[throwawaysea]

It is frustrating and illogical. Why do companies think they can do this to individual workers instead of just trading money for value? Imagine if a company suggested doing this in a B2B contract - it wouldn’t work and it would look absolutely absurd:

“Oh your company is in Backcountry Town, Flyover State? Well we will pay 20% less for your widgets then.”

[throwaways885]

There's two reasons IMO.

The first is that being in-person is valuable to many companies, enough so they're willing to pay a significant premium for it. If you're remote, then you get less.

The second is that it's all about negotiation. Companies by and large have the upper hand here, and would pay much lower wages if they could. FAANGs do not pay 2-300k salaries for fun, but because of the local competition.

Software developers are finally getting a taste of what the average citizen has to deal with compensation-wise, no wonder people are reacting badly.

[aaron-santos]

> The second is that it's all about negotiation. Companies by and large have the upper hand here, and would pay much lower wages if they could.

Employee wages are roughly bounded below by the cost to keep them alive, and roughly bounded above by the profit they produce. As for leveling the playing field between labor employers, there are known strategies for pooling labor's leverage. The gap is in convincing labor that those strategies are a net positive from them. For people who think that when they are hired that they are going into negotiations on equal footing, this is easier said than done.

[tayo42]

Don't we have more competition for employers now though. That's what I don't get. I have a whole world of companies to work remotely at, judging by my inbox alot want me. They will of course have to give me a pay increase to move. this seems logical to me but not to hr departments. Or even morale, is making your employees unhappy worth 30k a year.

[jjav]

> Why do companies think they can do this

They don't think they can, they know they can. So of course they will.

And from the employee side it's not a bad deal either so many people are happy to take it. Sure I wouldn't love a 20% pay cut, but if I can get a 50% reduction in cost of living by taking a 20% pay cut, that's a large raise effectively.

[lordnacho]

But that is what happens via negotiation, isn't it? Just like people in lower cost countries can accept lower pay and sometimes do, there are firms with lower cost bases that can accept lower offers for their widgets and sometimes do so.

Inflexible entities either find someone willing to pay up or they have to find something else to do.

[CleverLikeAnOx]

Outsourcing is an attempt to do exactly that.