[jbroman]

This is consistent with what major tech companies do today when an employee relocates (or are simply hired in a less pricey region).

Whether or not you agree that employees should be paid differently depending on cost of living where they reside, it isn't new.

[Traster]

What I'm interested in is that it's quite difficult today to find out how much you would be paid when you relocate. You need to jump through a lot of hoops to get the move approved in principle before you find out your new compensation. With this new system it should theoretically be fine to relocate anywhere, so if it is then you'd want to find out how much each area pays before you decide to move. Which means suddenly you know that guy who chose to go live in downtown SF is getting paid 1.4x more than you for the same job. The same is true today obviously, most big offices are in different areas and have different pay scales, but it's generally not as well known by the employees what those scales are.

[AmericanChopper]

This sort of scaling is simply a (rather flimsy) cover for the natural consequences of moving to remote work. If employees in the large metros have to start competing with workers from everywhere else, the salaries are going to start falling. A worker in rural Mississippi is going to expect a much lower salary than an equivalently skilled worker in Palo Alto, and a worker in Manila would expect even less again. Remote work puts significant downward pressure on salaries. This is simply an attempt to offset that. But if you think a hiring manager faced with having to choose between hiring somebody on a big metro salary vs a small rural one is going to be completely uninfluenced, then I’ve got news for you...

[meowtimemania]

honestly as a front end dev, I don’t think what I do is that difficult and I’m overpaid. I feel a little nervous that with remote work I won’t be overpaid in the future

[AmericanChopper]

Jobs aren’t paid according to how difficult they are, they’re paid by supply and demand. Employers want to pay as little as possible, but they have to compete with other companies to hire staff from the finite labor pool. Employees want to be paid as much as possible, but have to compete with each other for the finite number of positions available with employers. Remote work simply means that for any remote position, employees will have more candidates to compete with, which will drive the cost of labor (salaries) down, especially if they’re competing with candidates willing to take a much lower salary due to living in a much cheaper place.

[dragonwriter]

> Remote work simply means that for any remote position, employees will have more candidates to compete with, which will drive the cost of labor (salaries) down,

Remote works also means that for every desirable candidate, employers will have more competing employers to compete with, which will drive prices up.

What it really means is that both sides of the market will be larger and less segmented, meaning (1) there will be less opportunity for localized shortages and surpluses driving radically high or depressed salaries, and (2) the law of one price will be more relevant to labor prices for the jobs where remote work is normalized.

[AmericanChopper]

But you would expect the new one price to favor low cost of living candidates over high cost of living candidates. Especially where candidates in developed countries end up competing with candidates in developing countries. It’s unlikely that a dev shop in Bengaluru is going to start offering remote salaries that would be enticing for a US-based engineer, but the reverse would be completely expected.

[dragonwriter]

> But you would expect the new one price to favor low cost of living candidates over high cost of living candidates.

I'd expect it to provide a greater surplus to lower-expenses candidates, as any common price does. That's not really favoring lower CoL.

> It’s unlikely that a dev shop in Bengaluru is going to start offering remote salaries that would be enticing for a US-based engineer, but the reverse would be completely expected.

Yes, for work that the skills required can easily be sourced anywhere, remote work is going to lead to natural price level much lower than the prices in the highest price segment of geographical segregate markets.

OTOH, where skills demanded are rare and not widely available, normalization of remote work just means its easier for more employers to join the bidding on that restricted set of employees with low transaction costs. So, for commodity labor it drives wages down to the lowest common denominator; for the most elite labor it drives wages up.

Like neoliberals free trade itself, it exacerbates inequalities.