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> Your pay is based on the cost to hire your replacement. That’s it. Only in an imaginary world of perfect information and labor liquidity, which is about as f

> Your pay is based on the cost to hire your replacement. That’s it. Only in an imaginary world of perfect information and labor liquidity, which is about as far from what we have (and could have) as can be. Location-adjusted pay for remote US workers is indeed a social norm, proposed by some firms and accepted by enough of labor for it to work for them. It persists mostly because it exists and because there’s no organized effort to disrupt it. Nonetheless, their are still many firms that don’t do that, many employees that don’t settle for it, and some firms that initially negotiate from it while accepting counteroffers that reject it. Reducing an extremely complicated market to an oversimplified post hoc theory, just because it exists a certain way, is neither correct nor helpful to the issue at hand. It does nothing but shut down richer discussion and reinforce an incidental status quo.

AndrewKemendo 4y ago
I'm emotionally with you, however the OP is right in that the GP most likely doesn't have any options other than quitting and going to a company that doesn't do this OP is also correct in that the following is how HR at almost every large company thinks about comp: 1. Comp is usually not set by a Hiring Manager and is specifically based on "comparable" which is based on job type and location. 2. Job type and location is by far the easiest way to create a heuristic for pay rates because the data is public It's basically impossible to individually value everyone's contribution consistently and without bias across hundreds or thousands of employees - plus I don't think people would want to actually be judged with any method that puts granular measurement on something as vague as "value" So if you can come up with a better way to determine pay *at scale* other than the open market approach, I'm super interested. The only way to do this in my mind is to never pass -- lets say -- 100 employees.
- jogu 4y ago
  Just a small nit but I think you mixed up OP (Original Poster) and GP (Grand Parent).
  - jlkuester7 4y ago
    Hah! I was just wondering if maybe my understanding of those terms was incorrect... Thanks for confirming that I am not going crazy (in that way, at least)!
- jlkuester7 4y ago
  All in all, I agree with what you are saying. I would just like to add that I have found myself extremely happy working for a company of ~100 people (especially when compared with my previous company of ~30,000).
chrismcb 4y ago
I'm not sure why you think this is not helpful. Yes there is a bit more to it than "how much does it cost to replace you" but it is correct and is helpful. You can still have a discussion, but about what?
robertlagrant 4y ago
> Location-adjusted pay for remote US workers is indeed a social norm That's backwards, though. It's a social norm because it's the most workable solution. Firms that overpay salaries (defining overpay as paying far above the market rate in any given region) will not be able to afford as many employees / highest quality employees / as much marketing / as much downturn stability or runway / as much other investment as their competitors, so they will lose on average. And this makes sense. The same forces that drive salaries up (competition from other employers willing to employ the same person) also drive it down. You can't only have upside.
- amadeuspagel 4y ago
  > Firms that overpay salaries (defining overpay as paying far above the market rate in any given region) Why the market rate in any given region? Why not just the market rate?
  - robertlagrant 4y ago
    There is no single one. Do you mean the market rate in the most expensive places to live in the world?
    - deleted 4y ago
      [deleted]
    - amadeuspagel 4y ago
      See that's kind of my question: Why and how is there no single market rate? If you have truly worldwide remote work, that's what you would expect, right?
      - mtnGoat 4y ago
        Not exactly. Because not all locations have the same value. Ie; harder to travel to, less infrastructure, more latency, working hours not lined up with certain market hours, etc. Two prior doing the same thing in entirely different places, aren’t always equal.
Spooky23 4y ago
In the US, sure. There are a very small number of employers paying employees in say Eastern Europe, Africa or South Asia the same as an American equivalent. Hell, I worked for a Canadian company that paid Canadian employees 30% less.

AndrewKemendo 4y ago

I'm emotionally with you, however the OP is right in that the GP most likely doesn't have any options other than quitting and going to a company that doesn't do this OP is also correct in that the following is how HR at almost every large company thinks about comp: 1. Comp is usually not set by a Hiring Manager and is specifically based on "comparable" which is based on job type and location. 2. Job type and location is by far the easiest way to create a heuristic for pay rates because the data is public It's basically impossible to individually value everyone's contribution consistently and without bias across hundreds or thousands of employees - plus I don't think people would want to actually be judged with any method that puts granular measurement on something as vague as "value" So if you can come up with a better way to determine pay *at scale* other than the open market approach, I'm super interested. The only way to do this in my mind is to never pass -- lets say -- 100 employees.

jogu 4y ago
Just a small nit but I think you mixed up OP (Original Poster) and GP (Grand Parent).
- jlkuester7 4y ago
  Hah! I was just wondering if maybe my understanding of those terms was incorrect... Thanks for confirming that I am not going crazy (in that way, at least)!
jlkuester7 4y ago
All in all, I agree with what you are saying. I would just like to add that I have found myself extremely happy working for a company of ~100 people (especially when compared with my previous company of ~30,000).

chrismcb 4y ago

I'm not sure why you think this is not helpful. Yes there is a bit more to it than "how much does it cost to replace you" but it is correct and is helpful. You can still have a discussion, but about what?

robertlagrant 4y ago

> Location-adjusted pay for remote US workers is indeed a social norm That's backwards, though. It's a social norm because it's the most workable solution. Firms that overpay salaries (defining overpay as paying far above the market rate in any given region) will not be able to afford as many employees / highest quality employees / as much marketing / as much downturn stability or runway / as much other investment as their competitors, so they will lose on average. And this makes sense. The same forces that drive salaries up (competition from other employers willing to employ the same person) also drive it down. You can't only have upside.

amadeuspagel 4y ago
> Firms that overpay salaries (defining overpay as paying far above the market rate in any given region) Why the market rate in any given region? Why not just the market rate?
- robertlagrant 4y ago
  There is no single one. Do you mean the market rate in the most expensive places to live in the world?
  - deleted 4y ago
    [deleted]
  - amadeuspagel 4y ago
    See that's kind of my question: Why and how is there no single market rate? If you have truly worldwide remote work, that's what you would expect, right?
    - mtnGoat 4y ago
      Not exactly. Because not all locations have the same value. Ie; harder to travel to, less infrastructure, more latency, working hours not lined up with certain market hours, etc. Two prior doing the same thing in entirely different places, aren’t always equal.

Spooky23 4y ago

In the US, sure. There are a very small number of employers paying employees in say Eastern Europe, Africa or South Asia the same as an American equivalent. Hell, I worked for a Canadian company that paid Canadian employees 30% less.