| Exactly, not sure why the article doesn't address this. From the employer perspective, the strategy toward compensation has NEVER been "equal pay for equal work". I understand why that is intuitively fair to people, but it's not rooted in reality. The strategy is "I want to pay as much as other employers in the area". That is, if you get a job in the same area and your pay drops 40-50%, then that's a BUG from Google's perspective. They were paying you too much. They want to pay you an amount so your pay will drop 0% or 10% when you get another job. Or conversely, if someone local is going to Google, they should get 0-10% more, not a 40-50% increase. ----- As you mention, a corollary of this is that if most programmers start working remotely AND most companies offer remote jobs, then Google will be forced to adapt. Basically if all companies start doing what Reddit does, then Google will have to do that too to stay competitive. It's a market-based system. There are many instances where markets determining prices produces outcomes we view as unfair. Though I guess you can argue that it shouldn't be purely market-based and it should take into account "company loyalty". As the article mentions, employees can also "quit in place", which changes the calculus a bit. |
https://www.quora.com/Do-companies-like-Microsoft-Google-Ama...
Companies like the ones you've listed typically base salaries on "Cost of Labor" (for a given role in a given market), not "Cost of Living" (i.e. the price of a bucket of goods in a market) .
So that is exactly the misunderstanding here. People think the goal is "equal pay for equal work", or they think it's "cost of living". But neither of those is true -- it's a "cost of labor" adjustment.