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Locally-adjusted pay is a fluke if revenues are not locally constrained (like a coffee shop). It's just another way employers try and nickle and dime workers, a

Locally-adjusted pay is a fluke if revenues are not locally constrained (like a coffee shop). It's just another way employers try and nickle and dime workers, and it's sad that a large class of workers have been brainwashed to support it because somehow they're more upset at the other workers making more, than the company trying to pull a fast on on them. "But you would make so much more than your neighbors!". Fuck off with that noise. I don't care what my neighbors make, I care what the company is earning from my labor and getting my fair share. I have no problem extorting more from a company that has no problem extorting more from me. You also won't see this for senior management. As a VP/C-level, I've never had a potential employer put pressure on salary during a negotiation because of my location (though it's always been domestic). It's never even come up besides relocation discussions.

tristor 4y ago
> You also won't see this for senior management. As a VP/C-level, I've never had a potential employer put pressure on salary during a negotiation because of my location (though it's always been domestic). It's never even come up besides relocation discussions. This is absolutely true and it's because executives usually have spent at least some amount of time doing "sales" type roles where they learn what value selling is. I always do value selling during my salary negotiations, and I too pretty much concern myself only with how much I bring to the table and what a fair cut of that for myself is. My location has absolutely nothing to do with that, and I've delivered a ton of value in my career from far more remote locations than most remote workers find themselves in.
- leeoniya 4y ago
  > This is absolutely true and it's because executives usually have spent at least some amount of time doing "sales" type roles where they learn what value selling is. or because there are two orders of magnitude fewer VPs/C-levels than line workers. an extra +100k for a single unicorn employee is easier to justify than +20k comp x 100 replaceable employees
  - deleted 4y ago
    [deleted]
  - leaflets2 4y ago
    And, when execs give other execs high salaries, it's simpler for them themselves to keep their own high salaries? Otherwise, after a while, maybe others in the company would say: The other execs don't make more than this:... Why should we pay you so much?
- aahortwwy 4y ago
  Value selling isn't an option for most employees. Try it in a typical salary negotiation and you'll get funny looks followed by a repeat of their standard offer.
slg 4y ago
>I care what the company is earning from my labor and getting my fair share. I have no problem extorting more from a company that has no problem extorting more from me. This just feels naive to me. You aren't being paid based on what your labor is earning your company. That number is totally irrelevant in a world in which businesses can run on VC money instead of actual revenue. You are paid based of both yours and your employers next best alternative. The reason people in high cost of living areas have traditionally had higher salaries is because there are more jobs in high cost of living areas and therefore more alternatives for potential employees. It is easier for an engineer in the Bay Area to get a competitive offer than it is for an engineer in Akron, Ohio. That is why companies in Akron pay less, there are fewer employers there looking to hire developers. While I understand all the arguments about fairness, we can't ignore that all these companies are purely responding to capitalist incentives. If we demand they pay employees the same regardless of location, the wage rate they pay will drop. This is because there are more developers living in low cost of living areas willing to work for that set price than in high cost of living areas. Why would a tech company hire a developer in San Francisco for $300k when they can get a similar one for $100k in Akron? That company isn't suddenly going to be generous and decide that the employee in Akron deserves $300k too. They are going to decide that cost of living shouldn't matter and maybe pay everyone $110k. Sure, that improves the situation for people living in Akron, but does it improve the situation for developers as a whole?
- tomnipotent 4y ago
  > You aren't being paid based on what your labor is earning your company. I've managed P&L at multiple companies. Salaries are inevitably influenced by cash flow projections and revenues, and are absolutely aligned in multiple dimensions to revenues. > cost of living shouldn't matter and maybe pay everyone $110k No, they're going to pay whatever their margins can tolerate while competing for labor. If Google can manage the salaries they have with staff living mostly in high cost-of-living cities, so they can also support those margins with staff living anywhere else in the world. Why is it only capitalism when the company is greedy?
  - slg 4y ago
fijiaarone 4y ago
Actually senior management takes this into account — they’d only be making 3 million if they lived in Fremont but since they live in Malibu they get $30 million plus a stipend for their SF penthouse.
- tomnipotent 4y ago
  How does HN have such ridiculous ideas of what other people are making? I had someone yesterday tell me that a mid-level marketing role at Stripe was pulling in 3-5M per year, and probably made 20M over their four years there. An SVP is pulling down a base of $300-600k, and stock comp (option grants & RSU's) may be doubling or even tripling that but very few are getting 10-100x base. Maybe C-levels, but even then I'd wager more people can fit in a Boeing 777 than are seeing packages like that.
  - bombcar 4y ago
    People always take the outlier as the norm. If you once got to work in 30 because there was absolutely no traffic, many people will from then on say it takes "30 minutes" to get to work, and be perpetually late.
  - nl 4y ago
    Lots of people on HN don't understand the difference between C-level exec roles ("management") and functional management roles ("management"). They also look at salaries at non-public startups where some part of the package is denominated in the stock options price (which may or may not be fiction).
  - bradlys 4y ago
    Varies a lot. I’ve seen people at smaller public companies get $5m+/yr offers and they managed maybe 15 people total. SV is weird - some people get really big offers. With crazy stock valuations and growth - some people do be getting big stacks. They might’ve gotten a $300k + 600k offer but then it turns into $300k + 3000k because stock went up 5x. Happens a lot here.
    - 4y ago
Barrin92 4y ago
>Locally-adjusted pay is a fluke if revenues are not locally constrained You don't get paid based on company revenue, you get paid based on the lowest amount you (or someone you're competing with) are willing to agree to sell your labour for. That amount is going to be lower if your cost of living is lower. People earning less if they work remotely in Podunk, Idaho compared to SF is no different from someone earning less in Bangladesh than in Italy even if they do the same job.
- vladvasiliu 4y ago
  Fair enough. But it would seem that for a remote worker, the value for the company comes from what they produce, not from where they produce it from. To me, this would instead be an argument that "since engineers are equal, might as well get the cheapest one". Which is an argument I can understand, even if I don't agree. But this would mean that your compensation would be mostly fixed, and you'd mostly look for people living in cheaper places, since this should give you a better bang for your buck. Which would mean, basically, that you'd be looking to pay en engineer in San Francisco the same as one living in a tent in Africa. If they're the same, why would you pay 100x more for the one in SF?
  - leaflets2 4y ago
    If you change the argument to this: "Among equal engineers, get the cheapest one"
- tomnipotent 4y ago
  Absolutely true in labor markets where supply exceeds demand, but tech is not currently one of them.
  - Handytinge 4y ago
    It absolutely is, when speaking on a global/remote scale.
- deleted 4y ago
  [deleted]
mytailorisrich 4y ago
This applies whether you work remotely or on site, actually. The difference is that without remote opportunities people are constrained to their local area so companies can indeed pay, say, an engineer in India much less than one in Silicon Valley although output for company may be very similar.
silisili 4y ago
It also only works if people stay put. I made less than my CA counterparts for nearly a decade, constantly reminding me just how expensive CA was. Fast forward 10 years, a quarter of them sold their house and basically retired in my area. Yay.
- leaflets2 4y ago
  How did this affect their salaries? (If at all)
  - silisili 4y ago
    This has been rather recent - the ones that stayed with the company did not get adjusted down. As you may imagine, it's caused a ton of turmoil. Which then led to 'stop sharing your salary' type suggestions, of course.
SergeAx 4y ago
> I care what the company is earning from my labor and getting my fair share. If you think that your work has more value than you are being paid, why don't you just stop working for those companies and start working for yourself?

tristor 4y ago

> You also won't see this for senior management. As a VP/C-level, I've never had a potential employer put pressure on salary during a negotiation because of my location (though it's always been domestic). It's never even come up besides relocation discussions. This is absolutely true and it's because executives usually have spent at least some amount of time doing "sales" type roles where they learn what value selling is. I always do value selling during my salary negotiations, and I too pretty much concern myself only with how much I bring to the table and what a fair cut of that for myself is. My location has absolutely nothing to do with that, and I've delivered a ton of value in my career from far more remote locations than most remote workers find themselves in.

leeoniya 4y ago
> This is absolutely true and it's because executives usually have spent at least some amount of time doing "sales" type roles where they learn what value selling is. or because there are two orders of magnitude fewer VPs/C-levels than line workers. an extra +100k for a single unicorn employee is easier to justify than +20k comp x 100 replaceable employees
- deleted 4y ago
  [deleted]
- leaflets2 4y ago
  And, when execs give other execs high salaries, it's simpler for them themselves to keep their own high salaries? Otherwise, after a while, maybe others in the company would say: The other execs don't make more than this:... Why should we pay you so much?
aahortwwy 4y ago
Value selling isn't an option for most employees. Try it in a typical salary negotiation and you'll get funny looks followed by a repeat of their standard offer.

slg 4y ago

>I care what the company is earning from my labor and getting my fair share. I have no problem extorting more from a company that has no problem extorting more from me. This just feels naive to me. You aren't being paid based on what your labor is earning your company. That number is totally irrelevant in a world in which businesses can run on VC money instead of actual revenue. You are paid based of both yours and your employers next best alternative. The reason people in high cost of living areas have traditionally had higher salaries is because there are more jobs in high cost of living areas and therefore more alternatives for potential employees. It is easier for an engineer in the Bay Area to get a competitive offer than it is for an engineer in Akron, Ohio. That is why companies in Akron pay less, there are fewer employers there looking to hire developers. While I understand all the arguments about fairness, we can't ignore that all these companies are purely responding to capitalist incentives. If we demand they pay employees the same regardless of location, the wage rate they pay will drop. This is because there are more developers living in low cost of living areas willing to work for that set price than in high cost of living areas. Why would a tech company hire a developer in San Francisco for $300k when they can get a similar one for $100k in Akron? That company isn't suddenly going to be generous and decide that the employee in Akron deserves $300k too. They are going to decide that cost of living shouldn't matter and maybe pay everyone $110k. Sure, that improves the situation for people living in Akron, but does it improve the situation for developers as a whole?

tomnipotent 4y ago
> You aren't being paid based on what your labor is earning your company. I've managed P&L at multiple companies. Salaries are inevitably influenced by cash flow projections and revenues, and are absolutely aligned in multiple dimensions to revenues. > cost of living shouldn't matter and maybe pay everyone $110k No, they're going to pay whatever their margins can tolerate while competing for labor. If Google can manage the salaries they have with staff living mostly in high cost-of-living cities, so they can also support those margins with staff living anywhere else in the world. Why is it only capitalism when the company is greedy?
- slg 4y ago

fijiaarone 4y ago

Actually senior management takes this into account — they’d only be making 3 million if they lived in Fremont but since they live in Malibu they get $30 million plus a stipend for their SF penthouse.

tomnipotent 4y ago
How does HN have such ridiculous ideas of what other people are making? I had someone yesterday tell me that a mid-level marketing role at Stripe was pulling in 3-5M per year, and probably made 20M over their four years there. An SVP is pulling down a base of $300-600k, and stock comp (option grants & RSU's) may be doubling or even tripling that but very few are getting 10-100x base. Maybe C-levels, but even then I'd wager more people can fit in a Boeing 777 than are seeing packages like that.
- bombcar 4y ago
  People always take the outlier as the norm. If you once got to work in 30 because there was absolutely no traffic, many people will from then on say it takes "30 minutes" to get to work, and be perpetually late.
- nl 4y ago
  Lots of people on HN don't understand the difference between C-level exec roles ("management") and functional management roles ("management"). They also look at salaries at non-public startups where some part of the package is denominated in the stock options price (which may or may not be fiction).
- bradlys 4y ago
  Varies a lot. I’ve seen people at smaller public companies get $5m+/yr offers and they managed maybe 15 people total. SV is weird - some people get really big offers. With crazy stock valuations and growth - some people do be getting big stacks. They might’ve gotten a $300k + 600k offer but then it turns into $300k + 3000k because stock went up 5x. Happens a lot here.
  - 4y ago

Barrin92 4y ago

>Locally-adjusted pay is a fluke if revenues are not locally constrained You don't get paid based on company revenue, you get paid based on the lowest amount you (or someone you're competing with) are willing to agree to sell your labour for. That amount is going to be lower if your cost of living is lower. People earning less if they work remotely in Podunk, Idaho compared to SF is no different from someone earning less in Bangladesh than in Italy even if they do the same job.

vladvasiliu 4y ago
Fair enough. But it would seem that for a remote worker, the value for the company comes from what they produce, not from where they produce it from. To me, this would instead be an argument that "since engineers are equal, might as well get the cheapest one". Which is an argument I can understand, even if I don't agree. But this would mean that your compensation would be mostly fixed, and you'd mostly look for people living in cheaper places, since this should give you a better bang for your buck. Which would mean, basically, that you'd be looking to pay en engineer in San Francisco the same as one living in a tent in Africa. If they're the same, why would you pay 100x more for the one in SF?
- leaflets2 4y ago
  If you change the argument to this: "Among equal engineers, get the cheapest one"
tomnipotent 4y ago
Absolutely true in labor markets where supply exceeds demand, but tech is not currently one of them.
- Handytinge 4y ago
  It absolutely is, when speaking on a global/remote scale.
deleted 4y ago
[deleted]

mytailorisrich 4y ago

This applies whether you work remotely or on site, actually. The difference is that without remote opportunities people are constrained to their local area so companies can indeed pay, say, an engineer in India much less than one in Silicon Valley although output for company may be very similar.

silisili 4y ago

It also only works if people stay put. I made less than my CA counterparts for nearly a decade, constantly reminding me just how expensive CA was. Fast forward 10 years, a quarter of them sold their house and basically retired in my area. Yay.

leaflets2 4y ago
How did this affect their salaries? (If at all)
- silisili 4y ago
  This has been rather recent - the ones that stayed with the company did not get adjusted down. As you may imagine, it's caused a ton of turmoil. Which then led to 'stop sharing your salary' type suggestions, of course.

SergeAx 4y ago

> I care what the company is earning from my labor and getting my fair share. If you think that your work has more value than you are being paid, why don't you just stop working for those companies and start working for yourself?