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For companies like this that profess to care about their employees (and I believe them), what’s the justification for paying less in e.g. London than USA given

For companies like this that profess to care about their employees (and I believe them), what’s the justification for paying less in e.g. London than USA given London is just as expensive? Will progressive companies start adjusting pay according to cost of living rather than the local labor market?

pc86 4y ago
> what’s the justification for paying less in e.g. London than USA You mention it in the next sentence - the local labor market. UK developers earn a fraction of what US developers do. We can debate the root causes but it seems irrelevant why it's true, only whether or not it is true. I'm not sure why cost of living should factor into comp at all. I can have a much higher COL than you, but if you bring more value to the company, and you can get better offers than I can, you should make more than me.
- da39a3ee 4y ago
  Of course, I'm talking about comparing equally skilled and experienced employees. Can you rephrase your answer without conflating employee aptitude and CoL/local Labor market?
  - pc86 4y ago
    They're linked, intrinsically. If the someone's "market" (whether that's local, or global, or front-end, or full stack, or whatever) prices then at $80k/yr a business is going to try to pay them that much or less. Whether you want to admit it or not, locality plays a role in that.
    - da39a3ee 4y ago
      I'm still not sure I'm understanding you. What I'm asking about is the question of compensation conditional on experience and skill being identical. So by definition, I'm taking experience/skill differences out of the picture. So we have Alice: backend engineer in London, able to get $120K from UK companies Alicia: backend engineer in NYC, able to get $250K from US companies with identical skill/experience. And we say for the sake of argument that cost of living is identical in London and NYC. Now suppose Alicia's company wants to hire Alice. Certainly, I agree that it makes perfect sense in a free labor market for the US company to try to get Alice for $120K. But the company I work for (a well-known US tech company) makes many claims about how "fair" its compensation program is. So what I'm inviting you to discuss is whether or not that company would have a hard time making an argument that adjusting according to the local labor market is actually "fair". Essentially, Alice is being penalized for happening to be in a locality where her skills are valued less. But that is out of her control. Would it not be "fairer" for a company to adjust compensation as follows: 1. Firstly, according to skill / experience And then, either 2a. That's it, end of story: skill / experience only. or 2b. By local cost of living, within equivalent skill levels.
stu2b50 4y ago
The article explicitly says they’re paying everyone the same pay across localities now. But for the many company’s that don’t, the justification is simply that the cost of Human resources is not based around output but around market dynamics like other resources. Fresh fruit in Japan costs more than it does in California not because the Japanese fruit is better per se, but because the cost of production is higher.
- da39a3ee 4y ago
  It says they're paying the same within countries, not between. In what sense is the cost of production of a programmer higher in the USA than in the UK?
  - pc86 4y ago
    I don't accept the premise, but student loans and healthcare are high costs that US folks bear that UK folks don't. You keep trying to pretend that the local labor market is irrelevant. Until you accept that it isn't, or at the very least accept that companies don't think it is, you're going to keep talking past everyone here.
refurb 4y ago
For companies like this that profess to care about their employees (and I believe them) That's your problem right there - you believe them.

pc86 4y ago

> what’s the justification for paying less in e.g. London than USA You mention it in the next sentence - the local labor market. UK developers earn a fraction of what US developers do. We can debate the root causes but it seems irrelevant why it's true, only whether or not it is true. I'm not sure why cost of living should factor into comp at all. I can have a much higher COL than you, but if you bring more value to the company, and you can get better offers than I can, you should make more than me.

da39a3ee 4y ago
Of course, I'm talking about comparing equally skilled and experienced employees. Can you rephrase your answer without conflating employee aptitude and CoL/local Labor market?
- pc86 4y ago
  They're linked, intrinsically. If the someone's "market" (whether that's local, or global, or front-end, or full stack, or whatever) prices then at $80k/yr a business is going to try to pay them that much or less. Whether you want to admit it or not, locality plays a role in that.
  - da39a3ee 4y ago
    I'm still not sure I'm understanding you. What I'm asking about is the question of compensation conditional on experience and skill being identical. So by definition, I'm taking experience/skill differences out of the picture. So we have Alice: backend engineer in London, able to get $120K from UK companies Alicia: backend engineer in NYC, able to get $250K from US companies with identical skill/experience. And we say for the sake of argument that cost of living is identical in London and NYC. Now suppose Alicia's company wants to hire Alice. Certainly, I agree that it makes perfect sense in a free labor market for the US company to try to get Alice for $120K. But the company I work for (a well-known US tech company) makes many claims about how "fair" its compensation program is. So what I'm inviting you to discuss is whether or not that company would have a hard time making an argument that adjusting according to the local labor market is actually "fair". Essentially, Alice is being penalized for happening to be in a locality where her skills are valued less. But that is out of her control. Would it not be "fairer" for a company to adjust compensation as follows: 1. Firstly, according to skill / experience And then, either 2a. That's it, end of story: skill / experience only. or 2b. By local cost of living, within equivalent skill levels.

stu2b50 4y ago

The article explicitly says they’re paying everyone the same pay across localities now. But for the many company’s that don’t, the justification is simply that the cost of Human resources is not based around output but around market dynamics like other resources. Fresh fruit in Japan costs more than it does in California not because the Japanese fruit is better per se, but because the cost of production is higher.

da39a3ee 4y ago
It says they're paying the same within countries, not between. In what sense is the cost of production of a programmer higher in the USA than in the UK?
- pc86 4y ago
  I don't accept the premise, but student loans and healthcare are high costs that US folks bear that UK folks don't. You keep trying to pretend that the local labor market is irrelevant. Until you accept that it isn't, or at the very least accept that companies don't think it is, you're going to keep talking past everyone here.

refurb 4y ago

For companies like this that profess to care about their employees (and I believe them) That's your problem right there - you believe them.