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Pointing out the difference in our thinking is great. I appreciate that. There are a couple problems. The inequity of wages in Asia to those in "the West" ar
by erikerikson 6y ago
Pointing out the difference in our thinking is great. I appreciate that.
There are a couple problems.
The inequity of wages in Asia to those in "the West" are a temporary artifact that is slowly receding. Wages have been rising as has cost of living.
Location based pay says, I see you reduced your costs and I want to capture your increased profits. Increased efficiency is a normal mechanism for businesses to increase profits but you're an individual and you don't get to do that. More raw: I think I can get away with giving you less.
It reflects a growing problem in our society, that we are pulling up ladders to prosperity by reinforcing natural dynamics to exacerbate them (i.e. bigger slice). Often we're doing so in ways that reduces additive economic outcomes (i.e. smaller pie).
The challenge with location based pay is that this makes the offered salary less competitive and the labor more competitive. This increases the probability of turnover so those costs eat up the gained efficiency. However, the losses are booked in an illegible manner which allows them pay reducer's biases to avoid noticing them.