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Please, for the love of anything meaningful, read a book about negotiation before trying to sound this stuff out. If you accept the term "location based pay,"

Please, for the love of anything meaningful, read a book about negotiation before trying to sound this stuff out. If you accept the term "location based pay," you have basically handed your wallet to the "wallet inspector," and you are being hustled. It's just like "policy," or "pay scale," they are utter bullshit if you have something of value. The media people who write articles about whether "location based pay, is it good?" are literally just 20-something bloggers with zero life experience trying to get published, and their editors and publishers have a stake in promoting the idea that your work should be cheaper. If you want to pay me based on location, I'm going to charge you based on location, because I know what kind of prima donnas people from the bay area <or insert region> can be and I charge a risk premium for having to put up with their nonsense. If that sounds offensive, why should using their perception of my housing situation as leverage be legit? If you are looking at a role, you need a clear idea of the total comp you are looking for as a part of your own plan for your life. Comp isn't a reward for good behaviour unless you are a prisoner begging guards for privileges or an animal doing tricks for treats - it's earned from value. When an HR person tells you what they want to pay you, say, "that's interesting, thank you, here is the data I have on what this role looks like from sources x, y, z, and these are the criteria I am using to evaluate the total package value." Those X, Y, and Z sources and references are things I've written about here before. Please, please, please, if you write code, read a book on negotiation.

zamalek 6y ago
> total comp you are looking for as a part of your own plan for your life. I very recently learned a damned hard lesson in this. I believed in the product, I was given interesting problems to solve, there were good benefits, there was a good culture, I had stock options. The pay was shit, the options evaporated during a merger, and I want to buy a home. Next round, I'm getting paid my worth and it's going to remote. "Believing in the product" is just a load of bullshit that C-suite spin to enrich themselves. They believe in nothing but their own bottom line, so why shouldn't you? Figure out what you are worth, what working conditions (overtime etc.) you can tolerate, and do good work for good money.
- tachyonbeam 6y ago
  The best advice I've seen is to value stock options at zero. Most startups fail. There can also be huge dilution and other risks. At the end of the day, it comes down, as you're saying, to whether you enjoy working there or not, and whether or not the base salary is enough to make it worthwhile.
  - skeeter2020 6y ago
    This is true of all variable compensation components, regardless of being stock options, profit sharing or discretionary bonuses. You need to weight it by risk, which typically means zero real value and potentially a nice surprise.
  - chris11 6y ago
    > The best advice I've seen is to value stock options at zero. I don't know. I understand that, but on the flip side I got lucky and currently my equity is worth money. In SV equity can make up a large portion of your compensation, it shouldn't be ignored. Sure, generally equity from a public company is worth more money. But equity at startups can still be valuable. A better conservative approach to startup equity would be to negotiate first for a good base salary and then negotiate for equity. VC-funded startups can pay well.
    - vinger 6y ago
      Can you extract actual money from your equity or is it locked in until some future event happens? Private stock can be internally valued highly but the hard part is extracting the value. Before going public so many events can legally occur to reduce the value of your shares. Don't count your chickens before they have hatched.
- HeyLaughingBoy 6y ago
  I will say that it's not BS to "believe in the product and have interesting problems to solve." I've been there myself. However, you have to look out for #1 and "interesting problems to solve" won't pay the mortgage, so you better make sure that despite how great the job is, you are paid at least the market rate.
throwaway-xxv 6y ago
Slightly off topic, In 2019 I did some work for a company. The project started when they were in a pinch regarding the product, and I just happened to have the expertise that they needed (very niche expertise). I quoted a figure that is usually reserved for the Thoughtworks of the world rather than individual contractors. They accepted without hesitation. The project went well, and eventually ended in a support contract. Fast-forward ~2 years and there is a new head of procurement. In a conversation he balked at approving a purchase order for a large chunk of work that they want done this year and said something about wanting to negotiate closer to the work. At the time I couldn't help think 'good luck with that'. If anything time has only strengthened my position. The only other person knowledgeable about the product at the company moved on to a new job. I'm the only person that now knows the domain (let alone the code base). To your point, it's all about knowing the position that you're in. I'm not likely to be an asshole about it cough 2021 rate cough, but they're not likely to have success negotiating a better price either.
humbleMouse 6y ago
This comment should be pinned every time this topic hits hacker news. People are out here getting scammed by these hiring managers!
- deleted 6y ago
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- ghaff 6y ago
  Just remember that negotiation has two sides. You're perfectly welcome to go into a negotiation stating that Google pays $X for the equivalent position in Mountain View. And the company you're negotiating with is perfectly able to come back and say they're not Goggle and they're not in Mountain View. Nothing says that two parties need to be able to come to an agreement.
dmitryminkovsky 6y ago
Location-based pay is remarkably offensive, and for the exact reason you state: > you have basically handed your wallet to the "wallet inspector" By accepting location-based pay, you concede that your employer has the right to treat you like a child receiving an allowance; that your remuneration is based on the lifestyle that they think is appropriate for you, and not on the market value of your work. But your choice of lifestyle, your needs, etc, are strictly none of their business and it's exceptionally inappropriate for employers to act like your parents. Once you let these people "inspect your wallet," you are establishing an abusive relationship and will get hustled around the clock.
- DanHulton 6y ago
  Absolutely, and also it opens up a whole host of other questions that are similarly intrusive: - I have a family with children. Should I get paid more than an employee who lives alone? - I have a big house that has a large mortgage. Should I get paid more than an employee who lives in a cheap apartment? - I have purchased a yacht that requires maintenance. Should I get paid more than an employee who hasn't? Sure, the last one is ridiculous, but honestly, they're _all_ ridiculous. The idea that your employer should be able to look at your expenses and judge which ones are valid and which ones aren't, and then adjust your pay "appropriately" is offensive on a deep level.
  - dmitryminkovsky 6y ago
    > The idea that your employer should be able to look at your expenses and judge which ones are valid and which ones aren't, and then adjust your pay "appropriately" is offensive on a deep level. It truly is. I may have a passion for Alizé and Cristal and to afford that passion I may want to live in a rural setting. That’s my business. Who are these people to try and tell me that whether I live in SF or Nebraska, they’re only going to let me drink André?
    - true_religion 6y ago
      The argument from the employers point of view is: we are forcing you to live in SF in order to work, thus we will pay you a premium to accept our choices. If an employer has nothing to do with your lifestyle choices, then they won't pay for them. For a truly remote position, they won't pay extra if you life in NY/SF vs Nebraska. However, I think the world hasn't adapted to that market economics yet, so in this time of transition people talk about location-based pay as a stopgap measure. Software development doesn't benefit from a centralized location, so in the future developers won't naturally live in big expensive cities and employers won't pay them wages that permit them to do so. To be honest, I think the best thing would be for SW Devs to have a guild that aids in collective bargaining. Otherwise, the power balance will gradually tilt too far towards employers. Other professional jobs (e.g. medicine, law) have similar arrangements, and that's the only reason why pay can remain high in them.
rokusei 6y ago
Do you have any recommendations on books to read to help with negotiation?
kodachi 6y ago
And please, read patio11's famous and log post about salary negotiation.
- vidarh 6y ago
  It'd be a start if people just started trying to do any negotiation. Over 25 years in tech, I've hired many dozen developers. Only maybe 3-4 of the candidates I've given offers to in that time have tried negotiating. I've never given an offer where there wouldn't be at least some room for us to negotiate. Meanwhile I always negotiate when I receive offers, and have usually ended up with substantial increases over the initial offer.
  - jeffbee 6y ago
    I know it seems like that but most people simply “negotiate” by getting multiple offers and taking the one that suits them best, or leaving one company and joining another. In that way it’s a bit like a blind auction. Whatever room to negotiate you’ve left at the top of your offer represents risk that you’ve underestimated the other partys’ offers.
    - vidarh 6y ago
      If we kept having a lot of people turn down offers, that'd likely be the case, but even if we assumed all rejected offers was down to pay, it'd mean most people are not "negotiating" that way either.
  - biztos 6y ago
    I was one of those developers who didn't know you're supposed to negotiate. I ended up being friends with a guy who got hired at the same time into the same team, for a slightly lower position, and got paid about 10% more for it. Because he had asked. That was 15 years ago, people didn't talk about this stuff as much back then, and hopefully I'm wiser now. Next time I have a salary negotiation, if ever, I'm definitely going to scour HN for advice and read some books.
sbretz3 6y ago
Any negotiation books that you suggest?
- ghaff 6y ago
  Been years since I've read it but Getting to Yes is a nice slim volume that seems still to be hugely popular.
  - chias 6y ago
    If you want to get your feet wet with a short writeup online, I found these two blog posts (part 1 and 2) to be extremely valuable. It does a fantastic job of making sure you're mentally framing the situation correctly, which makes an enormous difference. part 1: https://haseebq.com/my-ten-rules-for-negotiating-a-job-offer/ https://haseebq.com/my-ten-rules-for-negotiating-a-job-offer... part 2: https://haseebq.com/how-not-to-bomb-your-offer-negotiation/ https://haseebq.com/how-not-to-bomb-your-offer-negotiation/
  - pawelmi 6y ago
    For me 'Getting to yes' was too idealistic. It is a classic and good starter but did find it that usable for me. I was impressed though by radical approach of Chris Voss on 'Never Split the Difference'. Author is a former hostage negotiator, so there are also a lot intriguing stories included w high makes it a great read.
EveYoung 6y ago
I don't think it matters how a company or candidate justifies their offers and demands. It really comes down to their respective bargaining power. So when remote work increases the pool of potential candidates, it's no surprise that employers will try to use this to lower costs.
- RA_Fisher 6y ago
  Ah, but it also increases the pool of potential employers.
  - Aunche 6y ago
    It's not a symmetric increase. Employers that pay FANG level salaries are concentrated in a few major cities. Lots of very skilled developers scattered across the globe don't care about money that much, so they aren't tempted to move to SV for a dramatic salary bump. However, they may be tempted by a modest salary bump if they're allowed to stay with their social circle.
    - RA_Fisher 6y ago
      True, it’s the law of one price. However, privileges / capabilities aren’t evenly distributed. So, while remote does widen the labor market, wealthy countries tend to carry large shares. It’s not a zero-sum game at all. Employees from wealthy countries can gain labor surplus through technology transfer a number of ways or even find business partners and employers. Mutually beneficial exchange is the name of the game. It’s true that different folks achieve different relative success compared to their peers. That’s okay and good when it’s the product of honest just exchange.
cactus2093 6y ago
I don’t know what x, y, and z you have in mind, but it seems that companies have pretty much standardized on cost of living adjustments to pay for remote workers. So maybe you can try to cherry-pick some numbers that help your case, but the data probably works against what you’re arguing for here. It feels like the ship has sailed, as long as enough other people are willing to accept location based pay then it will be the norm. Also, I guess YMMV but I haven’t found this approach to be very effective. Lots of companies will openly admit they just can’t compete with FAANG salaries for instance. The recruiter wants to sign you for the sake of their commission, but they lose people all the time and aren’t going to lose sleep over you walking away. Even if you really are 1 in a million, the recruiter is not incentivized to avoid missing out on those people at all costs. They’re incentivized to bring in a steady stream of pretty good people, and you’re still just one person. I’m not saying there is no use in negotiating, but you’re basically hyping it up as if there is some magic incantation that will let you convince anyone to pay you whatever you want. I think that does a disservice to anyone looking for salary advice. In my experience, if you can get a 5-20% increase from their first offer that’s about all you can expect. You’re better off applying for higher paying companies from the beginning, and learning skills/playing the politics to get promoted to higher levels (e.g. senior, staff, principal engineer) where the comp you want is in band, rather than trying to turn a mediocre offer into an amazing one due to sheer force of negotiation.
- ghaff 6y ago
  >Lots of companies will openly admit they just can’t compete with FAANG salaries for instance. Yeah. Anecdotally, many tech companies don't have big location-based pay differences across the US. But they mostly do that by not having offices or at least major offices in places like SV and NYC--and basically don't really try to salary match the big tech companies. I have a feeling that if you looked at most tech employers you'd see a lot more outflow to FAANG than the other way around.
- motohagiography 6y ago
  Try to get %20 from the stock market. If your tech role typically earns ~$100k/year, that conversation is a $20,000 phone call. The difference between their first offer and 15 minutes on the phone with the right attitude and tools is what a lot of people make in a year. On an hourly 1-year contract rate haggle, upping $10/hr is $20,000 in the contract value. I'd call that a valuable phone call and probably the best return on $15.95 anyone ever spent, especially because it was probably just for some cheesy ebook on negotiation. Is that hype? I may have to write that cheesy ebook. :)
justapassenger 6y ago
> Comp isn't a reward for good behaviour unless you are a prisoner begging guards for privileges or an animal doing tricks for treats - it's earned from value. Comp is a retention mechanism that’s determined by supply and demand. Not a single reasonable company will be willing to pay you more that’s bare minimum to keep you to stay. Hiring isn’t about rewarding workers based on the value they provide, it’s about optimizing costs so you can maximize profits. While location based term is a BS term, it is very real market mechanism. In your local market there’s less non remote companies than in high cost of living areas, that are willing to compete for you, so your price point is lower.
- Tempest1981 6y ago
  Yes, an easy way to understand this is to imagine yourself living where costs are low, and pay is adequate. Now you interview for a job that requires you to relocate to London or San Francisco. You wouldn't accept the offer unless the pay was much higher. Feels like this reasoning changes for those starting in San Francisco or London, looking to relocate?
  - tharkun__ 6y ago
    Companies probably like people moving from the middle of nowhere to SF or London better though. Especially young kids will probably undervalue themselves. They may know or figure out that you gotta ask for more salary in those areas but they might not know how much exactly they need to ask for and/or go down too much when HR starts their spiel. Hopefully they've learned enough about how much the company values them and how much it cares about them, that they don't just accept a relocation and whatever salary their company gives them. I'm not too hopeful though, given what working conditions they already accept while living in SF (or wherever).
- wpietri 6y ago
  > Not a single reasonable company will be willing to pay you more that’s bare minimum to keep you to stay. That's definitely not true. Indeed, I think that's a pretty bad way to think about comp, leading to an adversarial employer/employee relationship. As examples, consider Netflix, which is widely known for paying above market, or Gravity Payments, which changed their minimum pay to $70k/year: https://en.wikipedia.org/wiki/Gravity_Payments https://en.wikipedia.org/wiki/Gravity_Payments I'm just about to post 3 new positions, and I have no interest in squeezing people on cash comp. I want people who are happy, relaxed, and feel like they're being treated well. And I also want a fair salary structure. Could I pressure bad negotiators and naive people and pay less? Absolutely. Will I? Fuck no. Maximizing shareholder value has been called "the world's dumbest idea". I wouldn't go that far, but it's certainly up there.
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mwcampbell 6y ago
This whole thread is side-stepping the point of the original article. As I understand it, the point is this: if we're going to get on a moral high horse about equal pay, then we should also apply that standard to the things we consume. So I'd think that links to ethical consumption guides would be more on point for this thread than further discussion of what _we_ are paid.
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- geoduck14 6y ago
  Oh, by the way, Starbucks has "fair-trade" coffee, which costs more because the farmers get a decent wage. And the produce I buy at the grocery store comes from Florida, Texas, and California that hire legal immigrants with an American minimum wage.
  - ironmagma 6y ago
    Not even. https://fairworldproject.org/starbucks-has-a-slave-labor-problem/ https://fairworldproject.org/starbucks-has-a-slave-labor-pro...
- jackcosgrove 6y ago
  I doubt the employer is considering what is moral when they cut your pay. It's all just rhetoric to them.
  - mwcampbell 6y ago
    Sure. And my point is that we who are relatively fortunate should focus on what we're indirectly doing to people less fortunate than us, and what we can do instead. In other words, we shouldn't keep seeing ourselves as victims.
- contravariant 6y ago
falcolas 6y ago
Negotiation only works if both parties are equal. You are not equal to Facebook, they have a hiring pipelines miles long to replace you, and have no need to negotiate anything with you. The cost to replace you is just the cost of doing business. I hate how this always comes up as if the hiring model is in any way balanced between an employer and employee. I was once asked by a New York based company, at one of their remote offices, what I wanted for a salary. I said “$180k, what you’re paying for this position in NY”. They said “No. We know what you were making before, so we’ll offer you $5k over that.” It was never a negotiation.
- droopyEyelids 6y ago
  If I understand your point, you're only considering marginal engineers that aren't expected to make a significant contribution to a product, and don't have competing offers. In the other case, the company needs to accomplish something, believes you can do it, and you have a list of companies sending you offers. Thats not so far fetched! Many of us hit that point in our careers.
  - falcolas 6y ago
    > you're only considering marginal engineers that aren't expected to make a significant contribution to a product So, 99% of the workforce? Or, 99.9999% if you consider that companies just don’t give a fuck unless you happen to be Guido van Rossem? HR departments, who approve/deny pay changes, don’t care. My current company is being forced (with the approval of the board) to compensate high performers in alternative ways (like stock grants, or vacation time) if they’re outside of the “approved pay bands”. I know someone who 100% qualifies for a title of “high performer” (they promoted him to a director a month after this) who would have had his pay cut in half if he moved away from his current location due to “remaining competitive with the local market”.
- francis-io 6y ago
  As a general rule, never disclose current or old salary. Just because you get asked, doesn't mean you need to tell anyone. I usually politely sidestep the "what's your current salary?" with a "in rolling to accept at least x, but we can negotiate if both parties are satisfied and get to offers". If a recruiter insists, I tell them I have a personal rule to never disclose that. I think I have lost a single prospect, which likely was never real to begin with. Likely just fishing. While I'm at it, I never mention who my current employer is either. I usually obscure it on my cv of I'm still employed. I also had a request recently to provide a scan of my passport on initial application, which i also declined. Honestly, recruiters think they can ask for any and all personal information they want. If you have value, no one will drop you because of it.
dheera 6y ago
Can they really have right to know where you are at every instant in time? You could be a resident of San Francisco but just rent a token shared bedroom with a bunch of people just to have an SF address, or even a UPS box, and actually be on working vacations in random houses across the country close to 100% of the time, and I'd say they shouldn't have a right to know exactly where you are through your journey, only what times you will be working. Everything else including location should be abstracted out if it's defined as a remote job.
- filereaper 6y ago
  There are tax implications to where you live and work. If you're moving around the country say one new state every month, you're required to file taxes in all the states that you've worked from and received salary. This increases the burden on both the employer and employee.
  - ghaff 6y ago
    And some states are starting to crack down on this sort of thing. Someone was telling me that their company is going to start tracking time spent in different locations based on expense reports so that they can take appropriate actions (and have the employee do so as well) if they're above thresholds.
    - dheera 6y ago
      > based on expense reports Don't expense anything from the state you are in. Have everything shipped to an address in California and forwarded. This is the snail mail version of a VPN, and I'm not sure why people are downvoting me on a hacker site. Hacking the world is what we do. This is how we stand up for our privacy. If you use VPNs at all in your online life to conceal your location there is no reason you can't invent a VPN for packages and mail as well.
      - filereaper 6y ago
        I don't think the hacking argument will stand-up when you're up again the IRS for tax evasion.
geoduck14 6y ago
Ok, help me out here. I currently work for a company that has offices all over the globe. Pre Covid, I was in the office 5 days a week. I work in Texas, with pretty low COL. The people who work in DC, NY, or SF all get paid more than I do. Should I get paid the same as them? Our company also has people in India (some are outsourced, but we have many full time associates). Should I get paid the same as them? What, then, is the value of my work? If I ask my employeer to disregard location based pay, how much do I get paid?
- cantankerous 6y ago
  The value of your labor is how much the company is able to leverage it for a return. It has next to nothing to do with where you live. It's on the company to answer this question, not you or some third party to the negotiation between you and your employer.
- maxk42 6y ago
  You determine the value you're willing to work for: not just your employer. It sounds like you've never looked for a job while still employed. Take your location out of the equation: Is another employer willing to pay more for your skills? If so, you should be interviewing. When I'm hiring an employee I'm looking for anybody that has the skills I need, not their location. I'll pay top dollar to get hard-to-find skills regardless of where that person is located. I'm not going to tell them "Well you live in India so I'm only going to pay you half of what you're looking for" because they'll reject my offer and take one from another employer. If your colleagues are making more than you and your skills are comparable then you need to begin interviewing immediately because you're undervaluing your own work.
  - Tempest1981 6y ago
    > I'll pay top dollar to get hard-to-find skills I feel like that's more true at a small-scale company than a large company with thousands of employees. Maybe the large company has already found those "hard-to-find skills".
    - 6y ago
sithadmin 6y ago
>If you want to pay me based on location, I'm going to charge you based on location Charging customers variable rates based on location is the de-facto norm amongst enterprise software vendors and most professional services segments, FWIW
- PragmaticPulp 6y ago
  Charging variable rates based on location is the standard for just about everything, outside of e-commerce where prices are clearly advertised online and mass-market consumer devices like an XBox. The mistake I see in compensation discussions is to assume that abandoning location-based pay means everyone gets paid as much as the company's most expensive location. In practice, prices for services start to trend toward the least expensive locations once location is removed from the equation. There's a reason why the price of electronics manufacturing went down when it moved to locations like China, not up when manufacturing in China became accessible to to the expensive locations.
ChuckMcM 6y ago
As I understand your point, your trying to make it from the other side, as in "I negotiated this pay level so that I can afford to pay more for my house." It isn't an unreasonable argument. The author of the piece glosses over the level of preparation/skill and automated vs non-automated manufacturing[1] in their clothing worker argument. And of course the cost of goods for a shirt that cost $10 in labor vs one that cost $1 in labor won't retail for the same amount. [1] Jobs that train "on the job" (erroneously called "low skilled") typically have a wider workforce to choose from and thus get more workers competing for jobs and thus and lower wages.
- greenrd 6y ago
  In reality, these days, software engineers train on the job to a large extent too. If your employer uses a dozen different technologies - languages, frameworks, tracing frameworks, infrastructure providers - which isn't at all unreasonable these days - then good luck to them with finding someone who has solid experience in all 12, especially if one or two are a bit off the beaten track. So I don't think "trains on the job" is a good definition for low-skilled. Low-skilled means there is less to learn, IMO.
  - ChuckMcM 6y ago
    For me, when someone designs a system from first principles it feels like software engineering, and when someone implements business logic in a preexisting framework, it feels more like software assembly. We can both agree that there is a wide range of definitions for "software engineer."
amelius 6y ago
How would this work for Facebook offices in Europe? Should employees there demand the same pay as their colleagues in the Bay area?
- ummonk 6y ago
  Note that while the other offices don’t pay the same, my understanding is that Zurich pays similarly to SF / NYC / Seattle.
  - amelius 6y ago
    Yeah, but housing is also more pricey there. It seems we are in a vicious cycle of high salaries -> higher housing costs -> even higher salaries -> even higher housing costs. To prevent the same problems elsewhere, it might seem useful to not increase salaries too much. But the real problem is that housing cost depends too much on what the buyer can pay.
motiejus 6y ago
Can you recommend a specific book?
RHSeeger 6y ago
In a world where no companies scale pay based on employee location: - It's rare that employees in expensive areas do not get to work remotely - because there would almost always be someone of similar skill in a cheaper location to hire - It's rare that a company that has in-office workers in an expensive area would hire someone working remotely - because they are certainly paying the local workers more than what would be considered normal for a remote worker... because those local people need to earn more to have the same quality of life. And if they hired the remote worker for that "normal remote rate", they would need to cut the pay of their local workers (otherwise they _are_ scaling pay based on location). _(Note that certain "this is one of only a few people in the world that meet our criteria" situations would not follow the above)_ So it seems like either - This world does not have in-office worker in expensive areas, or - All areas have the same cost of living, or - There is a hard split between companies that hire remote workers and those that do not.
lifeisstillgood 6y ago
There is a delicate balance to be handled here Firstly, yeah negotiate based on (potential) value delivered. It's the best way for any freelancer to base their pay. But for an employee things get trickier. You see a freelancer is part of the gig economy - if at the upper end but still it's a gig - you negotiate per gig and move on from the bad ones. But we hate the gig economy with a passion at the bottom end - it's exploitation - and a hundred years ago workers unionised (or sometimes less usefully revolted) in order to stop it. And asking an employee to negotiate for their own salary at odds with their co-workers is how collective action gets strangled in the crib. And let's face it, collective action in the US looks like it was strangled in the crib anyway. So looking at the next ten years we have a real issue over how to pre/re/distribute the wealth the century will hopefully bestow. And solid collective action will be a significant and important part of that. Grabbing the most value for yourself and to hell with the rest is not going to be the path to utopia. So, to start with, put unions on the boards of major companies, have them elected by the employee / members - and start seeing questions like "why can't we vote for the other folks on the board"
- greenrd 6y ago
  > Grabbing the most value for yourself and to hell with the rest is not going to be the path to utopia. That argument is not going to convince anyone who is able to twist a prospective employer's arm into paying them top dollar. Never mind utopia. I got mine!
  - lifeisstillgood 6y ago
    Yes. Which is why it's a fine approach in the free market fir someone actively choosing to be a freelancer not an employee. But employment (or rather the thing that the vast majority of people get paid via, which is normal employment right now) is protected because the vast majority of people get paid cia it. we want most people to have a reliable income stream for social reasons. Setting employee vs employee is not a good path for that.
BeetleB 6y ago
I came looking for a comment on negotiation, and frankly, it was a disappointing comment. Yes, everyone should learn about negotiation. And as the authors of Negotiation Genius point out, you're making the mistake most people make - only considering your BATNA and not considering the other party's BATNA. Ask yourself what alternative Facebook has if you insist on a Bay Area salary while living in the Midwest. The answer will be "More than they had pre-COVID." This reduces your bargaining power. Allowing remote work has significantly increased their pool of applicants. For every one of you, there are probably over 10 people as good as you who are happy taking a 20-30% salary increase while still getting paid 30% less than SV folks. While your advice is sound, you are only providing one half of the dynamic. One of the lessons in almost all negotiation books is to spend time understanding the position of the other side.
- mewpmewp2 6y ago
  Yeah as someone who has always lived in a low cost city, but getting 2-3x less salary than SF same level counterparts, should my salary also now increase to SF levels? But honestly, I should've been receiving that from the beginning then.
- throwawayboise 6y ago
  Exactly. And now expand this to the entire world. This is now the pool of applicants.
  - slumdev 6y ago
    Only sort of. If you need someone in the same time zone who speaks English at a level that enables them to contribute work of the same quality and volume as a native speaker, you've really only added Canada. If you discount the language requirement, you can add Central and South America. Only if you discount both the language requirement and the time zone requirement can you add the rest of the world.
    - BeetleB 6y ago
      I've worked in a global tech company, with development offices all over the world. It's very workable. Plenty of people all over who speak English well enough (once you get over the accents[1]). Time zone issues are a bit of a pain, but manageable. As long as you don't have to meet with them daily, you (or they) simply schedule the once-every-week-or-two-weeks meeting at a time that can work (a little earlier in the morning or later in the evening). It was quite customary to leave early or start late on some days to make up for having a 1-2 hour meeting in the evening or early morning. This is well understood. To be clear: Those developers were "first class" employees - treated similarly to the ones in the US. [1] Indeed, although their accents may have been difficult to follow, the reality is they understand a wider variety of accents than do most Americans, and so Americans complaining about their accent would be viewed as petulant.
gunnr15 6y ago
For jobs that can be done remotely, location based pay is the new “college degree required”. It is a perfect strategy to save time reviewing resume’s today, and eliminate the need to in the future.
number6 6y ago
Can you recommend a book on negotiating?
dilyevsky 6y ago
So you read a book on negotiation and it didn’t cover leverage?
Kaze404 6y ago
Sometimes I catch myself pondering if location-based pay makes any sense, and every single time I end whatever train of thought I'm having with "but they're not gonna pay me more if I decide to move to LA".
- jiveturkey 6y ago
  why do you think that in your theoretical world? higher pay actually happens in practice.
  - Kaze404 6y ago
    In all of my career I was never respected enough to get an SSD installed in my work machine after insisting that not having one hurt my productivity immensely. A pay increase after a personal decision to move to a bigger city sounds almost like parody to me.
moneywoes 6y ago
Any negotiation book suggestions
bennysonething 6y ago
Can you recommend a good book on negotiation please? You make a very good point.
minton 6y ago
Do you have any solid recommendations for a book on negotiating?
paultopia 6y ago
^^^ Yeah, this. "Location based pay" just means "I'm giving you a paycut," which in turn just means "I don't think you have any leverage." Pure and simple. So go find what the negotiation wonks call your BATNA and then see if it's better than the paycut. If it is, now we're cooking.
anticristi 6y ago
As someone who gave up 15% of his salary when moving from Germany to Sweden, let me give you a different perspective on location-based pay. 1. How much do you value commuting by bike 15 minutes, instead of taking the tube for one hour? 2. How much do you value walking 15 minutes to the nearest forest, instead of being surrounded by highways, buildings and artificial parks? 3. How much do you value having a proper lunch break, instead of taking a sandwich in front of the computer? 4. How much do you value your male CEO regularly staying home with sick kids, instead of women getting that task by default? 5. How much do you value not having to see beggars and homeless people everywhere you look? 6. How much do you value living in a 9-5 culture, instead of a "constant death march" one? 7. How much do you value pedestrians being given priority, instead of a honk? 8. How much do you value breathing in fresh air, instead of getting smog alerts every week? I could go on and on. Once you put a value on all of the above, location-based pay actually makes sense. Maybe not based on your exact zip code, but when moving from a large city to a smaller city, or from one country to another, you get certain things "for free" that you might value more than total compensation.
- locuscoeruleus 6y ago
  You gave up 15% of your salary to work in a company where, presumably, everyone earns 15% less than your previous salary. Would you accept earning swedish wages working remote from sweden in a german company?
  - xyzelement 6y ago
    I bet he would, because he's saying "this is the quality of life I want and this is the price I am willing to pay to get it." In your book "I want to live in Sweeden. I am happy to give up 15% less. But I won't do it to somehow spite my company for paying more to its German employees." He's be an idiot to think like that.
  - anticristi 6y ago
    Well, if I work as hard as a small-town Swede, with the quality of life of a small town Swede, then it makes sense to me to work at Swedish rate for a German company.
rayiner 6y ago
Location-based pay also has a disparate impact on Black and Latino people, who are statistically much more likely to have family in the south and Midwest, which have low cost of living. There’s something very troubling about two workers at a Bay Area company moving back home while working remotely, and a white or Asian worker getting paid more because family is in the Bay Area suburbs while a Black or Latino worker gets paid less because family is in the much cheaper Atlanta or Houston suburbs.
bengale 6y ago
Spot on comment. Can you recommend any good books on the subject?
- kache_ 6y ago
  https://www.kalzumeus.com/2012/01/23/salary-negotiation/ https://www.kalzumeus.com/2012/01/23/salary-negotiation/
austenallred 6y ago
Your salary is based on supply and demand. What is the supply of workers? All things being equal the company will pay the least amount possible. What is the demand for those workers? All things being equal the worker will work for the company that pays the most. When you move from San Francisco to Des Moines, Iowa you shift markets. If you move from San Francisco to “the metaverse” you shift markets. Facebook may have moved from a small handful of people able to do a job to a whole world of people. You may have moved from a small handful of opportunities to a world of opportunities. It’s difficult to predict how prices will change, but they almost definitely will, and it’s not a matter of “holding out” or “negotiating” in the long run.
kache_ 6y ago
Based. Recruiters are in the business of lowballing you as much as possible. If you produce value and there is a market for your skills, then they are bidding against other people. https://www.kalzumeus.com/2012/01/23/salary-negotiation/ https://www.kalzumeus.com/2012/01/23/salary-negotiation/
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hx2a 6y ago
Can you suggest a book on negotiation? I know I'm terrible at it and could really use such a book.
OJFord 6y ago
What about different countries? Where do you the draw the line? At some point it's just an economic reality we've lived with for centuries. I'm not really saying it's right, just that if a company is set up to be able to handle you working at great distance and cross timezone, then probably the outcome is that they can get it cheaper than you are. And it's nothing new, it's just that we call it 'outsourcing' when they're Indian, and 'remote working' or 'digital nomadism' otherwise. I'm no 'SJW', far from it; in my book the modern free market capitalist employer embraces remote work, but certainly doesn't pay SFBA rates through the nose for it. (To go with such remote friendly trends though, CoV has also brought anti-globalism trends, so who knows, really! I'm quite looking forward to reading about what's happening, in ten or twenty years' time.)
dwg465 6y ago
> If you accept the term "location based pay" When did we ever get the choice?
- jhardy54 6y ago
  When you accept an offer based on 'location based bay', I'd assume.

zamalek 6y ago

> total comp you are looking for as a part of your own plan for your life. I very recently learned a damned hard lesson in this. I believed in the product, I was given interesting problems to solve, there were good benefits, there was a good culture, I had stock options. The pay was shit, the options evaporated during a merger, and I want to buy a home. Next round, I'm getting paid my worth and it's going to remote. "Believing in the product" is just a load of bullshit that C-suite spin to enrich themselves. They believe in nothing but their own bottom line, so why shouldn't you? Figure out what you are worth, what working conditions (overtime etc.) you can tolerate, and do good work for good money.

tachyonbeam 6y ago
The best advice I've seen is to value stock options at zero. Most startups fail. There can also be huge dilution and other risks. At the end of the day, it comes down, as you're saying, to whether you enjoy working there or not, and whether or not the base salary is enough to make it worthwhile.
- skeeter2020 6y ago
  This is true of all variable compensation components, regardless of being stock options, profit sharing or discretionary bonuses. You need to weight it by risk, which typically means zero real value and potentially a nice surprise.
- chris11 6y ago
  > The best advice I've seen is to value stock options at zero. I don't know. I understand that, but on the flip side I got lucky and currently my equity is worth money. In SV equity can make up a large portion of your compensation, it shouldn't be ignored. Sure, generally equity from a public company is worth more money. But equity at startups can still be valuable. A better conservative approach to startup equity would be to negotiate first for a good base salary and then negotiate for equity. VC-funded startups can pay well.
  - vinger 6y ago
    Can you extract actual money from your equity or is it locked in until some future event happens? Private stock can be internally valued highly but the hard part is extracting the value. Before going public so many events can legally occur to reduce the value of your shares. Don't count your chickens before they have hatched.
HeyLaughingBoy 6y ago
I will say that it's not BS to "believe in the product and have interesting problems to solve." I've been there myself. However, you have to look out for #1 and "interesting problems to solve" won't pay the mortgage, so you better make sure that despite how great the job is, you are paid at least the market rate.

throwaway-xxv 6y ago

Slightly off topic, In 2019 I did some work for a company. The project started when they were in a pinch regarding the product, and I just happened to have the expertise that they needed (very niche expertise). I quoted a figure that is usually reserved for the Thoughtworks of the world rather than individual contractors. They accepted without hesitation. The project went well, and eventually ended in a support contract. Fast-forward ~2 years and there is a new head of procurement. In a conversation he balked at approving a purchase order for a large chunk of work that they want done this year and said something about wanting to negotiate closer to the work. At the time I couldn't help think 'good luck with that'. If anything time has only strengthened my position. The only other person knowledgeable about the product at the company moved on to a new job. I'm the only person that now knows the domain (let alone the code base). To your point, it's all about knowing the position that you're in. I'm not likely to be an asshole about it cough 2021 rate cough, but they're not likely to have success negotiating a better price either.

humbleMouse 6y ago

This comment should be pinned every time this topic hits hacker news. People are out here getting scammed by these hiring managers!

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ghaff 6y ago
Just remember that negotiation has two sides. You're perfectly welcome to go into a negotiation stating that Google pays $X for the equivalent position in Mountain View. And the company you're negotiating with is perfectly able to come back and say they're not Goggle and they're not in Mountain View. Nothing says that two parties need to be able to come to an agreement.

dmitryminkovsky 6y ago

Location-based pay is remarkably offensive, and for the exact reason you state: > you have basically handed your wallet to the "wallet inspector" By accepting location-based pay, you concede that your employer has the right to treat you like a child receiving an allowance; that your remuneration is based on the lifestyle that they think is appropriate for you, and not on the market value of your work. But your choice of lifestyle, your needs, etc, are strictly none of their business and it's exceptionally inappropriate for employers to act like your parents. Once you let these people "inspect your wallet," you are establishing an abusive relationship and will get hustled around the clock.

DanHulton 6y ago
Absolutely, and also it opens up a whole host of other questions that are similarly intrusive: - I have a family with children. Should I get paid more than an employee who lives alone? - I have a big house that has a large mortgage. Should I get paid more than an employee who lives in a cheap apartment? - I have purchased a yacht that requires maintenance. Should I get paid more than an employee who hasn't? Sure, the last one is ridiculous, but honestly, they're _all_ ridiculous. The idea that your employer should be able to look at your expenses and judge which ones are valid and which ones aren't, and then adjust your pay "appropriately" is offensive on a deep level.
- dmitryminkovsky 6y ago
  > The idea that your employer should be able to look at your expenses and judge which ones are valid and which ones aren't, and then adjust your pay "appropriately" is offensive on a deep level. It truly is. I may have a passion for Alizé and Cristal and to afford that passion I may want to live in a rural setting. That’s my business. Who are these people to try and tell me that whether I live in SF or Nebraska, they’re only going to let me drink André?
  - true_religion 6y ago
    The argument from the employers point of view is: we are forcing you to live in SF in order to work, thus we will pay you a premium to accept our choices. If an employer has nothing to do with your lifestyle choices, then they won't pay for them. For a truly remote position, they won't pay extra if you life in NY/SF vs Nebraska. However, I think the world hasn't adapted to that market economics yet, so in this time of transition people talk about location-based pay as a stopgap measure. Software development doesn't benefit from a centralized location, so in the future developers won't naturally live in big expensive cities and employers won't pay them wages that permit them to do so. To be honest, I think the best thing would be for SW Devs to have a guild that aids in collective bargaining. Otherwise, the power balance will gradually tilt too far towards employers. Other professional jobs (e.g. medicine, law) have similar arrangements, and that's the only reason why pay can remain high in them.

rokusei 6y ago

Do you have any recommendations on books to read to help with negotiation?

kodachi 6y ago

And please, read patio11's famous and log post about salary negotiation.

vidarh 6y ago
It'd be a start if people just started trying to do any negotiation. Over 25 years in tech, I've hired many dozen developers. Only maybe 3-4 of the candidates I've given offers to in that time have tried negotiating. I've never given an offer where there wouldn't be at least some room for us to negotiate. Meanwhile I always negotiate when I receive offers, and have usually ended up with substantial increases over the initial offer.
- jeffbee 6y ago
  I know it seems like that but most people simply “negotiate” by getting multiple offers and taking the one that suits them best, or leaving one company and joining another. In that way it’s a bit like a blind auction. Whatever room to negotiate you’ve left at the top of your offer represents risk that you’ve underestimated the other partys’ offers.
  - vidarh 6y ago
    If we kept having a lot of people turn down offers, that'd likely be the case, but even if we assumed all rejected offers was down to pay, it'd mean most people are not "negotiating" that way either.
- biztos 6y ago
  I was one of those developers who didn't know you're supposed to negotiate. I ended up being friends with a guy who got hired at the same time into the same team, for a slightly lower position, and got paid about 10% more for it. Because he had asked. That was 15 years ago, people didn't talk about this stuff as much back then, and hopefully I'm wiser now. Next time I have a salary negotiation, if ever, I'm definitely going to scour HN for advice and read some books.

sbretz3 6y ago

Any negotiation books that you suggest?

ghaff 6y ago
Been years since I've read it but Getting to Yes is a nice slim volume that seems still to be hugely popular.
- chias 6y ago
  If you want to get your feet wet with a short writeup online, I found these two blog posts (part 1 and 2) to be extremely valuable. It does a fantastic job of making sure you're mentally framing the situation correctly, which makes an enormous difference. part 1: https://haseebq.com/my-ten-rules-for-negotiating-a-job-offer/ https://haseebq.com/my-ten-rules-for-negotiating-a-job-offer... part 2: https://haseebq.com/how-not-to-bomb-your-offer-negotiation/ https://haseebq.com/how-not-to-bomb-your-offer-negotiation/
- pawelmi 6y ago
  For me 'Getting to yes' was too idealistic. It is a classic and good starter but did find it that usable for me. I was impressed though by radical approach of Chris Voss on 'Never Split the Difference'. Author is a former hostage negotiator, so there are also a lot intriguing stories included w high makes it a great read.

EveYoung 6y ago

I don't think it matters how a company or candidate justifies their offers and demands. It really comes down to their respective bargaining power. So when remote work increases the pool of potential candidates, it's no surprise that employers will try to use this to lower costs.

RA_Fisher 6y ago
Ah, but it also increases the pool of potential employers.
- Aunche 6y ago
  It's not a symmetric increase. Employers that pay FANG level salaries are concentrated in a few major cities. Lots of very skilled developers scattered across the globe don't care about money that much, so they aren't tempted to move to SV for a dramatic salary bump. However, they may be tempted by a modest salary bump if they're allowed to stay with their social circle.
  - RA_Fisher 6y ago
    True, it’s the law of one price. However, privileges / capabilities aren’t evenly distributed. So, while remote does widen the labor market, wealthy countries tend to carry large shares. It’s not a zero-sum game at all. Employees from wealthy countries can gain labor surplus through technology transfer a number of ways or even find business partners and employers. Mutually beneficial exchange is the name of the game. It’s true that different folks achieve different relative success compared to their peers. That’s okay and good when it’s the product of honest just exchange.

cactus2093 6y ago

I don’t know what x, y, and z you have in mind, but it seems that companies have pretty much standardized on cost of living adjustments to pay for remote workers. So maybe you can try to cherry-pick some numbers that help your case, but the data probably works against what you’re arguing for here. It feels like the ship has sailed, as long as enough other people are willing to accept location based pay then it will be the norm. Also, I guess YMMV but I haven’t found this approach to be very effective. Lots of companies will openly admit they just can’t compete with FAANG salaries for instance. The recruiter wants to sign you for the sake of their commission, but they lose people all the time and aren’t going to lose sleep over you walking away. Even if you really are 1 in a million, the recruiter is not incentivized to avoid missing out on those people at all costs. They’re incentivized to bring in a steady stream of pretty good people, and you’re still just one person. I’m not saying there is no use in negotiating, but you’re basically hyping it up as if there is some magic incantation that will let you convince anyone to pay you whatever you want. I think that does a disservice to anyone looking for salary advice. In my experience, if you can get a 5-20% increase from their first offer that’s about all you can expect. You’re better off applying for higher paying companies from the beginning, and learning skills/playing the politics to get promoted to higher levels (e.g. senior, staff, principal engineer) where the comp you want is in band, rather than trying to turn a mediocre offer into an amazing one due to sheer force of negotiation.

ghaff 6y ago
>Lots of companies will openly admit they just can’t compete with FAANG salaries for instance. Yeah. Anecdotally, many tech companies don't have big location-based pay differences across the US. But they mostly do that by not having offices or at least major offices in places like SV and NYC--and basically don't really try to salary match the big tech companies. I have a feeling that if you looked at most tech employers you'd see a lot more outflow to FAANG than the other way around.
motohagiography 6y ago
Try to get %20 from the stock market. If your tech role typically earns ~$100k/year, that conversation is a $20,000 phone call. The difference between their first offer and 15 minutes on the phone with the right attitude and tools is what a lot of people make in a year. On an hourly 1-year contract rate haggle, upping $10/hr is $20,000 in the contract value. I'd call that a valuable phone call and probably the best return on $15.95 anyone ever spent, especially because it was probably just for some cheesy ebook on negotiation. Is that hype? I may have to write that cheesy ebook. :)

justapassenger 6y ago

> Comp isn't a reward for good behaviour unless you are a prisoner begging guards for privileges or an animal doing tricks for treats - it's earned from value. Comp is a retention mechanism that’s determined by supply and demand. Not a single reasonable company will be willing to pay you more that’s bare minimum to keep you to stay. Hiring isn’t about rewarding workers based on the value they provide, it’s about optimizing costs so you can maximize profits. While location based term is a BS term, it is very real market mechanism. In your local market there’s less non remote companies than in high cost of living areas, that are willing to compete for you, so your price point is lower.

Tempest1981 6y ago
Yes, an easy way to understand this is to imagine yourself living where costs are low, and pay is adequate. Now you interview for a job that requires you to relocate to London or San Francisco. You wouldn't accept the offer unless the pay was much higher. Feels like this reasoning changes for those starting in San Francisco or London, looking to relocate?
- tharkun__ 6y ago
  Companies probably like people moving from the middle of nowhere to SF or London better though. Especially young kids will probably undervalue themselves. They may know or figure out that you gotta ask for more salary in those areas but they might not know how much exactly they need to ask for and/or go down too much when HR starts their spiel. Hopefully they've learned enough about how much the company values them and how much it cares about them, that they don't just accept a relocation and whatever salary their company gives them. I'm not too hopeful though, given what working conditions they already accept while living in SF (or wherever).
wpietri 6y ago
> Not a single reasonable company will be willing to pay you more that’s bare minimum to keep you to stay. That's definitely not true. Indeed, I think that's a pretty bad way to think about comp, leading to an adversarial employer/employee relationship. As examples, consider Netflix, which is widely known for paying above market, or Gravity Payments, which changed their minimum pay to $70k/year: https://en.wikipedia.org/wiki/Gravity_Payments https://en.wikipedia.org/wiki/Gravity_Payments I'm just about to post 3 new positions, and I have no interest in squeezing people on cash comp. I want people who are happy, relaxed, and feel like they're being treated well. And I also want a fair salary structure. Could I pressure bad negotiators and naive people and pay less? Absolutely. Will I? Fuck no. Maximizing shareholder value has been called "the world's dumbest idea". I wouldn't go that far, but it's certainly up there.

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mwcampbell 6y ago

This whole thread is side-stepping the point of the original article. As I understand it, the point is this: if we're going to get on a moral high horse about equal pay, then we should also apply that standard to the things we consume. So I'd think that links to ethical consumption guides would be more on point for this thread than further discussion of what _we_ are paid.

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geoduck14 6y ago
Oh, by the way, Starbucks has "fair-trade" coffee, which costs more because the farmers get a decent wage. And the produce I buy at the grocery store comes from Florida, Texas, and California that hire legal immigrants with an American minimum wage.
- ironmagma 6y ago
  Not even. https://fairworldproject.org/starbucks-has-a-slave-labor-problem/ https://fairworldproject.org/starbucks-has-a-slave-labor-pro...
jackcosgrove 6y ago
I doubt the employer is considering what is moral when they cut your pay. It's all just rhetoric to them.
- mwcampbell 6y ago
  Sure. And my point is that we who are relatively fortunate should focus on what we're indirectly doing to people less fortunate than us, and what we can do instead. In other words, we shouldn't keep seeing ourselves as victims.
contravariant 6y ago

falcolas 6y ago

Negotiation only works if both parties are equal. You are not equal to Facebook, they have a hiring pipelines miles long to replace you, and have no need to negotiate anything with you. The cost to replace you is just the cost of doing business. I hate how this always comes up as if the hiring model is in any way balanced between an employer and employee. I was once asked by a New York based company, at one of their remote offices, what I wanted for a salary. I said “$180k, what you’re paying for this position in NY”. They said “No. We know what you were making before, so we’ll offer you $5k over that.” It was never a negotiation.

droopyEyelids 6y ago
If I understand your point, you're only considering marginal engineers that aren't expected to make a significant contribution to a product, and don't have competing offers. In the other case, the company needs to accomplish something, believes you can do it, and you have a list of companies sending you offers. Thats not so far fetched! Many of us hit that point in our careers.
- falcolas 6y ago
  > you're only considering marginal engineers that aren't expected to make a significant contribution to a product So, 99% of the workforce? Or, 99.9999% if you consider that companies just don’t give a fuck unless you happen to be Guido van Rossem? HR departments, who approve/deny pay changes, don’t care. My current company is being forced (with the approval of the board) to compensate high performers in alternative ways (like stock grants, or vacation time) if they’re outside of the “approved pay bands”. I know someone who 100% qualifies for a title of “high performer” (they promoted him to a director a month after this) who would have had his pay cut in half if he moved away from his current location due to “remaining competitive with the local market”.
francis-io 6y ago
As a general rule, never disclose current or old salary. Just because you get asked, doesn't mean you need to tell anyone. I usually politely sidestep the "what's your current salary?" with a "in rolling to accept at least x, but we can negotiate if both parties are satisfied and get to offers". If a recruiter insists, I tell them I have a personal rule to never disclose that. I think I have lost a single prospect, which likely was never real to begin with. Likely just fishing. While I'm at it, I never mention who my current employer is either. I usually obscure it on my cv of I'm still employed. I also had a request recently to provide a scan of my passport on initial application, which i also declined. Honestly, recruiters think they can ask for any and all personal information they want. If you have value, no one will drop you because of it.

dheera 6y ago

Can they really have right to know where you are at every instant in time? You could be a resident of San Francisco but just rent a token shared bedroom with a bunch of people just to have an SF address, or even a UPS box, and actually be on working vacations in random houses across the country close to 100% of the time, and I'd say they shouldn't have a right to know exactly where you are through your journey, only what times you will be working. Everything else including location should be abstracted out if it's defined as a remote job.

filereaper 6y ago
There are tax implications to where you live and work. If you're moving around the country say one new state every month, you're required to file taxes in all the states that you've worked from and received salary. This increases the burden on both the employer and employee.
- ghaff 6y ago
  And some states are starting to crack down on this sort of thing. Someone was telling me that their company is going to start tracking time spent in different locations based on expense reports so that they can take appropriate actions (and have the employee do so as well) if they're above thresholds.
  - dheera 6y ago
    > based on expense reports Don't expense anything from the state you are in. Have everything shipped to an address in California and forwarded. This is the snail mail version of a VPN, and I'm not sure why people are downvoting me on a hacker site. Hacking the world is what we do. This is how we stand up for our privacy. If you use VPNs at all in your online life to conceal your location there is no reason you can't invent a VPN for packages and mail as well.
    - filereaper 6y ago
      I don't think the hacking argument will stand-up when you're up again the IRS for tax evasion.

geoduck14 6y ago

Ok, help me out here. I currently work for a company that has offices all over the globe. Pre Covid, I was in the office 5 days a week. I work in Texas, with pretty low COL. The people who work in DC, NY, or SF all get paid more than I do. Should I get paid the same as them? Our company also has people in India (some are outsourced, but we have many full time associates). Should I get paid the same as them? What, then, is the value of my work? If I ask my employeer to disregard location based pay, how much do I get paid?

cantankerous 6y ago
The value of your labor is how much the company is able to leverage it for a return. It has next to nothing to do with where you live. It's on the company to answer this question, not you or some third party to the negotiation between you and your employer.
maxk42 6y ago
You determine the value you're willing to work for: not just your employer. It sounds like you've never looked for a job while still employed. Take your location out of the equation: Is another employer willing to pay more for your skills? If so, you should be interviewing. When I'm hiring an employee I'm looking for anybody that has the skills I need, not their location. I'll pay top dollar to get hard-to-find skills regardless of where that person is located. I'm not going to tell them "Well you live in India so I'm only going to pay you half of what you're looking for" because they'll reject my offer and take one from another employer. If your colleagues are making more than you and your skills are comparable then you need to begin interviewing immediately because you're undervaluing your own work.
- Tempest1981 6y ago
  > I'll pay top dollar to get hard-to-find skills I feel like that's more true at a small-scale company than a large company with thousands of employees. Maybe the large company has already found those "hard-to-find skills".
  - 6y ago

sithadmin 6y ago

>If you want to pay me based on location, I'm going to charge you based on location Charging customers variable rates based on location is the de-facto norm amongst enterprise software vendors and most professional services segments, FWIW

PragmaticPulp 6y ago
Charging variable rates based on location is the standard for just about everything, outside of e-commerce where prices are clearly advertised online and mass-market consumer devices like an XBox. The mistake I see in compensation discussions is to assume that abandoning location-based pay means everyone gets paid as much as the company's most expensive location. In practice, prices for services start to trend toward the least expensive locations once location is removed from the equation. There's a reason why the price of electronics manufacturing went down when it moved to locations like China, not up when manufacturing in China became accessible to to the expensive locations.

ChuckMcM 6y ago

As I understand your point, your trying to make it from the other side, as in "I negotiated this pay level so that I can afford to pay more for my house." It isn't an unreasonable argument. The author of the piece glosses over the level of preparation/skill and automated vs non-automated manufacturing[1] in their clothing worker argument. And of course the cost of goods for a shirt that cost $10 in labor vs one that cost $1 in labor won't retail for the same amount. [1] Jobs that train "on the job" (erroneously called "low skilled") typically have a wider workforce to choose from and thus get more workers competing for jobs and thus and lower wages.

greenrd 6y ago
In reality, these days, software engineers train on the job to a large extent too. If your employer uses a dozen different technologies - languages, frameworks, tracing frameworks, infrastructure providers - which isn't at all unreasonable these days - then good luck to them with finding someone who has solid experience in all 12, especially if one or two are a bit off the beaten track. So I don't think "trains on the job" is a good definition for low-skilled. Low-skilled means there is less to learn, IMO.
- ChuckMcM 6y ago
  For me, when someone designs a system from first principles it feels like software engineering, and when someone implements business logic in a preexisting framework, it feels more like software assembly. We can both agree that there is a wide range of definitions for "software engineer."

amelius 6y ago

How would this work for Facebook offices in Europe? Should employees there demand the same pay as their colleagues in the Bay area?

ummonk 6y ago
Note that while the other offices don’t pay the same, my understanding is that Zurich pays similarly to SF / NYC / Seattle.
- amelius 6y ago
  Yeah, but housing is also more pricey there. It seems we are in a vicious cycle of high salaries -> higher housing costs -> even higher salaries -> even higher housing costs. To prevent the same problems elsewhere, it might seem useful to not increase salaries too much. But the real problem is that housing cost depends too much on what the buyer can pay.

motiejus 6y ago

Can you recommend a specific book?

RHSeeger 6y ago

In a world where no companies scale pay based on employee location: - It's rare that employees in expensive areas do not get to work remotely - because there would almost always be someone of similar skill in a cheaper location to hire - It's rare that a company that has in-office workers in an expensive area would hire someone working remotely - because they are certainly paying the local workers more than what would be considered normal for a remote worker... because those local people need to earn more to have the same quality of life. And if they hired the remote worker for that "normal remote rate", they would need to cut the pay of their local workers (otherwise they _are_ scaling pay based on location). _(Note that certain "this is one of only a few people in the world that meet our criteria" situations would not follow the above)_ So it seems like either - This world does not have in-office worker in expensive areas, or - All areas have the same cost of living, or - There is a hard split between companies that hire remote workers and those that do not.

lifeisstillgood 6y ago

There is a delicate balance to be handled here Firstly, yeah negotiate based on (potential) value delivered. It's the best way for any freelancer to base their pay. But for an employee things get trickier. You see a freelancer is part of the gig economy - if at the upper end but still it's a gig - you negotiate per gig and move on from the bad ones. But we hate the gig economy with a passion at the bottom end - it's exploitation - and a hundred years ago workers unionised (or sometimes less usefully revolted) in order to stop it. And asking an employee to negotiate for their own salary at odds with their co-workers is how collective action gets strangled in the crib. And let's face it, collective action in the US looks like it was strangled in the crib anyway. So looking at the next ten years we have a real issue over how to pre/re/distribute the wealth the century will hopefully bestow. And solid collective action will be a significant and important part of that. Grabbing the most value for yourself and to hell with the rest is not going to be the path to utopia. So, to start with, put unions on the boards of major companies, have them elected by the employee / members - and start seeing questions like "why can't we vote for the other folks on the board"

greenrd 6y ago
> Grabbing the most value for yourself and to hell with the rest is not going to be the path to utopia. That argument is not going to convince anyone who is able to twist a prospective employer's arm into paying them top dollar. Never mind utopia. I got mine!
- lifeisstillgood 6y ago
  Yes. Which is why it's a fine approach in the free market fir someone actively choosing to be a freelancer not an employee. But employment (or rather the thing that the vast majority of people get paid via, which is normal employment right now) is protected because the vast majority of people get paid cia it. we want most people to have a reliable income stream for social reasons. Setting employee vs employee is not a good path for that.

BeetleB 6y ago

I came looking for a comment on negotiation, and frankly, it was a disappointing comment. Yes, everyone should learn about negotiation. And as the authors of Negotiation Genius point out, you're making the mistake most people make - only considering your BATNA and not considering the other party's BATNA. Ask yourself what alternative Facebook has if you insist on a Bay Area salary while living in the Midwest. The answer will be "More than they had pre-COVID." This reduces your bargaining power. Allowing remote work has significantly increased their pool of applicants. For every one of you, there are probably over 10 people as good as you who are happy taking a 20-30% salary increase while still getting paid 30% less than SV folks. While your advice is sound, you are only providing one half of the dynamic. One of the lessons in almost all negotiation books is to spend time understanding the position of the other side.

mewpmewp2 6y ago
Yeah as someone who has always lived in a low cost city, but getting 2-3x less salary than SF same level counterparts, should my salary also now increase to SF levels? But honestly, I should've been receiving that from the beginning then.
throwawayboise 6y ago
Exactly. And now expand this to the entire world. This is now the pool of applicants.
- slumdev 6y ago
  Only sort of. If you need someone in the same time zone who speaks English at a level that enables them to contribute work of the same quality and volume as a native speaker, you've really only added Canada. If you discount the language requirement, you can add Central and South America. Only if you discount both the language requirement and the time zone requirement can you add the rest of the world.
  - BeetleB 6y ago
    I've worked in a global tech company, with development offices all over the world. It's very workable. Plenty of people all over who speak English well enough (once you get over the accents[1]). Time zone issues are a bit of a pain, but manageable. As long as you don't have to meet with them daily, you (or they) simply schedule the once-every-week-or-two-weeks meeting at a time that can work (a little earlier in the morning or later in the evening). It was quite customary to leave early or start late on some days to make up for having a 1-2 hour meeting in the evening or early morning. This is well understood. To be clear: Those developers were "first class" employees - treated similarly to the ones in the US. [1] Indeed, although their accents may have been difficult to follow, the reality is they understand a wider variety of accents than do most Americans, and so Americans complaining about their accent would be viewed as petulant.

gunnr15 6y ago

For jobs that can be done remotely, location based pay is the new “college degree required”. It is a perfect strategy to save time reviewing resume’s today, and eliminate the need to in the future.

number6 6y ago

Can you recommend a book on negotiating?

dilyevsky 6y ago

So you read a book on negotiation and it didn’t cover leverage?

Kaze404 6y ago

Sometimes I catch myself pondering if location-based pay makes any sense, and every single time I end whatever train of thought I'm having with "but they're not gonna pay me more if I decide to move to LA".

jiveturkey 6y ago
why do you think that in your theoretical world? higher pay actually happens in practice.
- Kaze404 6y ago
  In all of my career I was never respected enough to get an SSD installed in my work machine after insisting that not having one hurt my productivity immensely. A pay increase after a personal decision to move to a bigger city sounds almost like parody to me.

moneywoes 6y ago

Any negotiation book suggestions

bennysonething 6y ago

Can you recommend a good book on negotiation please? You make a very good point.

minton 6y ago

Do you have any solid recommendations for a book on negotiating?

paultopia 6y ago

^^^ Yeah, this. "Location based pay" just means "I'm giving you a paycut," which in turn just means "I don't think you have any leverage." Pure and simple. So go find what the negotiation wonks call your BATNA and then see if it's better than the paycut. If it is, now we're cooking.

anticristi 6y ago

As someone who gave up 15% of his salary when moving from Germany to Sweden, let me give you a different perspective on location-based pay. 1. How much do you value commuting by bike 15 minutes, instead of taking the tube for one hour? 2. How much do you value walking 15 minutes to the nearest forest, instead of being surrounded by highways, buildings and artificial parks? 3. How much do you value having a proper lunch break, instead of taking a sandwich in front of the computer? 4. How much do you value your male CEO regularly staying home with sick kids, instead of women getting that task by default? 5. How much do you value not having to see beggars and homeless people everywhere you look? 6. How much do you value living in a 9-5 culture, instead of a "constant death march" one? 7. How much do you value pedestrians being given priority, instead of a honk? 8. How much do you value breathing in fresh air, instead of getting smog alerts every week? I could go on and on. Once you put a value on all of the above, location-based pay actually makes sense. Maybe not based on your exact zip code, but when moving from a large city to a smaller city, or from one country to another, you get certain things "for free" that you might value more than total compensation.

locuscoeruleus 6y ago
You gave up 15% of your salary to work in a company where, presumably, everyone earns 15% less than your previous salary. Would you accept earning swedish wages working remote from sweden in a german company?
- xyzelement 6y ago
  I bet he would, because he's saying "this is the quality of life I want and this is the price I am willing to pay to get it." In your book "I want to live in Sweeden. I am happy to give up 15% less. But I won't do it to somehow spite my company for paying more to its German employees." He's be an idiot to think like that.
- anticristi 6y ago
  Well, if I work as hard as a small-town Swede, with the quality of life of a small town Swede, then it makes sense to me to work at Swedish rate for a German company.

rayiner 6y ago

Location-based pay also has a disparate impact on Black and Latino people, who are statistically much more likely to have family in the south and Midwest, which have low cost of living. There’s something very troubling about two workers at a Bay Area company moving back home while working remotely, and a white or Asian worker getting paid more because family is in the Bay Area suburbs while a Black or Latino worker gets paid less because family is in the much cheaper Atlanta or Houston suburbs.

bengale 6y ago

Spot on comment. Can you recommend any good books on the subject?

kache_ 6y ago
https://www.kalzumeus.com/2012/01/23/salary-negotiation/ https://www.kalzumeus.com/2012/01/23/salary-negotiation/

austenallred 6y ago

Your salary is based on supply and demand. What is the supply of workers? All things being equal the company will pay the least amount possible. What is the demand for those workers? All things being equal the worker will work for the company that pays the most. When you move from San Francisco to Des Moines, Iowa you shift markets. If you move from San Francisco to “the metaverse” you shift markets. Facebook may have moved from a small handful of people able to do a job to a whole world of people. You may have moved from a small handful of opportunities to a world of opportunities. It’s difficult to predict how prices will change, but they almost definitely will, and it’s not a matter of “holding out” or “negotiating” in the long run.

kache_ 6y ago

Based. Recruiters are in the business of lowballing you as much as possible. If you produce value and there is a market for your skills, then they are bidding against other people. https://www.kalzumeus.com/2012/01/23/salary-negotiation/ https://www.kalzumeus.com/2012/01/23/salary-negotiation/

deleted 6y ago

[deleted]

hx2a 6y ago

Can you suggest a book on negotiation? I know I'm terrible at it and could really use such a book.

OJFord 6y ago

What about different countries? Where do you the draw the line? At some point it's just an economic reality we've lived with for centuries. I'm not really saying it's right, just that if a company is set up to be able to handle you working at great distance and cross timezone, then probably the outcome is that they can get it cheaper than you are. And it's nothing new, it's just that we call it 'outsourcing' when they're Indian, and 'remote working' or 'digital nomadism' otherwise. I'm no 'SJW', far from it; in my book the modern free market capitalist employer embraces remote work, but certainly doesn't pay SFBA rates through the nose for it. (To go with such remote friendly trends though, CoV has also brought anti-globalism trends, so who knows, really! I'm quite looking forward to reading about what's happening, in ten or twenty years' time.)

dwg465 6y ago

> If you accept the term "location based pay" When did we ever get the choice?

jhardy54 6y ago
When you accept an offer based on 'location based bay', I'd assume.