Hacker News Reader

I don't think adding a location factor for anything that is less than 100% of the companies core location is fair. You are doing the exact same job and have the same skill level, you should be paid the same. If you decide to move somewhere where living is cheaper then that is up to you and should not affect your earnings.

This is how you keep poor countries / states poor. Instead of paying people the same which would result in larger taxes paid and more spent in those locations you are keeping status quo.

> You are doing the exact same job and have the same skill level, you should be paid the same.

Colocated employees at the same skill level performing the same job aren't paid the same - employers and employees negotiate compensation individually.

There is no "core location", and also you can't demand remote companies to implement completely equal salaries while in-situ jobs (and rents) vary wildly. It's a double standard.

Location is a factor though. If you live in the middle of nowhere, your chances of finding another job are low. If you live in SF, your chances of finding another job are high (because most jobs are still in person jobs). That is why location matters.

It has nothing to do with your value and everything to do with what the company has to pay to get the talent it wants.

Then let it be enforced via competition and market forces - rather than just using location to lowball somebody.

If lots of people are applying from a low-cost country, the employer is free to choose and thus, would be able to offer a lower salary. But from my understanding, employers want the same level of quality as they would get from the bay area, but insists on paying 3rd world wages if the remote is at a low cost of living location, even though there are very few other candidates suitable!

Well, it is enforced by competition. Not every market player is going to be rational, though. And it was rational for the CEO to try to pay lower than SFBay pay, but maybe not to bail on the negotiation entirely.

> It has nothing to do with your value and everything to do with what the company has to pay to get the talent it wants.

Hmmm... this sounds very strange.

Getting a job is dependent on you proving how much value you'll bring to the company, but your pay has nothing to do with "your value".

Sounds like someone wants their cake and to eat it, too.

> Location is a factor though. If you live in the middle of nowhere, your chances of finding another job are low. If you live in SF, your chances of finding another job are high (because most jobs are still in person jobs). That is why location matters.

This is only true as long as remote jobs are so rare that the candidate is unlikely to find an employer who will pay non-location-adjusted compensation (even if that comp is midway between Bay Area-adjusted and Asia-adjusted comp), or more directly, to pay based on value added.

And… that statement is already not true for great (top 20th percentile?) candidates, and trending towards not true for candidates in the middle of the Bell curve. That is, a person with known skills and a good network can obtain offers from multiple remote-first/remote-friendly companies today. There's already a location-ignorant market for their skills.

As more remote jobs are available, more people will get multiple remote offers, that is, they'll find a location-ignorant market for their skills. The clearing price for their skills will trend towards the value they're perceived to add, even if it takes 5 or 10 years to get there. That perceived value isn't location-adjusted, particularly for remote-first companies trying to hire the best candidates or to hire as many great candidates as they can find (rather than to save compensation expense).

I agree completely. As there are more remote jobs, this will apply less and less. At which point I suspect you'll see a bimodal distribution, much like you see with in person jobs today.

There will be the "location independent" companies that pay top dollar, and then everyone else who pays a "global market average". Top candidates will get the top pay, and everyone else, even if they live in the Bay Area, will have to fight for the "global market" rate jobs, meaning it won't be feasible to be a programmer in the Bay Area anymore (barring a solution to the California housing crisis).

In the case of a US remote worker for a California company, to which state does that worker pay state income taxes? If they're paying California taxes, they should get California money.

I know quite a few people doing remote work for California companies making California salaries, paying localized taxes. It's worth noting that they don't get California benefits either...

California taxes aren't higher because the average pay is higher... Someone making minimum wage pays the same for fuel as anyone else there. The taxes are higher because there are more social programs and generally it all costs more. the real estate in large parts of california are higher based on market desire. That creates side effects of people asking for and getting more money to work there, and it circles around.

Taxation as a percent of income is entirely down to effective spending. And often corruption. Maybe start charging Nestle fair value for all the water they remove from the state.

I agree with you, something needs to be done in order to solve the world inequity. But when a price is negotiated, it's all about how much the seller can get, or how much the buyer has to pay. The quality of work has a relative small impact on price, it's all about how much it would cost to hire someone else, or how much you would earn working at another company. We are in a good trend though, with world globalization - with the help of the Internet.

It's even more expensive in some locations. A car in Sri Lanka costs more than buying the same model in Canada. In Canada the Yaris Hatchback for example is half the current selling price in Sri Lanka. iPhones and other electronics are also priced at rates that are almost double or even more because of shipping and super high tax rates (the latter is there to keep foreign currency from flowing out of the country reserves). Rent and basic living costs is a very poor estimate indeed for calculating spending power within a country.

It's been discussed before on here.

In the UK it's particularly comical because a good number of people commute that far; I've had colleagues (Central London) living in places that according to GitLab should earn half as much.

Indeed but it's weird even when you're not remote. I live in Guildford, and companies unashamedly offer <50% of your average London pay.

The train takes 35 minutes to get into Waterloo... Commuting sucks, but it doesn't suck that much.

This is why I've exclusively worked for London based companies for the last decade or so, even though I now live about two hours outside of London. All the similar jobs around here would as you've seen result in me taking a 50% pay cut, and because I work remote 80% of the week, spending more time commuting into the office.

The difference is so high inside of London compared to an hours train away that it's not even on my radar any more to even look for jobs in the UK outside of London. I sat a jump of 2/3rds in salary when moving to london.

There are some higher paying roles outside of London. Farnborough has defence companies, Swindon has Nationwide, Bath/Bristol has DVSA, Edinburgh has RBS, but yeah, you're generally right. Live in London, if someone offers you "fuck you" money to go elsewhere, you can always rent it out. :)

> in Brighton £38k

Interesting. This is roughly the amount they're offering contractors in Poland.

Everywhere in Poland on top of that, because it's considered a single region, so you could possibly live in a small town where rent is ~£250 and other expenses proportional to that.

What if the person you want to hire likes crashing Lamborghinis and doesn’t want to stop? Living in the middle of SF is a luxury good.

Then don't hire them. If there were sufficient alternatives to hiring SF engineers, nobody would hire them. But they do, which suggest there aren't sufficient alternatives. Hiring is hard.

If you gave Gitlab a PO Box address in the Bay Area as your address, wouldn't they have to pay you Bay Area salaries without you paying Bay Area rent?

If not a PO Box, some other proxy by which you aren't genuinely living there. Maybe just a short-term roommate lease situation?

If you lie to your company saying you live in SF when you live in Asia your going to have a hard time explaining why your never available during the middle of the day, what are you going to do when your asked to travel to somewhere in the continental US and you try and submit a travel expense for a flight from asia, etc...

Throw away account, believe it or not, I've been doing exactly that for the past 3 years - operating a consulting business out of the Bay Area (virtual office) while actually living in Thailand/India/Kenya, etc. I'm always available and working till 7pm PST no matter where I am (Google Fi/Google Voice numbers). It's actually pretty easy to pull off.

It's almost a no brainer to me. If I can charge 3-4x more for the same skills that I have, why not. I'm not gonna take a huge pay cut just because my location changed. And there's almost no explaining involved.

At times when you can't go somewhere physically, sometimes you can tell your clients you're traveling this month. If something is important, you can take a flight. The amount that you're saving, the flight costs are negligible.

How can I reach you? I have a few questions. (ps. you can reach me i have my email in my profile. Thank you).

I've been thinking of doing something similar, but I need to build up a client base first. Did you build that up before you left, or did you do it while remote? Also, do you have any tips for building up a client base?

Then don't submit a travel expense for a flight from Asia? In fact, if you're working remote, you should probably pay your own way for travel if it's not a core part of your job, and if it is, you should probably live somewhere convenient for traveling to the places you typically go.

Also, what happens to a full-time remote worker who decides to move? If they tell their employer that they moved from SF to somewhere far cheaper, should that employer dock their pay? What if they're just temporarily moving (e.g. living abroad for a year, but returning afterward)? If you're going to work remote, it may make sense to rent for a month or so in SF to be present for interviews and then move back to wherever you want to live, which would essentially mean you "live" in SF for that period, so it wouldn't be lying.

Tell them you have multiple residences and declare one as your primary.

I know that shit works because rich people do it for taxes all the time.

> I'm not really sure what is the middle ground here.

The middle ground is irrelevant. The market price will be determined by supply, demand, and the differences in productivity and other factors of remote programmers. They’ll meet somewhere in the middle between the current local labour market model and one where collaboration software and practices are so perfect that there’s only one market for programmers, the global one. But we don’t know where yet.

Right. If you want to hire people who live in the bay area, you should pay enough for them to at least live sustainably there.

If that's too expensive, adjust your recruiting or hiring strategy. Maybe recruit bay area programmers that realize their current salary isn't sustainable since they need to plan for illness, retirement, saving up to launch an idea, etc.

There are some interesting arbitrage opportunities in that data[0]. Even if the average for a province is $X, there will be plenty of cheaper towns in it.

[0] https://gitlab.com/gitlab-com/www-gitlab-com/blob/master/dat...

Ugh that's awful price disparity as well. It's pretty expensive here in the UK.

You should always pay me for what I can do not where I live.

> but what if the person you want to hire likes living in the middle of SF

I think, the idea, is that in SF he'll have no problems finding jobs. They are looking remote because of shortage in SF. I mean according to them.

> I've seen a lot of remote startups offering salaries around $100k USD, independent of location.

As long as it's within US?

Is there a fair way to adjust based on living costs - within certain bounds - that isn't based on rent index, or at least weighted in favour of lower cost areas? Paying Bay Area salaries for every employee just isn't feasible for most startups.

Paying Bay Area salaries for every employee just isn't feasible for most startups.

How does that explain the large number of Bay Area, on-site-only startups?

It probably implies that only certain types of start ups are well suited there. E.g well funded VC startups that are looking to go big or go bust where paying lots for talent is worth if for access to many more employees and VCs.

On-site-only is a lot more productive, we just like to pretend otherwise because we wish it wasn't?

As evidenced by?

I'm offering it as a possible explanation for why onsite-only Bay Area startups could be a success but remote startups not be able to afford Bay Area salaries.

I'm talking about startups that are outside the Bay Area, and outside the US.

Yes, you'd use something like the OECD's price level index: https://data.oecd.org/price/price-level-indices.htm

None of these are perfect, you're never going to get two truly comparable locations when accounting for mortage/rent, groceries, cost of transport, cost of consumer products etc., but it's a whole lot better than mainly looking at one variable (rent).

No.

The only fair way to adjust is based on value to the company, and what the potential employee is willing to accept. It isn't reasonable to use pay to remove the financial advantages of a candidate's choice of location, and then claim "you can now hire the best people on the planet in any particular function" as the original link does. If someone is among the best people on the planet, they'll likely be paid considerably more than the San Francisco average without regard to what their costs are.

One of the touted benefits of working remotely, for those who can, is exactly the ability to trade off the advantages and disadvantages of living in places with varying characteristics, and it's unsettling to have a company which claims to support and encourage remote work also be upfront about actively working against remote workers' ability to make these choices.

Yeah. "Paid to a standard of living" seems unfair for employees in that it dictates the employee's spending. (e.g. someone saving half of their salary in high-cost area saves more than someone saving half in a low-cost area, for the same 'standard of living').

AFAICT, the flipside is that "flat global pay" is that then the company can't offer as compelling an offer to those in expensive areas. (i.e. if everyone paid a flat fee and you were stuck in an expensive city, then you would be penalised when looking for remote work).

It's either flat fee or adjust for cost-of-living based on a person's location. Flat fee is fairer, but it cuts out talent from the most expensive places.

> Is there a fair way to adjust based on living costs

Not for work where the employer isn't specifying a location constraint. For on-site work, while one can debate the exact ideal formula, location adjustments within a firm based on comprehensive cost-of-living makes quite a lot of sense.