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Yeah, but usually the reason products are more expensive in a higher cost of living area is due to production and distribution costs being higher. Real estate f
by Thorrez 6y ago
Yeah, but usually the reason products are more expensive in a higher cost of living area is due to production and distribution costs being higher. Real estate for stores costs more. Onsite employees cost more. With a digitally distributed product and fully remote employees, none of those factors come into play.
- hobofan 6y ago[deleted]
- vladvasiliu 6y agoI'm not sure how that works in practice. Even with the CoL adjustment, people from lower CoL area still cost less. Say a company has a choice between engineer H from a high CoL area and engineer L from a low CoL area. They are otherwise comparable in their skills, experience, etc. Why would they hire H when L is expected to be able to do the job to the same standard? How is this eliminating competition based on location? People would move to a lower CoL area, so they could get an advantage.
- hobofan 6y agoYeah, you are right, that didn't make much sense...
- Thorrez 6y ago> Even with the CoL adjustment, people from lower CoL area still cost less. How so? If the CoL adjustment is high enough, they should have equal costs. But I do see your overall point that with a CoL adjustment people in a low CoL area would in theory be able to be hired easier, because in theory they wouldn't need to be held to as high of a hiring bar.
- Thorrez 6y agoI wasn't talking salaries, I was talking about prices for selling products, same as thaumasiotes. I mentioned salaries only because payroll is a component of the production cost of a product. And when it comes to location, I was talking about the location of the buyer. You're talking about the location of the employee. With a physical product being sold by onsite employees, the location of the buyer and the employee are the same. But with a digital product the location of the buyer and the employee are not necessarily the same, so something purchased in a high CoL area could have been produced by an employee in a low CoL area, and vice versa. So it doesn't make much sense to change the price of a product based on the location of the buyer in that case. Typing this out, I realized there's an error in my previous comment, I didn't need to say "and fully remote employees". A digital product is sufficient to uncouple the employee's CoL from the buyer's CoL. The employees can all be onsite and the CoLs between the buyer and employees would still be uncoupled.
- egman_ekki 6y agoBut both Netflix and Spotify adjust subscription price based on country, presumably not depending on how difficult it is to negotiate with local copyright owners or connectivity providers, but based on local cost of living.
- Thorrez 6y agoYeah you're right. That's price discrimination[1]. I guess varying salaries by CoL for remote employees might be sort of inverted price discrimination, because it's being done by a one buyer against multiple sellers, instead of the usual one seller against multiple buyers. [1] https://en.wikipedia.org/wiki/Price_discrimination https://en.wikipedia.org/wiki/Price_discrimination
- thaumasiotes 6y ago> instead of the usual one seller against multiple buyers I'm intrigued by the progression of the subthread from "it's weird for GitLab to do this on the employee side when nobody does it on the customer side" to "it's weird for GitLab to do this on the employee side when everybody does it on the customer side".
- Thorrez 6y agoLol, yeah. I have a bad habit of arguing flawed positions then occasionally even arguing against myself. I need to stop...
- vladvasiliu 6y agoThe granularity isn't the same, either. Companies seem to apply CoL adjustments for remote jobs inside the US. Does a Netflix subscription vary by where you are in the US?