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If it stops being the case, the salaries will equalize due to market pressures. But it is not the case and it probably will never be the case because different

If it stops being the case, the salaries will equalize due to market pressures. But it is not the case and it probably will never be the case because different locations have different amenities and different economic situations in general, this coupled with the fact that lots of jobs can’t be done from home means that local job markets will always be differentiated.

lazide 6y ago
It's not an if (for certain industries), it's been happening and is only accelerating. It's exactly what was behind the outsourcing to India of IT for instance. The difference now is artificial constraints within countries around locale are loosening, meaning locals can play the same game (and take advantage of similar bid/ask spreads personally). IT work in India happened because while super hard to get started/get over the bar, the wage differential was huge (between what a viable candidate would accept, and what the company was willing to pay). Multinationals who could get over the bar to take advantage of it have reaped trillions. For jobs that are fundamentally local, it is different (plumber for instance). The number of those jobs is decreasing over time, however. This will likely result in a 'reverse brain drain' as long as conditions persist, with rural areas benefitting from smart and ambitious people no longer being forced to relocate to a city to benefit. They'll pump money into the local economy. For people already remote, they'll have more competition and will need to continue to differentiate. For those in cities, well - it's gonna be rough. Long term, it's likely that center of gravity will shift back to the cities - physical distance does have beneficial effects, and at least when there isn't a pandemic, it tends to override the other issues with city life (competition for space means high rents, noise, etc.). It might take awhile though.
- lazide 6y ago
  And to address your concerns re: salary equalization - it's happened/happening for sure. It is why it is so important to uplevel and be the higher/more valuable employee/asset. If you're a good problem solver and software engineer, you can demand a higher wage, even with the equalization, as you're in a top %'tile market demand wise. If you're aiming for low/mid-level (generic) employee, you're eventually going to have a hard time competing with someone who can survive on less. It has been what is causing a lot of the angst in the middle and lower class (especially in manufacturing jobs), as their labor is easy to outsource in many cases to cheaper places.

lazide 6y ago

It's not an if (for certain industries), it's been happening and is only accelerating. It's exactly what was behind the outsourcing to India of IT for instance. The difference now is artificial constraints within countries around locale are loosening, meaning locals can play the same game (and take advantage of similar bid/ask spreads personally). IT work in India happened because while super hard to get started/get over the bar, the wage differential was huge (between what a viable candidate would accept, and what the company was willing to pay). Multinationals who could get over the bar to take advantage of it have reaped trillions. For jobs that are fundamentally local, it is different (plumber for instance). The number of those jobs is decreasing over time, however. This will likely result in a 'reverse brain drain' as long as conditions persist, with rural areas benefitting from smart and ambitious people no longer being forced to relocate to a city to benefit. They'll pump money into the local economy. For people already remote, they'll have more competition and will need to continue to differentiate. For those in cities, well - it's gonna be rough. Long term, it's likely that center of gravity will shift back to the cities - physical distance does have beneficial effects, and at least when there isn't a pandemic, it tends to override the other issues with city life (competition for space means high rents, noise, etc.). It might take awhile though.

lazide 6y ago
And to address your concerns re: salary equalization - it's happened/happening for sure. It is why it is so important to uplevel and be the higher/more valuable employee/asset. If you're a good problem solver and software engineer, you can demand a higher wage, even with the equalization, as you're in a top %'tile market demand wise. If you're aiming for low/mid-level (generic) employee, you're eventually going to have a hard time competing with someone who can survive on less. It has been what is causing a lot of the angst in the middle and lower class (especially in manufacturing jobs), as their labor is easy to outsource in many cases to cheaper places.