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I don't see how two people producing the same output deserve different salaries based on where they live - why should geographic location dictate my salary rela

by nanidin 13y ago

I don't see how two people producing the same output deserve different salaries based on where they live - why should geographic location dictate my salary relative to my peers?

deleted 13y ago
[deleted]
dlokshin 13y ago
Because demand is less. The wage is still dictated by supply and demand. The supply is probably less, but the demand for that labor is far less. The demand for an engineer in the midwest is higher than the demand for an engineer in Thailand because there are less time barriers, language barriers, etc. A house in Palo Alto, CA costs more than the exact same house in Dexter, Michigan. If they were made of the exact same materials on the exact same size of land, you wouldn't expect them to cost the same either.
- nanidin 13y ago
  I don't think the house comparison is a good example - a house in Palo Alto can only be utilised in Palo Alto. A remote worker could work from anywhere and produce the same output, regardless of location. Pay levels based on location seem like a good way for companies to "save" money by providing a convenient excuse to pay someone less for the same work.
  - dlokshin 13y ago
    I meant it in this sort of comparison: if you uproot the house, and drop it in Palo Alto on the same size plot of land it's worth more. If the programer gets up, and moves to San Francisco, his labor is also worth more. Same person, same house, different demand (and supply).
  - vonmoltke 13y ago
    That is correct. I, living in Dallas, am willing to sell my labor in Dallas for a lower price than I am willing to sell my labor in Palo Alto. Thus, a company in Palo Alto can save money by hiring me in Dallas to do the job. There is nothing inconsistent about this.
    - nightski 13y ago
      Price should be based on the value you are providing to your clients/employer. Not your expenses.
      - bane 13y ago
        If only the price of my house was based on the value I provide my employer.
        nightski 13y ago
        What does this have to do with anything? The amount you paid for a house is based on it's value to you. Same as your employer and it's employees. I live in the midwest - a cheap place to live. But I charge SV rates because of the value I provide my clients. I don't have to charge "less" because I live in a cheap area. It is irrelevant.
  - hga 13y ago
    When you factor in the cost of living it's not an "excuse". If, after the obligatory expenses like housing and food, the employee has more after tax dollars to spend on whatever he wants and in many ways a higher quality of living (better housing, better control over crime although that's looking to change WRT California, etc.), is he getting cheated as you imply? I've lived in the Boston area and the D.C. area for a dozen years each, and have now moved back to my smallish home town in SW Missouri ... the differences are staggering. Look at imroot's policies: https://news.ycombinator.com/item?id=7568217 https://news.ycombinator.com/item?id=7568217 Officially the same pay, but the people in California get an extra 1K/month for their higher living expenses. Heck, the Federal government does this for civil servant compensation. Flip side: if the company is nasty, it'll tie up it's outside of California employees with non-competes---although that could be a bit tricky, given that it would get no support in the California state courts. How would you establish jurisdiction in the employee's home state?
alistairSH 13y ago
Market forces. Just like anything else - supply and demand. Don't think of it in terms of gross dollars. Think of it in terms of standard of living. A skilled engineer is going to have an upper-middle-class standard of living, regardless of location.
roc 13y ago
> "why should geographic location dictate my salary relative to my peers?" It doesn't. Your unwillingness to relocate does. Everyone has their own reasons for where they're willing to look for work and why. But those reasons, your reasons, have a price tag attached. To you, your reasons + your salary is equivalent to a SV salary. (Else you'd relocate.) Similarly, companies who are unwilling to allow remote workers and/or choose not to build remote teams aren't paying more because of their location. They're paying more because they value having their employees at their location and that value is greater (to them) than the difference in SV salaries vs the midwest.
ghaff 13y ago
Because "you" (the generic you--not necessarily you specifically) are usually willing to accept a different salary for a given job description based on where you lived based on a variety of factors: alternative opportunities, attractiveness of the area, cost of living (primarily housing), etc. And, in fact, jobs in higher cost of living areas (assuming equivalent jobs are actually available elsewhere) tend to not fully factor in the difference in housing prices.
- eldavido 13y ago
  > Because "you" (the generic you--not necessarily you specifically) "One". Wish this was in more standard use.
bane 13y ago
Cost of living is wildly different in different areas. People in NYC need to earn more money than somebody in Idaho Falls to live even close to a comparable lifestyle. A million dollars will buy you an "ok" 2 bed room apartment in Manhattan in an "ok" neighborhood, while a million dollars near Houston will buy you multiple acres with a brand new 7 thousand sq foot 6 bedroom 9 bath home on the waterfront with a guest house and a swimming pool next to a pro-level 18 hole golf course. If you don't understand it further, feel free to take the midwest salary and try and live in San Francisco or NYC.
- nanidin 13y ago
  OK, but imagine this situation: I have affixed a monitor with a webcam to a robot that represents "me" in an office. It is able to sit at a desk, attend meetings, etc. I work from home in some place with a lower cost of living and use the robot proxy for interaction with my peers. Should I be paid more or less than other people working in that same office, producing the same output?
  - bane 13y ago
    Less, because those people have to live there where it's more expensive. While you live where you live where it is less expensive. You're thinking of this as advantaging you, getting SF pay for working in Idaho Falls, but you need to think of is that salary in Idaho Falls is the "normal" base salary, everybody earns at that rate, and cost of living adjustments are paid on top of that base salary for people in expensive areas to create as equal of living conditions as possible in more expensive areas. This is so commonly understood that nobody bothers to break it out that way except for the Federal Government pay scale. Everybody from Podunk, Nowhere gets excited when they get a job in the big city because of this pay differential on what they'd make where they live. Except the cost differential is similar and when they arrive they suddenly realize it doesn't buy them anything more. By paying people "the same" at the base salary, your salary model would disadvantage people working and living in cities such that they could not do it and companies that need to be in cities would be unable to function. Companies with large workforces in cheaper areas could also not pay their workers SF/NYC salaries or their costs would simply overcome their revenue or if they can manage it, they may as well have just hired in SF/NYC in the first place and realized better efficiencies of physically working together. Your robot is a poor substitute for actual face-to-face interaction and introduces lots of inefficiencies into communication. Not all jobs for a company need to be in the expensive areas, so it would make more sense for companies to push those jobs to cheaper areas. But some jobs do need to be in expensive areas for efficiency. Cities exist because of those efficiencies. However, being a city with 5x population of Idaho Falls doesn't mean you have 5x the resources, so demand drives up the cost of goods and thus the cost of services rise and thus it simply costs more to live there. Companies wish to continue operating, so they need people to be able to afford to live near where the company needs to be (which is dictated by the efficiencies of the city). This is reflected by pay differentials for people that need to live and work in these cities. Nobody can live in SF or NYC on Idaho Falls pay.

by nanidin 13y ago

I don't see how two people producing the same output deserve different salaries based on where they live - why should geographic location dictate my salary relative to my peers?

deleted 13y ago

[deleted]

dlokshin 13y ago

Because demand is less. The wage is still dictated by supply and demand. The supply is probably less, but the demand for that labor is far less. The demand for an engineer in the midwest is higher than the demand for an engineer in Thailand because there are less time barriers, language barriers, etc. A house in Palo Alto, CA costs more than the exact same house in Dexter, Michigan. If they were made of the exact same materials on the exact same size of land, you wouldn't expect them to cost the same either.

nanidin 13y ago
I don't think the house comparison is a good example - a house in Palo Alto can only be utilised in Palo Alto. A remote worker could work from anywhere and produce the same output, regardless of location. Pay levels based on location seem like a good way for companies to "save" money by providing a convenient excuse to pay someone less for the same work.
- dlokshin 13y ago
  I meant it in this sort of comparison: if you uproot the house, and drop it in Palo Alto on the same size plot of land it's worth more. If the programer gets up, and moves to San Francisco, his labor is also worth more. Same person, same house, different demand (and supply).
- vonmoltke 13y ago
  That is correct. I, living in Dallas, am willing to sell my labor in Dallas for a lower price than I am willing to sell my labor in Palo Alto. Thus, a company in Palo Alto can save money by hiring me in Dallas to do the job. There is nothing inconsistent about this.
  - nightski 13y ago
    Price should be based on the value you are providing to your clients/employer. Not your expenses.
    - bane 13y ago
      If only the price of my house was based on the value I provide my employer.
      - nightski 13y ago
        What does this have to do with anything? The amount you paid for a house is based on it's value to you. Same as your employer and it's employees. I live in the midwest - a cheap place to live. But I charge SV rates because of the value I provide my clients. I don't have to charge "less" because I live in a cheap area. It is irrelevant.
- hga 13y ago
  When you factor in the cost of living it's not an "excuse". If, after the obligatory expenses like housing and food, the employee has more after tax dollars to spend on whatever he wants and in many ways a higher quality of living (better housing, better control over crime although that's looking to change WRT California, etc.), is he getting cheated as you imply? I've lived in the Boston area and the D.C. area for a dozen years each, and have now moved back to my smallish home town in SW Missouri ... the differences are staggering. Look at imroot's policies: https://news.ycombinator.com/item?id=7568217 https://news.ycombinator.com/item?id=7568217 Officially the same pay, but the people in California get an extra 1K/month for their higher living expenses. Heck, the Federal government does this for civil servant compensation. Flip side: if the company is nasty, it'll tie up it's outside of California employees with non-competes---although that could be a bit tricky, given that it would get no support in the California state courts. How would you establish jurisdiction in the employee's home state?

alistairSH 13y ago

Market forces. Just like anything else - supply and demand. Don't think of it in terms of gross dollars. Think of it in terms of standard of living. A skilled engineer is going to have an upper-middle-class standard of living, regardless of location.

roc 13y ago

> "why should geographic location dictate my salary relative to my peers?" It doesn't. Your unwillingness to relocate does. Everyone has their own reasons for where they're willing to look for work and why. But those reasons, your reasons, have a price tag attached. To you, your reasons + your salary is equivalent to a SV salary. (Else you'd relocate.) Similarly, companies who are unwilling to allow remote workers and/or choose not to build remote teams aren't paying more because of their location. They're paying more because they value having their employees at their location and that value is greater (to them) than the difference in SV salaries vs the midwest.

ghaff 13y ago

Because "you" (the generic you--not necessarily you specifically) are usually willing to accept a different salary for a given job description based on where you lived based on a variety of factors: alternative opportunities, attractiveness of the area, cost of living (primarily housing), etc. And, in fact, jobs in higher cost of living areas (assuming equivalent jobs are actually available elsewhere) tend to not fully factor in the difference in housing prices.

eldavido 13y ago
> Because "you" (the generic you--not necessarily you specifically) "One". Wish this was in more standard use.

bane 13y ago

Cost of living is wildly different in different areas. People in NYC need to earn more money than somebody in Idaho Falls to live even close to a comparable lifestyle. A million dollars will buy you an "ok" 2 bed room apartment in Manhattan in an "ok" neighborhood, while a million dollars near Houston will buy you multiple acres with a brand new 7 thousand sq foot 6 bedroom 9 bath home on the waterfront with a guest house and a swimming pool next to a pro-level 18 hole golf course. If you don't understand it further, feel free to take the midwest salary and try and live in San Francisco or NYC.

nanidin 13y ago
OK, but imagine this situation: I have affixed a monitor with a webcam to a robot that represents "me" in an office. It is able to sit at a desk, attend meetings, etc. I work from home in some place with a lower cost of living and use the robot proxy for interaction with my peers. Should I be paid more or less than other people working in that same office, producing the same output?
- bane 13y ago
  Less, because those people have to live there where it's more expensive. While you live where you live where it is less expensive. You're thinking of this as advantaging you, getting SF pay for working in Idaho Falls, but you need to think of is that salary in Idaho Falls is the "normal" base salary, everybody earns at that rate, and cost of living adjustments are paid on top of that base salary for people in expensive areas to create as equal of living conditions as possible in more expensive areas. This is so commonly understood that nobody bothers to break it out that way except for the Federal Government pay scale. Everybody from Podunk, Nowhere gets excited when they get a job in the big city because of this pay differential on what they'd make where they live. Except the cost differential is similar and when they arrive they suddenly realize it doesn't buy them anything more. By paying people "the same" at the base salary, your salary model would disadvantage people working and living in cities such that they could not do it and companies that need to be in cities would be unable to function. Companies with large workforces in cheaper areas could also not pay their workers SF/NYC salaries or their costs would simply overcome their revenue or if they can manage it, they may as well have just hired in SF/NYC in the first place and realized better efficiencies of physically working together. Your robot is a poor substitute for actual face-to-face interaction and introduces lots of inefficiencies into communication. Not all jobs for a company need to be in the expensive areas, so it would make more sense for companies to push those jobs to cheaper areas. But some jobs do need to be in expensive areas for efficiency. Cities exist because of those efficiencies. However, being a city with 5x population of Idaho Falls doesn't mean you have 5x the resources, so demand drives up the cost of goods and thus the cost of services rise and thus it simply costs more to live there. Companies wish to continue operating, so they need people to be able to afford to live near where the company needs to be (which is dictated by the efficiencies of the city). This is reflected by pay differentials for people that need to live and work in these cities. Nobody can live in SF or NYC on Idaho Falls pay.