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No, equal pay for equal work, especially in remote jobs isn't going to work. Why is it that for almost the entire history of man, we've had wages decided based

No, equal pay for equal work, especially in remote jobs isn't going to work. Why is it that for almost the entire history of man, we've had wages decided based on COL, and suddenly when it comes to tech bros who are seeing a pay cut, we are all up in the arms? A Starbucks barista in SF gets paid one and half times that in Oklahoma. They do equal work, just different locations. A lady in the Zara sweatshops in Bangladesh gets paid a dollar for the entire day, while a lady in a luxury boutique in LA probably earns 100x that. They do the same jobs, why don't we all globally decide the pay in a single currency? Simple answer: economics. Adjusting for COL was always a thing, moving away from a high COL area always meant a pay cut. Similarly anyone who moved from India or China or Europe to the Bay, got a pay hike. And the reason this happens is supply and demand. Some people are valuable enough to companies that regardless of where they live they get the same money. Bezos or Musk can move to Madagascar for all they care. For 99.999999999% of the rest, we are replaceable. If you're gonna move to Indiana and demand Bay Area salaries, there'll be plenty of people there who can do your job for less with the same set of skills. And if not in Indiana, somewhere else, maybe India. Economics. Simple. Otherwise, we'd all be drinking $200 coffees and $500 avocado toasts.

MetalGuru 6y ago
Pay isn’t directly based on COL. It’s based on supply and demand. If there were thousands of baristas available to fill jobs at SF Starbucks, the pay would be lower. The reason pay is higher in SV is because all the same firms were competing against each other for the limited supply of talent. One could argue the supply is impacted by COL, but it’s still only an indirect cause of pay determination.
- kmonsen 6y ago
  At least in google pay was more based on col than supply and demand. The reason was if not everyone would move to Mountain View and that was not good for the company. So in general offices in low col like India or Taiwan paid better than expected to try to have people stay. There were exceptions like London for some reason.
- lotsofpulp 6y ago
  I don't understand where people get the idea that prices are based on anything but supply and demand.
  - darth_avocado 6y ago
    Because COL drives supply and demand. If you're only willing to pay $5/hr in SF, you'd have less supply because people won't be willing to work for that price.
  - inglor_cz 6y ago
    An interesting exception from intuitive understanding of supply and demand: https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good
    - kec 6y ago
      I'm not an economist but it has always seemed to me that Veblen goods are actually selling status and prestige. Flooding the market with product devalues the associated status which is what causes the price to drop.
    - deleted 6y ago
      [deleted]
  - FooHentai 6y ago
    Consider the offshoring of manufacturing to undeveloped/developing nations. It reduced manufacturing costs, increased profits to businesses, and/or lowered the price to consumers giving the products a competitive advantage over those made in developed nations. The ability to outsource to places where cost of living and wages were low allowed this to occur. I don't see that the office-based/remote-based working situation is much different to this. The main uncertainty whether remote working is actually as effective, at scale, as when it occurs in an office environment. Since knowledge work output is far less tangible than manufacturing output, I'm skeptical. The main incentive for employers to shift to remote workers, outside of the current pandemic situation, is the same reason they shifted to open-plan offices - Cost saving. Here, that's realized via lower wages.
superfrank 6y ago
> suddenly when it comes to tech bros who are seeing a pay cut, we are all up in the arms? I think you cut right to the heart of the issue here. As a software engineer, for years I've heard "If you want to make the big bucks, you have to move to the bay area" or some variation of that. No one on here seemed to have a problem with location based comp when it worked in their favor. Now that it's not people are up in arms. Let's be honest and call it like it is. A lot of people in major tech hubs see an opportunity to game the system and are just hurt that companies aren't going to let them.
- arrosenberg 6y ago
  > A lot of people in major tech hubs see an opportunity to game the system and are just hurt that companies aren't going to let them. That seems like a negative way of framing it. They are exercising their rights as laborers. Whether or not they are successful is TBD, but they aren't "hurting" companies, they're negotiating. That larger groups are forming to collectively push the notion implies a greater chance of success.
  - superfrank 6y ago
    I don't really have a positive or negative take on the situation. It's the workers' rights to try and fight for a higher salary and it's the companies' rights to either pay them or tell them no. The majority of the workers affected by this are making well above the poverty line, so I'm happy to let the free market handle this. What I do have a very negative view on is articles like this that try and frame it as some big moral argument and hide behind things like discrimination to get people on their side. Like I said, I feel like most people complaining about this saw an opportunity to increase their take home pay by a lot and are now just angry that their plans have been foiled. If the author want to live in India, but thinks he can provide more value (and thus should be paid more) than everyone in his local market, then let him make his case. If that isn't the case and he doesn't provide any more value that the other people in his local market, then why should the company continue to pay him an above market salary when theres a ton of other potential applicants out there? Basically, I find him pretending that this isn't about money very disingenuous.
ubercow13 6y ago
>there'll be plenty of people there who can do your job for less with the same set of skills Why weren't they already hired instead of the SF person, then?
- darth_avocado 6y ago
  Because there's benefits to hiring people who would work in person.
- justincredible 6y ago
  They weren't arrogant enough.
- geodel 6y ago
  Really? Is every person on earth with certain capability doing or getting opportunity to do exactly that work.
  - ubercow13 6y ago
    I don’t understand your point? The GP was implying that as soon as a SF engineer moves somewhere else, there are other engineers locally who could equally do their job.
jstummbillig 6y ago
> Simple answer: economics. Yes, that's a very simple answer – unfortunately, not entirely conclusive. A MacBook costs the same across the entire US. A Netflix subscription costs the same across the entire US. Maybe equal pay is just the right kind of unreasonable: The one that will get increasingly more reasonable the more it is being done, providing a push towards a more egalitarian society, first interregional and then international.
- geodel 6y ago
  Netflix cost lot lower in India. Macbooks quite a bit higher. In one case reason is much lower purchasing power in other case much higher tax rate as Macbooks may come under luxury goods. Even if I limit to US none of these 2 are like recurring major expense like food, housing, and myriad local services which have location sensitive pricing.
oh_sigh 6y ago
All of your examples are geography dependent and is not actually equal work - the Oklahoma barista can't do the same job as the SF barista, because telecommuting baristas is not a thing. But if the job role is to maintain a server fleet, and you can realistically do the job from anywhere, then you should get paid the same amount whether you happen to be in SF or Oklahoma, since you can complete the job in the same manner. Equal pay for equal work makes sense - what doesn't make sense is to assume that the pay will normalize into bay-area level pay, versus bay-area level pay being lowered because companies realize they can pay everyone 70% as much and have the employees live in lower cost of living areas.
- darth_avocado 6y ago
  How is a Barista's work different in SF vs Oklahoma? Making coffee is the same process (and I'm talking about regular baristas). It is unequal pay for the same work, in different locations.
- rapht 6y ago
  ^ This exactly. The market will actually tend to equal pay for equal work: this has already happened in numerous industries in the form of layoffs of people in one expensive location to be replaced by people doing the same work in less expensive locations, until people doing the actual same work, including notably dealing with the same kind of constraints, roughly have the same pay whenever/wherever possible. There are of course a lot of variables in what makes company consider that 2 people do "the same job": sometimes, a company will value a certain proximity of a team, which you could interpret as considering someone further away from where the team is based cannot actually do "the same job". Either way, there is no reason why geographically-independent jobs should not end up aligning to some global, geographically-independent wage... and as always, this will not benefit those who are highest-paid doing said job...

MetalGuru 6y ago

Pay isn’t directly based on COL. It’s based on supply and demand. If there were thousands of baristas available to fill jobs at SF Starbucks, the pay would be lower. The reason pay is higher in SV is because all the same firms were competing against each other for the limited supply of talent. One could argue the supply is impacted by COL, but it’s still only an indirect cause of pay determination.

kmonsen 6y ago
At least in google pay was more based on col than supply and demand. The reason was if not everyone would move to Mountain View and that was not good for the company. So in general offices in low col like India or Taiwan paid better than expected to try to have people stay. There were exceptions like London for some reason.
lotsofpulp 6y ago
I don't understand where people get the idea that prices are based on anything but supply and demand.
- darth_avocado 6y ago
  Because COL drives supply and demand. If you're only willing to pay $5/hr in SF, you'd have less supply because people won't be willing to work for that price.
- inglor_cz 6y ago
  An interesting exception from intuitive understanding of supply and demand: https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good
  - kec 6y ago
    I'm not an economist but it has always seemed to me that Veblen goods are actually selling status and prestige. Flooding the market with product devalues the associated status which is what causes the price to drop.
  - deleted 6y ago
    [deleted]
- FooHentai 6y ago
  Consider the offshoring of manufacturing to undeveloped/developing nations. It reduced manufacturing costs, increased profits to businesses, and/or lowered the price to consumers giving the products a competitive advantage over those made in developed nations. The ability to outsource to places where cost of living and wages were low allowed this to occur. I don't see that the office-based/remote-based working situation is much different to this. The main uncertainty whether remote working is actually as effective, at scale, as when it occurs in an office environment. Since knowledge work output is far less tangible than manufacturing output, I'm skeptical. The main incentive for employers to shift to remote workers, outside of the current pandemic situation, is the same reason they shifted to open-plan offices - Cost saving. Here, that's realized via lower wages.

superfrank 6y ago

> suddenly when it comes to tech bros who are seeing a pay cut, we are all up in the arms? I think you cut right to the heart of the issue here. As a software engineer, for years I've heard "If you want to make the big bucks, you have to move to the bay area" or some variation of that. No one on here seemed to have a problem with location based comp when it worked in their favor. Now that it's not people are up in arms. Let's be honest and call it like it is. A lot of people in major tech hubs see an opportunity to game the system and are just hurt that companies aren't going to let them.

arrosenberg 6y ago
> A lot of people in major tech hubs see an opportunity to game the system and are just hurt that companies aren't going to let them. That seems like a negative way of framing it. They are exercising their rights as laborers. Whether or not they are successful is TBD, but they aren't "hurting" companies, they're negotiating. That larger groups are forming to collectively push the notion implies a greater chance of success.
- superfrank 6y ago
  I don't really have a positive or negative take on the situation. It's the workers' rights to try and fight for a higher salary and it's the companies' rights to either pay them or tell them no. The majority of the workers affected by this are making well above the poverty line, so I'm happy to let the free market handle this. What I do have a very negative view on is articles like this that try and frame it as some big moral argument and hide behind things like discrimination to get people on their side. Like I said, I feel like most people complaining about this saw an opportunity to increase their take home pay by a lot and are now just angry that their plans have been foiled. If the author want to live in India, but thinks he can provide more value (and thus should be paid more) than everyone in his local market, then let him make his case. If that isn't the case and he doesn't provide any more value that the other people in his local market, then why should the company continue to pay him an above market salary when theres a ton of other potential applicants out there? Basically, I find him pretending that this isn't about money very disingenuous.

ubercow13 6y ago

>there'll be plenty of people there who can do your job for less with the same set of skills Why weren't they already hired instead of the SF person, then?

darth_avocado 6y ago
Because there's benefits to hiring people who would work in person.
justincredible 6y ago
They weren't arrogant enough.
geodel 6y ago
Really? Is every person on earth with certain capability doing or getting opportunity to do exactly that work.
- ubercow13 6y ago
  I don’t understand your point? The GP was implying that as soon as a SF engineer moves somewhere else, there are other engineers locally who could equally do their job.

jstummbillig 6y ago

> Simple answer: economics. Yes, that's a very simple answer – unfortunately, not entirely conclusive. A MacBook costs the same across the entire US. A Netflix subscription costs the same across the entire US. Maybe equal pay is just the right kind of unreasonable: The one that will get increasingly more reasonable the more it is being done, providing a push towards a more egalitarian society, first interregional and then international.

geodel 6y ago
Netflix cost lot lower in India. Macbooks quite a bit higher. In one case reason is much lower purchasing power in other case much higher tax rate as Macbooks may come under luxury goods. Even if I limit to US none of these 2 are like recurring major expense like food, housing, and myriad local services which have location sensitive pricing.

oh_sigh 6y ago

All of your examples are geography dependent and is not actually equal work - the Oklahoma barista can't do the same job as the SF barista, because telecommuting baristas is not a thing. But if the job role is to maintain a server fleet, and you can realistically do the job from anywhere, then you should get paid the same amount whether you happen to be in SF or Oklahoma, since you can complete the job in the same manner. Equal pay for equal work makes sense - what doesn't make sense is to assume that the pay will normalize into bay-area level pay, versus bay-area level pay being lowered because companies realize they can pay everyone 70% as much and have the employees live in lower cost of living areas.

darth_avocado 6y ago
How is a Barista's work different in SF vs Oklahoma? Making coffee is the same process (and I'm talking about regular baristas). It is unequal pay for the same work, in different locations.
rapht 6y ago
^ This exactly. The market will actually tend to equal pay for equal work: this has already happened in numerous industries in the form of layoffs of people in one expensive location to be replaced by people doing the same work in less expensive locations, until people doing the actual same work, including notably dealing with the same kind of constraints, roughly have the same pay whenever/wherever possible. There are of course a lot of variables in what makes company consider that 2 people do "the same job": sometimes, a company will value a certain proximity of a team, which you could interpret as considering someone further away from where the team is based cannot actually do "the same job". Either way, there is no reason why geographically-independent jobs should not end up aligning to some global, geographically-independent wage... and as always, this will not benefit those who are highest-paid doing said job...