[NeverFade]

It's incredibly easy to compete with "top paying" companies once you offer remote work, due to huge gaps in taxation and cost-of-living.

Let's do the math:

$400k salary in SFBay is $238k net. $300k in any state that doesn't have an income tax (like Texas, Florida, Washington) is $211k net.

Factor in cost-of-living differences, and as an employee, I'd be much better off earning $300k remotely than $400k in SFBay. From an employer's perspective, that means I can offer 25% lower pay and be more than competitive with top paying companies in my field - if I offer a remote option.

This gap will only increase, as states are constantly planning ways to squeeze more taxes out of their major tech hubs: https://www.forbes.com/sites/patrickgleason/2021/12/31/calif...

I therefore believe these economics will drive remote work adoption.

[Plasmoid2000ad]

So that's the catch though.

A $400k wage in SFBay for Microsoft (which I've never heard of for a regular position) won't just translate to anywhere else in the world. When starting salary in SF for Microsoft new college hire might be $120k+, in the UK it's £40k.

I realize you are specifcally talking about relocating to work remotely only within the US, but what I'm getting is that today Microsoft pays wildly differently based on location, and proposes to continue to pay wildly differently based on location with people relocating to work remotely.

I don't know if there will some special exception for United States, but the poster I replied to specifically brought up International.

Will Microsoft pay 1:1 for SF employee relocating to Texas while paying a UK employee 1/4 the wage? If so, why... it doesn't make good business sense.

[petercooper]

I am more than ready for my thoughts to be considered economically naïve, but I wonder if it's to do with the ability for labor to move?

In the US it is easy (from a legal POV) to move between California and Texas or vice versa so an American employee would probably move to California if a much larger salary depended upon it. If an employer doesn't really care if someone is in any particular location within the US, they may nonetheless feel happy paying what they valued the employee at if they did force them to move to California, say. Of course, they may also attempt to pay less, but that's a risky strategy since the employee could just as easily then request to move to the expensive location.

The UK worker earning 1/4 the wage does not have this freedom. Very few UK workers can move to the US (or any other economy than Ireland) and so the market rate for developers in the UK is very specific to the UK. Only a fraction of the best developers who both want to leave and be able to leave. There's a certain local demand and supply and the salary has found its natural resting point, protected by a moat of visas and regulations.

[conanbatt]

By the same process, you can also hire a 15 year of experience software engineer from europe or south america for 80k a year, and doing it as a contractor would also mean no payroll taxes.

In the remote game, people living in the US have a formidable economic foe.

But there is a reason why companies haven't done this massively before, both for international remote and US remote. Very few companies pre-Covid were fully remote, and it might just stay that way.

[NeverFade]

How many software engineers with 15 years of experience, perfect English, strong up-to-date skills, and ability to work seamlessly with an American team, do you think exist in South America or Europe (very different timezone)?

If it was so easy to reduce payroll cost (the biggest cost in the budget of all tech companies) then it would have been done years ago, COVID or no COVID.

[conanbatt]

I don't think you know how many non-15 YOE, non perfect english, non up-to-date skills work poorly with an American team at FAANG.

[nthj]

B2B customers generally have it spelled into the contracts that engineers outside of the US may not access customer data. The value of an engineer who can remediate a customer problem end-to-end for a thousand $500K ARR contracts is far greater than saving $200K/year on salary.

[conanbatt]

What's the difference between an immigrant working for FAANG today remotely from the US or from another country?