[klochner]

That scenario would only be "market rate" if the market put a higher price (market price) on luxury-car-driving engineers.

In that case it would likely not seem absurd because presumably there would be some extra inherent value in luxury car drivers (e.g., uber drivers).

[jlarocco]

> That scenario would only be "market rate" if the market put a higher price (market price) on luxury-car-driving engineers.

That's the point actually. Driving a luxury car is equally as irrelevant as location. There really isn't a good reason for a company to reward employees for how those employees spend money outside of work.

[hueving]

But the location isn't irrelevant and that's the entire point that this article blindly misses. The company may not care that their developer is living in Silicon Valley, but there are a lot of companies that do care and will pay high salaries for him/her. Either the company competes and offers a high salary as well, or it just doesn't get to hire developers from Silicon Valley. It's basic supply and demand.

If you're buying a car and it comes with a high power engine that you don't care about, you still have to pay the premium for the engine. You can't pay less because you tell the seller that you won't utilize the extra power. The car has a higher market price because there are people that will pay extra for the high power engine.

[jlarocco]

> But the location isn't irrelevant and that's the entire point that this article blindly misses. The company may not care that their developer is living in Silicon Valley, but there are a lot of companies that do care and will pay high salaries for him/her. Either the company competes and offers a high salary as well, or it just doesn't get to hire developers from Silicon Valley. It's basic supply and demand.

For a company with all remote employees, location is indeed irrelevant. Unless you're claiming there are no developers in the whole rest of the world that would do the job equally well for cheaper, which seems unlikely. Or unless you can back up the claim that developers in certain locations are simply better than ones in other locations, which seems to be what you're implying.

As an anecdotal counter example, I have moved several times in my career, and don't recall it ever affecting my productivity.

> If you're buying a car and it comes with a high power engine that you don't care about, you still have to pay the premium for the engine. You can't pay less because you tell the seller that you won't utilize the extra power. The car has a higher market price because there are people that will pay extra for the high power engine.

I don't see what that example has to do with anything.

[rspeer]

> Either the company competes and offers a high salary as well, or it just doesn't get to hire developers from Silicon Valley. It's basic supply and demand.

This statement is still correct and less loaded if you remove the words "get to".

I have no idea why a fully-remote company would want their developers to live in Silicon Valley so much that they would pay a premium for it. Why even bother being fully-remote then?

[hueving]

The company doesn't want the developer to live in Silicon Valley. The developer already does and that means any company that hires him/her will have to pay that premium because his/her market value is higher.

[mikeash]

The problem with this is that it sends unpleasant signals to the other developers.

If the SV developer's value to the company is the same but they get paid more, then you're saying to all the other developers who work there, "You produce enough value that we could pay you this much, but we don't want to. We prefer to pay you less, simply because we can."

This is, of course, their right, but that sort of thing tends to make people unhappy, and unhappy employees tend to be unproductive, and then gone.

[rspeer]

I'm asking something simpler than that: why would the company pay a Silicon Valley salary at all?

Several people here are taking it as a given that a technology company has to hire some quota of people from the Valley.

[paulddraper]

Yep.

It's like wanting developers to drive a luxury car so much they would pay a premium for luxury car owners.

[hueving]

What aren't you getting? There are tons of companies in Silicon Valley that only hire local developers because they don't believe remote working is as effective. If you want to hire a local developer, those are the companies you compete with.

You try to make it sound ridiculous by changing location with the car they drive, but that is intellectually dishonest because it's not clear remote work is as efficient. There is a reason Google doesn't allow it.

[paulddraper]

Sure, the location has value to some companies. And they'll fight each other tooth and nail.

But to a remote company, it's just as irrelevant as a luxury car. It's an artificial segment of the market to them. They don't need to enter the frenzy. There is a equilibrium of global supply and demand that is lower than SV equlibrium. Replace your SV hires with the others at that price, and save money. Capitalize on your remote work, instead of tossing it aside.

[paulddraper]

The solution in that case is to not get the irrelevant high power engine.

Or, more accurately, not to pay for the high power engine. Choose and pay for the car independent of the irrelevant factor of engine power. If the best value car (from your perspective) happens to be one with a high power engine, then you'll get that one. But you don't pay more for one, especially when your prospective market is broad (the entire world).

[hueving]

So it's simple, you won't be able to hire any developers from silicon Valley. However, with such a shortage of competent developers, companies basically can't afford to ignore more expensive markets.

Just like with the car analogy, if you need to put together a fleet of vehicles immediately, you will have to buy anything that is available, including the one with the bigger engine.

[paulddraper]

"shortage of developers"

That's self-induced due to your treatment of the market. Suppose you'll pay SV devs 170k.

Do you have any idea how easy it would be to replace those spots by offering 160k (regardless of location)? And you'll save money.

Most devs, FYI, do not live in SV area. The market for remote work is huge.

[jrs235]

And, this article/essay is more specifically talking about distributed/remote teams where "the market" is global. Making the rate based on employee spending desires, their cost of housing being influenced by were they (choose) to live, absurd.