4 ms·

I disagree. I think its actually correct to adjust based on location. Everyone is only looking at it from a "I am smart by living somewhere cheaper, dont doc m

I disagree. I think its actually correct to adjust based on location. Everyone is only looking at it from a "I am smart by living somewhere cheaper, dont doc my pay", but not seeing it the other way around as well. If you worked at a company based out of, say, detroit, but lived in SF, you would demand SF income, because otherwise you wouldn't be able to afford a living. This policy protects you, even if you do work at a SF place. Lets say, in theory, you move to some place cheaper, and that place starts becoming more expensive. Likewise, SF becomes cheaper over time (or, the company just moves HQ to somewhere cheap). By doing location based pay, your pay continues to go up, in line with your local area cost of living. Otherwise, if you were still getting paid based on SF cost of living, you would be loosing money every year. Eventually forcing you to move, which, you might not be able to do because of family, house, etc. Second, its ethical. "Salary" represents a quality of life, i.e. Purchasing power, not a raw number of dollars. If you were paid SF wages while you lived in a third world country, you could very well be the richest man in the country. This does not make sense. Nor is it ethical, think of the raw damage you could do to that economy. For a more common scenario, do you really feel that a mediocre software dev working for a SF company should be paid more than the local best ER doctor? Many professions simply cant be done "remote" Third, it makes all companies "equal". In a "remote first" company, the location of the HQ shouldn't matter. Maybe, not even exist. Most companies are actually "Delaware companies". Should they pay delaware salaries? And lastly, its just economics. The reason salaries are so high in SF is because no one wants to live in SF, because cost of living is so high. Its supply and demand. The cost of finding good talent in SF is astronomically high. As soon as you go "world wide", then you can attract great talent at a cheaper price. AKA, if you are going to demand a SF salary, they can certainly find someone cheaper and better (fire your ass). Frankly, _still_ getting paid a SF salary while in SF at a remote company is just incredibly generous of the company. At remote first companies, salaries will have a downward force. Over time, you will get paid less working remote.

ptkd 6y ago
I think it just sets up some pretty weird incentives for employees, especially when you consider that cost-of-living calculators are often wrong. I don't think this model will work in the future. Let's fast-forward 5 years and assume many companies have taken on this model and are now remote first. COL adjustments will have occurred, and COL is a very reasonable proxy to "desirability of living location", because as you mention these cities are based on supply and demand. When there's a high demand, COL goes up and as such so do the salaries of the folks living there. So now employees are basically at a junction where they can live wherever they want. However, their employer will cover the expenses of living somewhere better (if we take this high COL = desirable line of thinking). So employees will go to these places, effectively costing the employer money! The fundamental outcome of this change is employers are offering a giant "live somewhere expensive" stipend that can only be cashed if you choose to live somewhere expensive. It's just odd. I know for a fact if I was at one of these companies I'd move to wherever I could get the most money, because I think COL often overrates how expensive cities are.
- nhumrich 6y ago
  Whats to follow is completely anecdotal. I had a job at a decent/high salary in an expensive city. I moved and took a pay cut, to about an average salary in a much cheaper city. I feel significantly "richer" then before. I think the "more money is always better" is simply false. Its ultimately about how much money you make _after_ rent/mortgage. where rent should be equalized for equivalent housing. My $300k 5 bedroom house would be > 2mil in SF. A 2x or even 3x salary doesn't even begin to bridge the gap.

ptkd 6y ago

I think it just sets up some pretty weird incentives for employees, especially when you consider that cost-of-living calculators are often wrong. I don't think this model will work in the future. Let's fast-forward 5 years and assume many companies have taken on this model and are now remote first. COL adjustments will have occurred, and COL is a very reasonable proxy to "desirability of living location", because as you mention these cities are based on supply and demand. When there's a high demand, COL goes up and as such so do the salaries of the folks living there. So now employees are basically at a junction where they can live wherever they want. However, their employer will cover the expenses of living somewhere better (if we take this high COL = desirable line of thinking). So employees will go to these places, effectively costing the employer money! The fundamental outcome of this change is employers are offering a giant "live somewhere expensive" stipend that can only be cashed if you choose to live somewhere expensive. It's just odd. I know for a fact if I was at one of these companies I'd move to wherever I could get the most money, because I think COL often overrates how expensive cities are.

nhumrich 6y ago
Whats to follow is completely anecdotal. I had a job at a decent/high salary in an expensive city. I moved and took a pay cut, to about an average salary in a much cheaper city. I feel significantly "richer" then before. I think the "more money is always better" is simply false. Its ultimately about how much money you make _after_ rent/mortgage. where rent should be equalized for equivalent housing. My $300k 5 bedroom house would be > 2mil in SF. A 2x or even 3x salary doesn't even begin to bridge the gap.