[dvtrn]

It does feel quite bizzaro doesn’t it? The manager here says

Happy to let you do it, but know that the market rate for your skills there is X, which means an adjustment in salary for a voluntary move.

my question is: in this hypothetical, did my skills somehow lose monetary value to the company because I left the west coast and bought a house in Indiana? What’s the calculation on that one? Let’s talk numbers.

I’d love to sit down to coffee with a hiring budget manager one day and get into the weeds on CoL against present value and just do all of the math until the cafe closes or one of us has to take the first coffee induced “bio break”.

Or at least, this is how it would go if my company tried to sell me on this. Hell, I might even be amenable to the pay cut if the company was otherwise doing right by our relationship as employer and employee and I felt sufficiently invested in continuing that relationship, but we’re going to get real mechanical and be VERY thorough about it.

[dogman144]

I mean CoL is a thing. There are some talent asymmetries in DevOps and InfoSec, that could command high salaries/remote work. Remote work in security vs. salaries support this.

But for your run of the mil developer -> senior developer, a large chunk of that $150k Bay Area pay for non-FAANG is COLA, no way around it.

[wtetzner]

> my question is: in this hypothetical, did my skills somehow lose monetary value to the company because I left the west coast and bought a house in Indiana? What’s the calculation on that one? Let’s talk numbers.

It doesn't have anything to do with your skills. It's just that they believe they can replace you in Indiana with a lower salary.

I'm not saying it makes a lot of sense, just that they're probably thinking about it in that way.

[aaronblohowiak]

Or that there is less demand for those skills in Indiana so the market for those skills in Indiana pays less than the market for those skills in a separate location. This raises the question of if "remote" is its own "virtual location" in terms of market. Unfortunately, there is not yet enough remote work for there to be an established "remote" market distinction.

For people where there is only a handful of people with those skills in the world, they command ny/sf pay wherever they live.

[dvtrn]

This is an interesting take. I am a remote worker (technically in Chicago), but my employer is headquartered elsewhere. We have offices in Chicago. But I live in Indiana.

What's my 'demand market', as it were? Is it Cali where my parent company lives? Is it Chicago where the subsidiary division I support operates? Or is it Indy?

How does one negotiate salary taking in all that when negotiating a permanent full remote transition?

(This is just for the sake of the hypothetical, I’m very satisfied with my current actual arrangement, but we’ve crossed into a new working world and consider me a career “prepper” or something)

[aaronblohowiak]

i think there are reasonable arguments for each permutation of answers!

Ultimately, every negotiation comes down to BATNA (best alternative to negotiated agreement.) You have to demand from the company you think can/will pay the most the amount of compensation you are confident (but perhaps not sure) that you can get from the second-expected-highest company. This is similar to a Vickery auction -- the winner is the person who is willing to pay the most but they pay the price the second-highest bidder put forward.

In tech labor, the distribution of compensation for the same work is much wider than almost any market participant realizes.

[dvtrn]

To your last point, what would be the closest comparison? Is there even one? I’m sympathetic to the reality that there are lots of variables at play here between work sectors, but do you think a reasonable analogue exists in another industry, and could any actionable models be taken from, iterated upon and applied to tech labor with the effects of equalizing the demand curve and negotiating change through all of this?*

Appreciate the back and forth on this, it’s an interesting set of conditions we’re wading through as a society and I enjoy the thought experiment.

———

* there may be a better way to phrase this question, unable to figure how to put it, at the moment-if you’ll accept the pleasantry as far as the hypothetical will warrant it.

[lotsofpulp]

> I'm not saying it makes a lot of sense,

It makes all the sense. If you can get an apple for $1 from seller A and the same quality apple for $5 from seller B, why would you buy from seller B?

[geodel]

Since we are here, people not only will buy for $1 from seller A they will also show a faux outrage about bad treatment of workers at Seller A.

[TigeriusKirk]

They can now, because top tier companies aren't competing for employees in small town Indiana.

But if this becomes widespread, they will be.

[dvtrn]

Question, to build on your second line there. Does tech hiring becomes more or less competitive if this becomes widespread, in your opinion?

[thorwasdfasdf]

yes, your skills did loose monetary value. That's because it costs X less to hire in that location. The reason people are will to accept X less is because there's a lower COL.

But, the crucial thing to remember is that people's calculation of ROI of compensation to COL is way off. And so they're being under compensated in places like the bay area relative to other areas. Bay area is 50% more than the rest of the country but the COL is x4 to x8 (heck even day care is x4 more in SF than houston).

i've posted this before: https://skilldime.com/blog/see-which-cities-pay-the-highest-...

As you can see, you're way better off anywhere outside the bay area even if the salaries are less.

[itsspring]

> yes, your skills did loose monetary value. That's because it costs X less to hire in that location.

I disagree. Your skills didn’t drop. Your value didn’t drop. They weren’t going to hire anyone in <location> anyways, they’ll hire <local> if you quit. So you’re negotiating between them wasting time & money hiring for someone of equal value locally

[beefalo]

That chart is completely ridiculous. I moved from one of the cities at the top of that list to SF. My pay went up by 3x, my living expenses went up by 4x and my overall savings increased by 3x.

[thorwasdfasdf]

the compensation numbers I put up are averages based on Stackoverflow salary postings.

You're pay going up by x3 could have many reasons. If you're in the early part of your career, that's very much possible but it's not typical of an average SE in SF vs an average SE in the rest of the nation.

[bradleyjg]

> my question is: in this hypothetical, did my skills somehow lose monetary value to the company because I left the west coast and bought a house in Indiana? What’s the calculation on that one? Let’s talk numbers.

It’s a bad idea for a company to pay you significantly more than you could earn at a different job. Because then you’ll never quit even if you’re miserable. You’ll stick around and be a toxic presence.