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It's not "arbitrary and irrational" to pay market rate salaries. The real question is "what is the market?" Historically, with most people working in physical

by harryh 6y ago

It's not "arbitrary and irrational" to pay market rate salaries. The real question is "what is the market?" Historically, with most people working in physical offices, markets were very local. If you lived in Boise, ID you could mostly only get a job in Boise, ID. To the degree that remote work becomes significantly more common, I would expect those geographic barriers to break down some: salaries in the bay area and other high COL areas might drop some, while salaries in other places might rise some. I wouldn't expect complete equalization for quite some time though. Though that's just a guess. Predictions are hard. In the end though the one thing I'm sure of is that companies will do what they've always done: pay the market rate to get the labor they need. Questions of fairness are basically irrelevant.

aantix 6y ago
Strangely, I already see this breakdown. Especially for senior talent. Excluding the FAANG companies, I see offers in SF consistently for 160-190K for most startups. And I've seen similar offers here in Nebraska - Omaha, even Lincoln, for a similar level of salary. Obviously less offerings, but they are there.
dragonwriter 6y ago
They aren't paying market rate salaries in the market (remote work) from which they are purchasing. Nor are they even paying market rate salaries for local on-site work in the workers actual location, though that would cause the same problem as the actual policy. They are paying salaries based on a common base with cost-of-living based adjustments for the location of the employee’s residence. I bet if you chart BLS data for IT salaries against cost of living you'll find that this (as well as creating the same kind of incentives for deception about location as ignoring that remote work is a different market than local work does) that a system of CoL based adjustments doesn't map very well at all to local market pay.

by harryh 6y ago

aantix 6y ago

Strangely, I already see this breakdown. Especially for senior talent. Excluding the FAANG companies, I see offers in SF consistently for 160-190K for most startups. And I've seen similar offers here in Nebraska - Omaha, even Lincoln, for a similar level of salary. Obviously less offerings, but they are there.

dragonwriter 6y ago

They aren't paying market rate salaries in the market (remote work) from which they are purchasing. Nor are they even paying market rate salaries for local on-site work in the workers actual location, though that would cause the same problem as the actual policy. They are paying salaries based on a common base with cost-of-living based adjustments for the location of the employee’s residence. I bet if you chart BLS data for IT salaries against cost of living you'll find that this (as well as creating the same kind of incentives for deception about location as ignoring that remote work is a different market than local work does) that a system of CoL based adjustments doesn't map very well at all to local market pay.