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VMware Cuts Pay for Remote Workers Fleeing Silicon Valley

45 points by x87678r 6y ago

maztaim 6y ago
As someone who lives near Pittsburgh with a reasonable salary and knows what Silicon Valley/NYC salaries are usually, I am not that upset about it.
- znpy 6y ago
  worth adding (numbeo comparison): https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+States&country2=United+States&city1=Pittsburgh%2C+PA&city2=San+Francisco%2C+CA&tracking=getDispatchComparison https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
  - unishark 6y ago
    I once negotiated with an employer that tried to use these exact kinds of cost-of-living stats to compute an adjusted "matching" offer to an offer from California. But it's a bad deal because those high california prices are "paying" for very desirable benefits like nice weather and job opportunities. These differences are not considered when "living" is treated like a commodity where the only stat to compare is cost.
    - jjeaff 6y ago
      Exactly. If I'm going to forgoe the great weather, I need some of that "excess living expenses" to make up for it with tropical vacations and maybe a nicer car or something.
znpy 6y ago
meh. If your cost of life gets more than 18% cheaper by moving somewhere else, one could seriously consider taking the hit. And that one probably should. If anything, you'll get those money back in the next job hopping session. But now you're permanently remote and can use that as leverage in your next job offer negotiations.
- Unknoob 6y ago
  But shouldn't the cost go down for the company as well? Now they no longer need to use office space to accommodate you or provide you with a space to eat/bathroom/take breaks. Rent in the valley is a nightmare and companies could save a lot by not needing a physical space for the entire workforce.
a3n 6y ago
I thought people in SV are paid what they're paid because they're uniquely qualified and productive, making their employers extremely profitable, or salable. Is that no longer true when they don't sit in a SV chair?
- Proven 6y ago
  > I thought people in SV are paid what they're paid because they're uniquely qualified and productive, making their employers extremely profitable, or salable. Yes. And on top of a salary like that they get some additional pay if they happen to live where it's unusually expensive. If the employee moves elsewhere and only nominally works at the same office, the employer of course doesn't want to pay extra (and they are right because they can find a replacement by sourcing cheaper offers from the same or similar time zone across both Americas).
- amscanne 6y ago
  It’s funny: I don’t know where people get the idea that people are paid based on the value they produce. People are paid based on the amount they command in the labor market, and labor markets are local (and if they produce less value than they command, there’s no hire). It works like nearly every other economic transaction. Engineers cost more in the valley because there is far more competition to hire them, not because they are unilaterally better or more qualified. (Not to say there isn’t a lot of great talent in the valley, but I’m sure there’s lots of talent outside the valley as well.) I’m not sure if your comment was sarcastic or not, but this is an extremely common misunderstanding. It often comes up when people discuss CEO salaries (“do they really work YYY times harder than entry level staff?”, as if people are paid based on how hard they work).
  - loki49152 6y ago
    Labor markets aren't local when everyone can work from home. That's why this kind of move is absurd. Talent outside the Valley might be willing to take lower pay, based on lower cost of living, but just like everything else the price of their labor shouldn't be based on the cost to produce it.
nashashmi 6y ago
This one is a tough problem. On one side, I am in support of Silicon Valley pay being distributed across the entire US instead of being concentrated all in one place. On the other hand, I don't like economies in small localities being disrupted because one person ends up getting a pay SO MUCH higher than majority of his neighbors for from revenue that is not sourced from the employee's home town. Maybe the market should let it play out as it does. But at the end of the day, the tech bosses are the real winners when employees' pay get cut. And that is a net negative for all.
- toomuchtodo 6y ago
  An argument for higher corporate and (progressive) personal income tax rates.
  - counterpoint1 6y ago
    This is the most depressing, dystopian desire. Taxes are necessary to fund shared infrastructure and services. They're not supposed to overtly punish success or prevent people from earning a high salary. There's an argument that high earners can (and possibly should) pay a higher share of taxes because they have the most ability to do so, but you seem to be just advocating taxing away people's earnings out of a jealous desire to not see anyone have more than you.
    - tonyedgecombe 6y ago
      I wouldn't assume jealousy as a motive for this. Plenty of high earners call for less income inequality.
    - jjeaff 6y ago
      Progressive taxes do not disincentivize success. They also don't tax high earners more. They tax the high end of high salaries more. In other words, I pay the same amount of taxes on the first $50k of earned income as a ceo pays. We both pay the same rate on the next $50k, and so on. Then, he may pay a higher rate for that last $3m he earns. Seems completely fair to me. In reality, he has a lot more resources and power to tax plan his income, so he will likely pay a lower effective tax rate than me anyway. So taxing the higher incomes, if anything, is needed to keep things fair. But regardless, assuming those higher income brackets aren't taxed at an extremely high rate, no one is declining higher salaries or choosing to earn less because it will be taxed more.
AtlasBarfed 6y ago
So they are cutting payroll costs in a down economy. VMWare is just using this excuse because they think their workers will tolerate it. HR is a cold calculation, and people forget HR's primary (and second and third) priority is to serve the company.
- unishark 6y ago
  You are suggesting HR is amoral but in fact they are actually evil.
lazylizard 6y ago
if the work can be done from anywhere in the country, how about doing it from anywhere in the world?

45 points by x87678r 6y ago

As someone who lives near Pittsburgh with a reasonable salary and knows what Silicon Valley/NYC salaries are usually, I am not that upset about it.

znpy 6y ago
worth adding (numbeo comparison): https://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+States&country2=United+States&city1=Pittsburgh%2C+PA&city2=San+Francisco%2C+CA&tracking=getDispatchComparison https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
- unishark 6y ago
  I once negotiated with an employer that tried to use these exact kinds of cost-of-living stats to compute an adjusted "matching" offer to an offer from California. But it's a bad deal because those high california prices are "paying" for very desirable benefits like nice weather and job opportunities. These differences are not considered when "living" is treated like a commodity where the only stat to compare is cost.
  - jjeaff 6y ago
    Exactly. If I'm going to forgoe the great weather, I need some of that "excess living expenses" to make up for it with tropical vacations and maybe a nicer car or something.

znpy 6y ago

meh. If your cost of life gets more than 18% cheaper by moving somewhere else, one could seriously consider taking the hit. And that one probably should. If anything, you'll get those money back in the next job hopping session. But now you're permanently remote and can use that as leverage in your next job offer negotiations.

Unknoob 6y ago
But shouldn't the cost go down for the company as well? Now they no longer need to use office space to accommodate you or provide you with a space to eat/bathroom/take breaks. Rent in the valley is a nightmare and companies could save a lot by not needing a physical space for the entire workforce.

a3n 6y ago

I thought people in SV are paid what they're paid because they're uniquely qualified and productive, making their employers extremely profitable, or salable. Is that no longer true when they don't sit in a SV chair?

Proven 6y ago
> I thought people in SV are paid what they're paid because they're uniquely qualified and productive, making their employers extremely profitable, or salable. Yes. And on top of a salary like that they get some additional pay if they happen to live where it's unusually expensive. If the employee moves elsewhere and only nominally works at the same office, the employer of course doesn't want to pay extra (and they are right because they can find a replacement by sourcing cheaper offers from the same or similar time zone across both Americas).
amscanne 6y ago
It’s funny: I don’t know where people get the idea that people are paid based on the value they produce. People are paid based on the amount they command in the labor market, and labor markets are local (and if they produce less value than they command, there’s no hire). It works like nearly every other economic transaction. Engineers cost more in the valley because there is far more competition to hire them, not because they are unilaterally better or more qualified. (Not to say there isn’t a lot of great talent in the valley, but I’m sure there’s lots of talent outside the valley as well.) I’m not sure if your comment was sarcastic or not, but this is an extremely common misunderstanding. It often comes up when people discuss CEO salaries (“do they really work YYY times harder than entry level staff?”, as if people are paid based on how hard they work).
- loki49152 6y ago
  Labor markets aren't local when everyone can work from home. That's why this kind of move is absurd. Talent outside the Valley might be willing to take lower pay, based on lower cost of living, but just like everything else the price of their labor shouldn't be based on the cost to produce it.

nashashmi 6y ago

This one is a tough problem. On one side, I am in support of Silicon Valley pay being distributed across the entire US instead of being concentrated all in one place. On the other hand, I don't like economies in small localities being disrupted because one person ends up getting a pay SO MUCH higher than majority of his neighbors for from revenue that is not sourced from the employee's home town. Maybe the market should let it play out as it does. But at the end of the day, the tech bosses are the real winners when employees' pay get cut. And that is a net negative for all.

toomuchtodo 6y ago
An argument for higher corporate and (progressive) personal income tax rates.
- counterpoint1 6y ago
  This is the most depressing, dystopian desire. Taxes are necessary to fund shared infrastructure and services. They're not supposed to overtly punish success or prevent people from earning a high salary. There's an argument that high earners can (and possibly should) pay a higher share of taxes because they have the most ability to do so, but you seem to be just advocating taxing away people's earnings out of a jealous desire to not see anyone have more than you.
  - tonyedgecombe 6y ago
    I wouldn't assume jealousy as a motive for this. Plenty of high earners call for less income inequality.
  - jjeaff 6y ago
    Progressive taxes do not disincentivize success. They also don't tax high earners more. They tax the high end of high salaries more. In other words, I pay the same amount of taxes on the first $50k of earned income as a ceo pays. We both pay the same rate on the next $50k, and so on. Then, he may pay a higher rate for that last $3m he earns. Seems completely fair to me. In reality, he has a lot more resources and power to tax plan his income, so he will likely pay a lower effective tax rate than me anyway. So taxing the higher incomes, if anything, is needed to keep things fair. But regardless, assuming those higher income brackets aren't taxed at an extremely high rate, no one is declining higher salaries or choosing to earn less because it will be taxed more.

AtlasBarfed 6y ago

So they are cutting payroll costs in a down economy. VMWare is just using this excuse because they think their workers will tolerate it. HR is a cold calculation, and people forget HR's primary (and second and third) priority is to serve the company.

unishark 6y ago
You are suggesting HR is amoral but in fact they are actually evil.

lazylizard 6y ago

if the work can be done from anywhere in the country, how about doing it from anywhere in the world?