or drive nice cars, or send their children to college? In fact, even with the currently lower salaries of software engineers outside the Bay Area, it is easier to buy a house, buy a nicer car, etc. This can be calculated by computing the ratio between the median house price in a locale and the median salary in that same locale[1]. In San Francisco, one must earn $183k to afford the median home. In Chicago, one must earn $63k to afford the median home. > The system we live in is disgusting. The system we live in is one in which we try and minimize the cost of goods and services to consumers. The role of markets is to minimize the amount of input necessary to produce goods/services, while maximizing the output of those goods/services. In practice, this means driving down the price of goods/services to the minimum possible price, while making them as abundant as possible, and as high quality as possible. This is good for consumers, because they can purchase those goods/services cheaply. This is why bread, milk, eggs, washing machines, clothes, TVs etc have gotten cheaper over time, relative to inflation. Another good/service that consumers purchase is labor, mostly indirectly. The market is also very good at driving down the price of labor, and this is why wages don't outpace inflation, in the same way that the price of bread doesn't outpace inflation. Again, this is excellent for consumers, because the labor is an input in the production of goods/services, and the former’s cost is a part of the latter cost that consumers ultimately pay. For software engineers, this is largely fine, because there is virtually no market in which software engineers are not in the top quintile of wage earners — or at the very least, in the top 2 quintiles. High skill workers will always find higher leverage work to do, and it's easiest for them to adapt to a changing market. Low skill workers, on the other hand, struggle to do this, and we must help them out through welfare and safety nets. [1] https://www.hsh.com/finance/mortgage/salary-home-buying-25-cities.html https://www.hsh.com/finance/mortgage/salary-home-buying-25-c...
bcrosby95 6y ago
> Suddenly I didn't mind seeing zeroes falling off the salary. Keep in mind: that asset your company is paying for can be sold and the difference will be kept by the employee, which will let them set themselves up for a much better retirement in a lower cost of living area. It reminds me a bit of the SF Giants. They couldn't pay high salaries because they had to pay for their ballpark. But the value of that ballpark is part of the value of the club, which would be realized if the owner ever sold it. So it still was a lot like the owners pocketing the money. But not exactly.
asdff 6y ago
This could be dangerous, restarting your life somewhere sight unseen just because it looks great on paper. You sell and move to that house in location x for cost alone, always pining for that life you had in location y with all the intangibles you never realized you were reliant on, and never will make enough to reverse the play and relocate back to y which has experienced ever higher property values since you've been gone. A better move would be to move laterally, to a place with the same benefits that the one you are in gives you, be it leisure activities or a network for your field. That might limit you to metros, and particular metros that are most favorable to your activities (skiers might like CO, sailors might like FL). Suddenly your options become limited, and you find among these limited choices the same housing issues that have plagued states like CA as demand ramps up, because everyone had the same idea as you. No city in the U.S. actually builds sufficient supply for their influx in labor; even the ones that we applaud are doing quite poorly in terms of how much housing should be built and where. The ones that don't seem to have a housing crisis are experiencing a contracting local economy, and that doesn't bode well with your networking prospects and career options.

deleted 6y ago

[deleted]

ransom1538 6y ago

Salary based on your locale even though everyone is remote: hilarious. "Oh you live in Alabama you get 60k" "Oh you live in Manhattan on 65th street that is 150k". This will backfire into a political hell.

three_seagrass 6y ago
It's likely there will be a mean remote salary, to remain competitive - i.e. $110K remote and $150k on-site in SF.
MattGaiser 6y ago
If everyone is remote, the salary will just generally be low, period.
- TulliusCicero 6y ago
  Right, that's one strategy, but then that means you lose out on strong engineers living in expensive areas. And since the major tech hubs are mostly very expensive, that means you're missing out on a lot of potential candidates.
twblalock 6y ago
What you described is already the case at most large companies, and it has not backfired, so I don't know what you are talking about.
usefulcat 6y ago
It certainly could, depending on how it's done, but consider the possibility that part of the motivation for allowing people to work remotely is to save on salaries, which are probably by far the biggest expense for a typical tech company.
smnrchrds 6y ago
Gitlab famously does this, is very open about it [0], and in general has enjoyed more praise for their all remote structure than hell for their differing salaries. Maybe the companies won't rush to cut salaries of current employees who go remote and move elsewhere. But I fully expect them to offer new hires different salaries based on their location. After all, they already do that with their non-remote offices. It's not like Google is paying the same salaries to workers in their SF office and Toronto office. [0] https://about.gitlab.com/handbook/total-rewards/compensation/compensation-calculator/calculator/ https://about.gitlab.com/handbook/total-rewards/compensation...

ianmobbs 6y ago

Gitlab's compensation calculator will show you how much less or more you can expect to make based on where you live (if employed at Gitlab, of course) https://about.gitlab.com/handbook/total-rewards/compensation/compensation-calculator/calculator/ https://about.gitlab.com/handbook/total-rewards/compensation...

panzagl 6y ago

If people leave SF and NYC rents and COLA should fall. Or alternatively they could just decrease salary across the board and those who want to stay in expensive areas are out of luck.

jlbnjmn 6y ago

On the flip side, if VCs decide their money is better spent in Provo or Austin than SV, there might be a move toward wage equilibrium. 20 years ago, tech was still a toy to the average person and lawyers were the ones in high demand. The thing about markets is that they communicate relative scarcity, which tends to bring new people into the market. It will be interesting to see what happens next.

mcguire 6y ago

"Rent is way too high in San Francisco!" "So move somewhere else, maybe?" "But I won't make as much money!" Well, there you go, then.

oiasdjfoiasd 6y ago
"Yes, I live in SF" - Actually lives in Ohio.

tfehring 6y ago

For reference, GitLab are fully remote and publish their rationale [0] for paying regionally-adjusted salaries. Some of the arguments I don't really buy (for example, I don't think you need to hire anyone from very high cost of living areas to build a world-class engineering org at GitLab's scale) and others (e.g., the golden handcuffs argument) I think are just a consequence of fully remote teams currently being rare. But it's still interesting to see their rationale. [0] https://about.gitlab.com/handbook/total-rewards/compensation/#paying-local-rates https://about.gitlab.com/handbook/total-rewards/compensation...

kube-system 6y ago
This isn't anything unique to remote companies. This has been standard practice for a very long time at companies with a presence in multiple locations, for the same reasons.
- tfehring 6y ago
  True, but I'm not sure that's equivalent. A company that employs onsite employees in a high cost of living area is demanding that they pay higher rent as a condition of employment and should bear the associated cost. It may still make sense for the company to bear that cost even if it's solely the employee's choice to live in a high cost of living area (e.g., for the reasons GitLab mention), but it's much fuzzier for remote employees than for onsite employees.
  - kube-system 6y ago
    I don't think companies have ever done COL adjustments out of altruism. It's because of market effects. If you pay Kansas rates for an employee in NYC, you're not going to get qualified candidates. This doesn't make a difference if the employee is driving to an office or not. Both remote and and onsite employees live somewhere. When you hire someone in NYC remotely, you're also competing with employers onsite in NYC, paying NYC rates. If there's anything that results from the shift to remote, it's going to be that companies hire fewer people in high COL locations.
6y ago

Dirak 6y ago

From first principles, the value gained from paying top dollar for SF based engineers is their talent and their being in the environment of SF -- the tech capital of the world. If everyone is working remote, then the environment aspect of the deal disappears and all that's left is talent correlating with salary. Based on this assumption, I think it's actually more likely that the Staff level engineer at Twitter who moved to Kentucky for a lower cost of living will still be making the same range of salary and the SWE 1 in SF would make significantly less.

oldsklgdfth 6y ago

How much of a paycut is acceptable for a given drop in COL? Ex. SF to Dayton, OH: https://www.wolframalpha.com/input/?i=cost+of+living+comparison+san+francisco+dayton%2C+ohio https://www.wolframalpha.com/input/?i=cost+of+living+compari... If your bills were cut in half, what percentage pay cut would you accept?

asdff 6y ago
Personally, I wouldn't accept a cut. However, depending on how the employer calculates COL, I wouldn't be surprised if pay for new hires follows in lock step.
np- 6y ago
It doesn't scale as simply as that. Imagine you were making $100k with $60k in expenses in the Bay Area. That means your discretionary income is $40k. Then you move to Ohio and make $50k with $20k in expenses. That's $30k in discretionary income. So, even though the Bay Area is 3x more expensive, and you're only earning 2x the salary, you're still taking more money home at the end of the year by accepting the job in the Bay. In this scenario you need to look at absolute cost, not relative cost. (Obviously there are also other factors to take into account like quality of life, etc - but that's highly dependent on the individual)
- oldsklgdfth 6y ago
  > It doesn't scale as simply as that. My question fails at the lower end. I was imagining 200-300k Bay area salaries. Is that reasonable? It seems like if you want to move to a low cost area, there is a salary that is smaller but provides you the same discretionary income.