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This debate is made more complicated than it needs to be because almost everyone keeps getting confused between cost of living and cost of labor. These two are
by ajmurmann 6y ago
This debate is made more complicated than it needs to be because almost everyone keeps getting confused between cost of living and cost of labor. These two are somewhat correlated but can easily deviate from each other especially for a given industry in a given place.
We are right now in a transition phase during which employers and employees are trying to find market equilibrium under these here conditions were remote work suddenly is a bigger option. I expect that we'll naturally arrive at a few different pay ranges for similar work that result in essence in different markets based on constraints required by the work. That might be based on a requirement to be in a specific location, time zone, country (for legal reasons), or unconstrained as long as the work gets done.
Ultimately I expect this to result in location mattering a whole lot less for most software job's compensation. This means much lower comp for folks in SF or NYC and much higher comp for folks in places that currently have low cost of labor like the middle of the US, but also Central and South America.
Remote work is gonna be the great equalizer. It's exciting to be able to work from more locations. On the other hand the dream of a silicon valley salary for folks who moved to Bozeman, MT will last a short time for the average developer. And salaries in SV will also adjust down as fewer jobs will require being there and now compete with developers in more locations.
Edit: typo
- jaarse 6y agoAs someone who is more interested in economics than software, I believe you are 100% right. Once companies figure out how to have employees work remotely, there won’t be as many high priced SV developer jobs. Companies just might decide to higher all (insert Eastern European block country here) developers because they are “local” to each other and are willing to work for a fraction of the cost. It’s not about what you are worth. It’s what companies can replace you for, and if you are remote that replacement value goes down.
- ummonk 6y agoThey could have done that in the past too (and plenty of companies did - just not the ones that went on to be the most successful). Outsourcing to one country didn’t require remote work.
- ajmurmann 6y agoThey could have and many did. I think many who didn't were afraid that it wouldn't go well, but were now forced into a learning experience.
- randomdude402 6y agoNot exactly eastern European, but the company I recently left has a group of devs in Dublin like this. Interestingly, I interviewed with a company last week that has almost the entirety of their dev teams in Dublin. Neither place has any obvious business reason to have development happening there, so I can only assume they are paying meaningfully less comp.
- ThalesX 6y agoIreland is a EU tax haven; companies go there to pay less taxes, not to enjoy the beautiful sheep of the Irish grasslands.