[ever1]

'But when asked about this, Mr Libin has a surprising answer: "What if I paid the person in India the same as I pay someone in the US? Well, why not? Right? Like, why do I care where you live? I just care about how productive you are."'

BS, you can have 2x more skilled engineers for half the price and same quality, logic demands that you do not pay an Indian dev (which will still have greater salary than average in India) the same as US one.

[spamizbad]

Not sure how long that will last tho. If labor supply stays tight, you’re eventually going to have to pay more - unless you form an industry cartel that agrees to geographic pay scales

[csa]

Imho, other than at the very top of the market, there is not a tight labor supply — rather, there is a culture of broken hiring practices.

[dmingod666]

That is so shitty on so many levels.

[bartread]

Sure, but it's also a major reason companies offshore. Take away that incentive and suddenly there's no real reason to offshore (you could easily argue this would be a good thing from the perspective of onshore workers though).

Whilst I do not love the salary disparity between onshore and offshore workers, the issue is complex. For example, one has to wonder what would happen to local economies in Indian regions, and elsewhere, that are dependent on revenue from offshoring were Western companies to simply stop the practice[0]. Also, bear in mind that many offshoring outfits are set up by locals who see an opportunity to offer a service to companies in the US and Europe at substantially lower cost than they'd have to pay in their own regions whilst benefitting both themselves and their employees: i.e., there's some complicity there and it's fundamentally very different from, say, colonial exploitation.

I still don't love it, but I can see the benefits for both sides.

[0] One can take this argument too far of course: viz., child labour in the fashion industry. But the situations of a child stitching trainers and a software developer working for an offshoring provider are so different as to render the argument ad absurdum and disrespectful to both of them.

[dmingod666]

Say someone runs a business - they have a senior guy(s) working in country 'x' that's part of their team... he has access to all their code and company's systems...

How much perverse pleasure do you think is a reasonable amount when they save a few thousand dollars a month, while at the same time publicly raising millions and paying developers junior than him more money... and doing everything in their power to burn more money to get ahead of the competition...

[bartread]

You're framing this in emotional terms, and oversimplifying.

Businesses of all kinds offshore labour: small, medium, large, public, private, sole trader, partnerships, VC funded[0], bootstrapped, profitable, loss making, you name it. They all do it for what, for them, are rational reasons. Often very boring reasons. Offshoring can be the difference between profit and loss, the difference between a business that is sustainable and one that is not. A failed business can't employ anyone, whether onshore or offshore.

Now you can argue about whether a business that isn't sustainable without offshoring should exist at all, but that is straying further off topic than I care to go, and frankly is also another rabbit hole likely to lead to unhelpful oversimplification.

You might like to imagine gleeful scheming and maniacal laughter in the boardroom, but I'd confidently bet that that's almost never what's going on in the vast majority of businesses.

[0] You talk about "publicly raising millions": raising funding is not what the vast majority of businesses spend much time doing, and it's not what most businesses who use offshoring spend much time doing.

[dmingod666]

Agree, it depends on how it's executed. Say you have a business entity in the said country and you operate as a subsidiary or you contract to another company, now you pay local wages as per the market.

This is different from hiring a remote employee to your company where you've advertised a salary range as part of the job description.

[bartread]

> Say you have a business entity in the said country and you operate as a subsidiary or you contract to another company, now you pay local wages as per the market.

In my experience that's almost always how it works because you have to employ people in such a way that you abide by all local laws. I have seen people employed as independent contractors but, and again this varies by country, there are often restrictions around criteria like how long you can do that for. It's also kind of a PITA for the "employee" because it means they might have to do things like sort out their own taxes and healthcare. If you have a legal entity in place you can do that for them. That means you either set up a subsidiary, or you using a local offshoring firm. And this applies regardless of the country.

[michaelt]

Depends - are you "saving a few thousand dollars a month" or are you halving your payroll costs, which in a software business are your only cost of any significance?

[foogazi]

Why is a senior dev taking less money ?

Fo you want to wait for the whole world to change or just have that senior dev make better decisions for himself

[dmingod666]

He wouldn't, and that's why it's a hypothetical.

People that run business know that they need to keep a coherent symmetry on some level in how the team is structured and how they're compensated.

Save money by paying some people on your team less based on where they live.. yea, for those that think it's a good idea, good luck with that..

[asenna]

Also not true on so many levels.

I've had some experience in this and what I've realized is that the really good remote developers in India already know their value and they can demand US level salaries for their time.

Yes, it's still not as many and you can still find a lot of good developers for relatively (relative to US) low pay, but the trend is clearly changing.

[drorco]

There's truth to that, a lot of it depends on that developer's language skills and business network.

If you're a developer in the Ukraine with great English and reasonable business skills, you should be able to land a pretty good dev job with a global company.

Another, just as good dev in the Ukraine that only knows Russian/Ukrainian, will have much harder time and will likely be limited to working with just local companies, significantly limited with options.

[medvezhenok]

It's also about leverage and options. I'm familiar with the software dev world and the circus world and am a professional in both - and I've been on circus contracts where I do practically the same exact job as someone from the Philippines (on the same exact show) and yet get paid 2-3x as much. It's price discrimination based solely on nationality and your alternative options, and I've seen it in person. In fact - I am a dual citizen, native to both cultures (moved at a very young age); if I applied for a contract using my U.S. passport and my foreign passport, I would get two very different offers in terms of compensation, for doing the exact same job.

The people spouting "it's all about how much value you produce" are so naïve and ignorant of their privileges / market realities that it hurts.

With devs the compensations will match only when the good foreign developers have just as many alternatives as the good U.S. developers (or at least close to parity - exact parity will never happen due to jobs that simply can't be offshored - contracts with government agencies, for example)

[dmingod666]

This is totally on point, it's true when you get people in as contractors or outsource the work.

But, if you onboard people into your startup I don't think most people would consider it a wise strategy to underpay certain team members that are part of a distributed team based on where they live..