The value of your labor doesn’t change based on where you are. The ability to manipulate ‘market value’ based on location is a power derived from the perception that we need companies more than they need us. At least in tech, that’s not true.
More than they need us*
It does though, the value of your labor in X region is simply based on the marginal ability of the Nth dollar to compel you to do labor Y over labor Z. A barista in NY makes more than a barista in Idaho because if you paid the NY barista any less they would do something else. This is literally the source of specialization of labor in certain global markets.
Location based salary is more painful in India. US new grads are paid more than Senior Software Engineer in India. In which world this is fair?
To purchase an iPhone, I need to spend 1 month of salary. Which is more costly in India than in US. Then why us low?
Not only India, anywhere in the world
Corporations have to answer to their shareholders and minimize their expenses, which includes engineer salaries. Twenty years ago, software engineering salaries were comparable to other professions, it's only when Google started paying software engineers much higher salaries that compensation started trending up. Nowadays, they'll pay the smallest amount that will get them the candidates they need, so if you're working remotely and they can get away with paying less, they will.
"Nowadays they will pay the smallest amount they can get away with" - RIP so true
Labour market 101
Be careful what you wish for. If you do away with location-based salaries, then Silicon Valley salaries are coming down, not the other way around.
It’ll be a race to the bottom lol
Why down? Cause of supply? FANG companies still can’t fill all their roles.
At least within the US, many of a person’s future expenses could be the same for a lower cost area (e.g kids’ college, medical costs, future retirement plan in Florida etc) - and the person would need to save for them now. So not sure if there’s a better way than location based salary, but I definitely feel sometimes people forget to consider that a salary is for a lot more than paying today’s rent and food
Instead of salaries, companies should offer house, car, internet, groceries, etc. wherever the employee is. This way, everyone will drive almost the same cars, will eat the equal quality food, will have similar house to live, etc. /s (Edit: I wasn't sure people won't get the sarcasm. The whole point was to just show why differentiating based on location is the right thing to do. What happens when one wants equality. As you can see, it leads to a lot more complexity and hence employers offer cash and let you handle your expenses.)
Higher salaries go to areas with higher taxes which only increase the need more money. It’s a bad cycle that leads to greed from local governments
I wonder how many of those claiming salaries based on location are unfair requested for a cost of living adjustment when they first moved to Bay Area from any other part of the country 🤷♂️ I negotiated a 35% cost of living adjustment on top of the increment offered when I moved back to bay area from seattle about a decade back. I am sure many of us did that back in the day. But now when moving in the opposite direction it just suddenly becomes unfair.
Uh can anyone explain why we get a significant pay decrease by going to London, Vancouver or Toronto ? Pretty sure housing and general cost of living is pretty high.
@Facebook because your pay isn’t based directly on cost of living or value. It’s based on market rate for your skillset for your area, which everyone on this thread is missing. Canada/UK are incredibly tax heavy nations across the board (income, capital gain, corporate tax rates). This means the average company operating in those regions can’t pay nearly what the average company in the U.S. can. It’s also not easy and straightforward for citizens their to move to US (though a ton of people try). ^ That means when Facebook opens up an office in those regions, they pay a lot lower than they do in SF - because baseline market rates are a lot lower.
Will you pay the same for every good and service - a plumber, daycare, teacher salaries, etc irrespective of location? They are providing the same service, right?
Great point. Their skills should be valued the same everywhere but the cleaning lady or the plumber they hire shouldn’t be quoting Bay Area prices in their LCOL area 🤣
And pay the same for real estate? It’s the same amount of land right /s It’s remarkable how people don’t understand supply and demand.
no, why am i paid less when i’m working in the same team as someone in the Bay just because i live in Texas? Before you raise your pitchforks, consider the pay band based on location is only helping the employers. We as employees should get more money. These ceos are spending millions on yachts and blow every weekend.
No pitchforks allowed in this poll. Your perspective is valid. Thank you for sharing it.
If this is truly the case, then you should move to the Bay. Or all our jobs should go to eastern Europe right? Or India? Cuz it's the same job?!?! The reality is the jobs are where the companies need them to be. Where the business is and where the best engineers are. Don't be salty because you aren't one of them. Companies aren't really stupid enough to pay more for the same skillset.