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I got a job offer from Capital One several years ago in Richmond, VA. I liked the location and the company but my current gig is paying over twice as much in Sa

I got a job offer from Capital One several years ago in Richmond, VA. I liked the location and the company but my current gig is paying over twice as much in San Jose, CA. I just don't see this panning out on a large scale once people realize that their paychecks will also drop significantly when they move away.

cjlars 6y ago
Three possibilities: 1. All the bay area companies realize they can employ the best talent remotely from around the country (globe?) successfully. The SF pay premium drops. 2. Bay Area companies pay according to cost of living, many remotely. Some people move, some stay. SF pay premium holds. 3. Everyone realizes the pre pandemic normal was right all along and having a lot of talented people in the same building matters a lot for company success. SF pay premium holds.
- propter_hoc 6y ago
  I agree, although if the premise of the article is true, #1 is the implied outcome.
  - gpapilion 6y ago
    We already know #1 isn’t true. Facebook, and Twitter both reduce salaries for remote workers. They probably still pay a local premium but that isn’t different from the Bay Area in general.
- andromeduck 6y ago
  4. Everyone realizes effects are important but also that there is pent up demand for non-sf locations, second tier hubs get more traction, SF premium slowly erodes.
- prostoalex 6y ago
  Feels like we've been through #1 with the wave of Indian outsourcing prophesied to eat up US IT industry 20 years ago. If Austin or Denver offer employees at a discount, why not Manila and Bangalore?
  - khuey 6y ago
    Staying within North America largely eliminates the timezone problem.
    - kgermino 6y ago
      It also avoids a lot of cultural/communication problems. Even when everyone speaks the same language, words have subtly different meanings in different cultures. This is true across NA as well, but SF vs Atlanta is much closer than Chicago vs India or Brazil. Not to mention that these are also big countries with their own regional language variations.
      - __float 6y ago
        This doesn't make much sense either -- many companies will happily employ people from India or Brazil if they live in SF or Chicago. Why are the "cultural/communication problems" not present then?
        toast0 6y ago
        People in the US from other countries have often assimilated at least some US culture. Or will be expected to assimilate important cultural issues more rapidly in an office in the US with mostly US cultured people than in an office elsewhere with few US cultured people. Many of the communication problems are rapidly addressed with constant realtime communication that happens in a shared office but doesn't with teams working separate hours.
        khuey 6y ago
        There's also a big difference between one or two people from other places on an American team, which will still behave like an American team, and a team of people entirely from country X, which will behave like a country X team. Exhibit A: https://www.cnn.com/2020/07/01/tech/cisco-lawsuit-caste-discrimination/index.html https://www.cnn.com/2020/07/01/tech/cisco-lawsuit-caste-disc...
- CyanLite2 6y ago
  or: Companies realize that the SF Pay Premium is so large that it's okay to overpay in some areas. Ex: Paying $250k in South Carolina may sound outrageous but it's a steal if you find a really good dev there rather than a similar dev in Atlanta for $350k if they're both going to work remote. Or $500-600k for SF/Cali.
- alistairSH 6y ago
  1 & 2 are actually the same thing, just at different points on the timeline. 2 comes first (and arguably already exists - many large employers already adjust pay by locality). If 2 is sustained long enough, there's an implied drop in demand within SF/SV (or Seattle or NYC) which leads to 1.
- tzs 6y ago
  What probably makes the most sense for a business that has N offices plus remote workers who can live pretty much anywhere they want and still do their work is to have N+1 pay scales. These would be one pay scale at each office for the workers in that office, and one pay scale for all remote workers. The pay scales for each office would take into account the cost of living in the area of that office. The pay scale for remote workers would not take into account the cost of living of any particular employee's location. This is because as far as the company is concerned, "remote" is one location. All that they need to do is pay enough so that they can fill all their remote openings. That's already how they do things within cities. Cost of living varies considerable from neighborhood to neighborhood in most big cites but do you often see companies having different pay scales on a per neighborhood basis? When I worked at a company in Santa Monica, for instance, I don't think anyone doing the same job with the same experience as me would have gotten very far saying the company needs to pay them more than me because they lived in Beverly Hills and I lived in Pasadena.
reaperducer 6y ago
I just don't see this panning out on a large scale once people realize that their paychecks will also drop significantly when they move away. If you didn't do a basic cost-of-living comparison, then it's probably good that you didn't go work for a bank.
- ptmcc 6y ago
  2x+ comp for a SWE in San Jose vs Richmond almost certainly still comes out ahead in annual net worth gain.

cjlars 6y ago

Three possibilities: 1. All the bay area companies realize they can employ the best talent remotely from around the country (globe?) successfully. The SF pay premium drops. 2. Bay Area companies pay according to cost of living, many remotely. Some people move, some stay. SF pay premium holds. 3. Everyone realizes the pre pandemic normal was right all along and having a lot of talented people in the same building matters a lot for company success. SF pay premium holds.

propter_hoc 6y ago
I agree, although if the premise of the article is true, #1 is the implied outcome.
- gpapilion 6y ago
  We already know #1 isn’t true. Facebook, and Twitter both reduce salaries for remote workers. They probably still pay a local premium but that isn’t different from the Bay Area in general.
andromeduck 6y ago
4. Everyone realizes effects are important but also that there is pent up demand for non-sf locations, second tier hubs get more traction, SF premium slowly erodes.
prostoalex 6y ago
Feels like we've been through #1 with the wave of Indian outsourcing prophesied to eat up US IT industry 20 years ago. If Austin or Denver offer employees at a discount, why not Manila and Bangalore?
- khuey 6y ago
  Staying within North America largely eliminates the timezone problem.
  - kgermino 6y ago
    It also avoids a lot of cultural/communication problems. Even when everyone speaks the same language, words have subtly different meanings in different cultures. This is true across NA as well, but SF vs Atlanta is much closer than Chicago vs India or Brazil. Not to mention that these are also big countries with their own regional language variations.
    - __float 6y ago
      This doesn't make much sense either -- many companies will happily employ people from India or Brazil if they live in SF or Chicago. Why are the "cultural/communication problems" not present then?
      - toast0 6y ago
        People in the US from other countries have often assimilated at least some US culture. Or will be expected to assimilate important cultural issues more rapidly in an office in the US with mostly US cultured people than in an office elsewhere with few US cultured people. Many of the communication problems are rapidly addressed with constant realtime communication that happens in a shared office but doesn't with teams working separate hours.
        khuey 6y ago
        There's also a big difference between one or two people from other places on an American team, which will still behave like an American team, and a team of people entirely from country X, which will behave like a country X team. Exhibit A: https://www.cnn.com/2020/07/01/tech/cisco-lawsuit-caste-discrimination/index.html https://www.cnn.com/2020/07/01/tech/cisco-lawsuit-caste-disc...
CyanLite2 6y ago
or: Companies realize that the SF Pay Premium is so large that it's okay to overpay in some areas. Ex: Paying $250k in South Carolina may sound outrageous but it's a steal if you find a really good dev there rather than a similar dev in Atlanta for $350k if they're both going to work remote. Or $500-600k for SF/Cali.
alistairSH 6y ago
1 & 2 are actually the same thing, just at different points on the timeline. 2 comes first (and arguably already exists - many large employers already adjust pay by locality). If 2 is sustained long enough, there's an implied drop in demand within SF/SV (or Seattle or NYC) which leads to 1.
tzs 6y ago
What probably makes the most sense for a business that has N offices plus remote workers who can live pretty much anywhere they want and still do their work is to have N+1 pay scales. These would be one pay scale at each office for the workers in that office, and one pay scale for all remote workers. The pay scales for each office would take into account the cost of living in the area of that office. The pay scale for remote workers would not take into account the cost of living of any particular employee's location. This is because as far as the company is concerned, "remote" is one location. All that they need to do is pay enough so that they can fill all their remote openings. That's already how they do things within cities. Cost of living varies considerable from neighborhood to neighborhood in most big cites but do you often see companies having different pay scales on a per neighborhood basis? When I worked at a company in Santa Monica, for instance, I don't think anyone doing the same job with the same experience as me would have gotten very far saying the company needs to pay them more than me because they lived in Beverly Hills and I lived in Pasadena.

reaperducer 6y ago

I just don't see this panning out on a large scale once people realize that their paychecks will also drop significantly when they move away. If you didn't do a basic cost-of-living comparison, then it's probably good that you didn't go work for a bank.

ptmcc 6y ago
2x+ comp for a SWE in San Jose vs Richmond almost certainly still comes out ahead in annual net worth gain.