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The "why don't they just pay everyone SV salaries everywhere" argument is obviously from people who never ran businesses and are just disguisedly wishing they made more money

While probably true, this kind of argument goes both ways.

Recent events have proved, if there was any doubt left, that a lot of people can work perfectly well from home and greatly value doing so, and that both desire and performance are highly dependent on the individual. Some businesses are going to have to get used to the idea that some of the good people they'd like to hire simply won't be willing to make long, inconvenient journeys to work every day any more or to live in expensive locations to avoid them. If they decide not to offer those people competitive compensation by national standards, they may increasingly find that others will, having themselves located any centralised facilities in more economic areas.

Pricing too much by location for highly remote-capable staff is a short-sighted policy anyway. It is surely a matter of time before environmental concerns put pressure on governments to discourage unnecessary travel. That probably means higher costs for travellers one way or another, which is only going to widen the gap in favour of remote working.

>> The "why don't they just pay everyone SV salaries everywhere" argument is obviously from people who never ran businesses and are just disguisedly wishing they made more money: saving money on salaries is done for the same reason companies do tax-related shenanigans.

Salaries like anything are market based prices. Why are salaries different in SV over MidWest, is same reason a BigMac in SV costs more than in the MidWest..

WFH opens up the pool of employee's to a much larger scale, the more people that can do the same job the lower the wage for that job will be

People however do not want to look at labor as marketable good like a widget, they want to view labor as something else, its not.

> The "why don't they just pay everyone SV salaries everywhere" argument is obviously from people

Or just maybe you are mischaracterizing an argument from people that take the notion of "equal pay for equal work" to heart and protested even against offshoring for similar reasons and against tax related shananigans that just transfer the social burdens of infrastructure onto income tax paying citizens.

The non-strawman argument is "equal pay for equal work", not "SV pay for everyone".

With pay from different locations, there is an argument to be made for varying salaries when the working conditions related to the office presence and the corresponding project involvements differ and one can argue it isn't equal work. With working from home, there can be variation in project involvement due to scheduling which again might be unequal work, but that would be more tied to which hours of the day are on the clock, if the hours worked are the same then an employer paying an employee less for living in a different city when all other working conditions are the same is merely the employer unfairly (ab)using their more powerful bargaining position to capture economic gains that should belong to the employee for making the choice to live in a cheaper area. So when you talk about fairness one can talk about two classes of employees (in office vs working from home) and then salaries tied to hours worked and the rest is discrimination.

There are arguments to be made for allowing employers to do this, since perhaps as a matter of public policy it is better for people to concentrate in cities or for forbidding it for alternate reasons. But the public policy question wouldn't change the fact that employers are choosing to pay people based on criteria not at all related to work they do. There is still room in "equal pay for equal work" to tie office presence to a higher salary, if it is genuinely more valuable, just put the dollar value on that.

> The non-strawman argument is "equal pay for equal work"

But that's also a logically problematic notion in the sense that it's a complete utopia given how our world currently operates (i.e. there's a reason why most of your clothes are made in China or thereabouts) and, on top of that, it's a self-defeating idea. The logical conclusion of that line of thinking - an ad absurdum, if you ask me - is that everyone gets paid the same for similar work, and therefore also have to accept 2M house prices, including the folks making your socks in Malaysia. In reality, though, you don't get to have a cake and eat it too, that's literally the basis of how inflation works (and why Austin folks resent Californians for example).

You do raise a good point about strictly WFH jobs vs locality-dependent jobs (e.g. a McDonalds worker has to be physically present at a location) and I think it ties a bit into why management is often reluctant to go forward w/ WFH policies: management is largely about multiplicative effects, and there can be very tangible differences in in-office vs WFH depending on timezones (in fact, I know a consulting company that very successfully convinced their clients that offshoring is more expensive than a north american workforce due to time lost on back and forth communication with India timezones)

> several employers other than Google have policies to adjust pay based on location

For example, the federal government. There's a set pay scale for the country, with "locality pay" added in a number of cities/regions.

A few years ago, I know civilians who were working for the Navy in Washington, DC and their jobs were moved to Norfolk, VA. Their jobs did not change; but, due to locality pay, it was a 10% pay cut. (Yes, a number of people left and did not move.)

> "If I take a 10% cut, I'm leaving" is a perfectly reasonable thing to say in such a negotiation

If you're going to say this in a negotiation, you have to be ready for the counterparty to say "OK".

Of course you do. You could also not raise a fuss in the first place and just move somewhere that isn't 2 hours away from your place of work, like the majority of society does. Or argue that the policy shouldn't apply to you because you're still paying the same state tax and it makes no difference for the company in terms of taxation logistics. Or move teams to one with a more reasonable boss. Or say nothing and do the change-jobs-and-come-back-later-at-L(x+1) thing. Etc. It's not black and white.

Yeah, ultimatums kinda suck as a negotiation tool for employees. High risk, low reward most of the time.

I would replace it with explaining that the pay cut makes you unhappy and/or makes the position less appealing. Make it an assessment of the position and the pay, but don't talk about actions that will come from it (like leaving or job searching). Telling them what you'll do is like obviously telegraphing your next move in a fight.

Negotiation is a tricky thing. You don't want to limit your options too early because that might prevent good outcomes. But at some point, if the other guy is being silly and you know you have viable alternative roles as your BATNA, cutting to the chase just saves everyone time and makes sure they understand that something is a deal-breaker.