[PragmaticPulp]

> At the end of the day you pay X for job Y.

Common misconception but it’s not how markets work.

You pay whatever it takes to get candidates onboard, but you ideally don’t pay more than necessary. You definitely don’t pay everyone more just because one of your employees lives in SF.

This is more intuitive if you think of any other market you might personally operate in. Would you expect your local car mechanic to charge you twice as much as the other local shops just because they also have a location in San Francisco? No, you’d just go to the next mechanic who charged local rates. You aren’t interested in paying more than necessary and neither is your employer. It’s not nefarious, it’s just rational acting.

[perth]

The difference is, most tech companies aren’t selling the product/service exclusively in the region that the worker is working in, so the cost of the product/service, say for example Amazon prime, is the same nationwide despite the differences in cost of living, but the employees are paid regionally.

Basically: most tech companies don’t adjust the price of their product for the region they are selling it in, but adjust the salary of the people making the product based on the region they live in.

[PragmaticPulp]

> so the cost of the product/service, say for example Amazon prime, is the same nationwide

Correct, but you’re forgetting that labor is also one of the product/service costs for a company. They treat it like a market, just as you would if you were hiring someone to work on your car or house.

It’s called the labor market because it’s literally a market. Expecting companies to completely disregard the market aspect and just pay the maximum amount for everyone regardless of their actual cost is wishful thinking.