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Your comment could justify a divide in pay between in-person and remote workers. Presumably, the ability to be available in person is valuable in some companies

Your comment could justify a divide in pay between in-person and remote workers. Presumably, the ability to be available in person is valuable in some companies and the market for that is smaller, so more compensation. However, what it does not justify is location-based pay. From the company's perspective, there is no significant difference between a remote worker in New York City or Birmingham, Alabama.

ianai 6y ago
It’s funny how the power of markets seems so easily used to reinforce the current market outcome. Like wage prices are artificially high or right where they should be because the market must be right. Without looking at the factors closely (like one should when discussing labor especially), there’s the possible outcome that current wages are held down below their market clearing prices by external factors and market power.
- Negitivefrags 6y ago
  The market is always right pretty much by definition. The “external factors” you speak of are the market conditions in which the market operates. You can change the external factors and the market will rebalance to a new equalibrium but that doenst mean the market was wrong before and correct now.
cactus2093 6y ago
I still think what I said is true basically by definition, but yeah fair enough it does beg the question why companies don't hire exclusively in cheap areas now, driving down the market rates in expensive cities. I think supply and demand is still a big part of the answer. By square mileage the potential locations where employees can live has grown by 200x by opening up to remote work anywhere in the US (napkin math, US is 3.8 million sq miles, bay area and tri-state area combined are ~20k sq miles). But obviously the number of available engineers hasn't expanded by nearly that much, engineers are much more concentrated in the areas where most of the jobs have been concentrated up until now. I.e. companies still can't afford to limit their supply to remote only, just as they increasingly can't afford to limit supply to bay area only. Then there's also the perhaps more controversial issue of skill & experience. The most in-demand engineers are the people with experience at Google, FB, etc. and these people are concentrated in the places where these companies are. Ambitious people also have self-selected to live in these hot markets for years. You could argue that these proxy factors shouldn't matter and companies should be measuring skill directly, but as an industry we still haven't cracked that problem. So on average, a remote engineer in NYC probably is more valuable to most companies than one in Birmingham, Al. Like it or not, there's still a lot inertia to overcome here (and maybe even a little bit of validity to these patterns).
- mattmanser 6y ago
  This is pretty much wrong, the evidence is against you, you are paying for in-location developers. There are plenty of developers who speak great English in the EU, many natively in the UK and Australia and Canada. Why are these not all getting heavily poached by SV? Because SV value in-person developers, so have driven up the pay for developers in SV, but in Europe a mid-level developer is still on something like €40-50k.
  - burntoutfire 6y ago
    Remote work from Europe for a SV company is problematic, there's practically no overlap of working time so the European workers needs to work late evening and into the night to be able to stay in touch with the team. Not that many experienced (i.e. older and with families) people are ok with that.
  - MAGZine 6y ago
    timezone and cultural differences.

ianai 6y ago

It’s funny how the power of markets seems so easily used to reinforce the current market outcome. Like wage prices are artificially high or right where they should be because the market must be right. Without looking at the factors closely (like one should when discussing labor especially), there’s the possible outcome that current wages are held down below their market clearing prices by external factors and market power.

Negitivefrags 6y ago
The market is always right pretty much by definition. The “external factors” you speak of are the market conditions in which the market operates. You can change the external factors and the market will rebalance to a new equalibrium but that doenst mean the market was wrong before and correct now.

cactus2093 6y ago

I still think what I said is true basically by definition, but yeah fair enough it does beg the question why companies don't hire exclusively in cheap areas now, driving down the market rates in expensive cities. I think supply and demand is still a big part of the answer. By square mileage the potential locations where employees can live has grown by 200x by opening up to remote work anywhere in the US (napkin math, US is 3.8 million sq miles, bay area and tri-state area combined are ~20k sq miles). But obviously the number of available engineers hasn't expanded by nearly that much, engineers are much more concentrated in the areas where most of the jobs have been concentrated up until now. I.e. companies still can't afford to limit their supply to remote only, just as they increasingly can't afford to limit supply to bay area only. Then there's also the perhaps more controversial issue of skill & experience. The most in-demand engineers are the people with experience at Google, FB, etc. and these people are concentrated in the places where these companies are. Ambitious people also have self-selected to live in these hot markets for years. You could argue that these proxy factors shouldn't matter and companies should be measuring skill directly, but as an industry we still haven't cracked that problem. So on average, a remote engineer in NYC probably is more valuable to most companies than one in Birmingham, Al. Like it or not, there's still a lot inertia to overcome here (and maybe even a little bit of validity to these patterns).

mattmanser 6y ago
This is pretty much wrong, the evidence is against you, you are paying for in-location developers. There are plenty of developers who speak great English in the EU, many natively in the UK and Australia and Canada. Why are these not all getting heavily poached by SV? Because SV value in-person developers, so have driven up the pay for developers in SV, but in Europe a mid-level developer is still on something like €40-50k.
- burntoutfire 6y ago
  Remote work from Europe for a SV company is problematic, there's practically no overlap of working time so the European workers needs to work late evening and into the night to be able to stay in touch with the team. Not that many experienced (i.e. older and with families) people are ok with that.
- MAGZine 6y ago
  timezone and cultural differences.