3 ms·
Location-based pay is an unfortunate necessity. If it didn't exist, companies just wouldn't get any employees in San Francisco, nobody would be willing to work
by GekkePrutser 6y ago
Location-based pay is an unfortunate necessity.
If it didn't exist, companies just wouldn't get any employees in San Francisco, nobody would be willing to work for the wage. Obviously they're not going to pay SF wages in the rest of the world. I mean a company like FaceBook could, they certainly have the means. But they wouldn't. The shareholders wouldn't let them, due diligence and all. They have to maximise their return to the shareholders.
If I would be earning what I do in Barcelona and living in SF I wouldn't be able to even pay the rent. If wages for the same jobs had to be the same everywhere, it would mean the lowest common pay would quickly become the standard. Effectively all IT jobs would be moved to India. Nobody would bother working in the US for that pittance so there'd be no point hiring for it.
So obviously cost of living factors into it. It makes sense that this goes both ways. Otherwise someone from SF moving elsewhere would be making a lot more than their local colleagues and that wouldn't be fair either.
In fact when I moved to Barcelona from Ireland (with the same company) my pay was reduced somewhat. I had to sign a new contract with the local entity against local conditions. It was a bit of a bummer but on the other hand, I did gain a lot of quality of life. Great weather. Free healthcare that's actually good. Public transport that actually works (so no more car expenses). In the end it was a good move.
If you fight against this you will only increase the race to the bottom (and to Asia). It's this very thing that keeps areas like San Francisco viable as an IT hub. If you're expecting them to honour the juicy SF pay everywhere you won't see that. Even if they do you'll be the first to get axed when budgets need cutting.
What you see in general is that pay is indexed to local standards so you get the same standard of living for the same job in each place. At least this is what my employer does. Which is fair enough in my point of view. Money is a means to live, not a goal on its own.
Would it really be fair to have people living in one place scraping pennies to get by and others living like a king while doing the same job?