If a part of the job is coordinating with people in a specific timezone who are ready to pay for availability during their own timezone then yes. We don't consider it abnormal that a waiter in Manhattan gets paid more than a waiter doing the same job in Prague. A more interesting question would be to ask how can we overcome these coordination hurdles between people in different regions and cultures in tech companies? It's a challenge for sure.
I think his argument is that in general their results would be worse because of the timezone and culture difference, thus earning less on average. I think there might be an element of truth there, but probably not enough to explain the entire difference, only a small part of it.
It's not that Indian culture somehow isn't as good. It's that there's sufficient supply there to fill all the positions at lower pay. If the exact same people manage to get a visa and transfer to SF, they will instantly start getting paid $100,000s more. Likewise, If Google moves an entire org, doing all the exact same work, from NYC to Raleigh, NC, it will cut everyone's pay by 25%.
I personally am moving from completely remote to completely remote but from somewhere else, specifically because my company pays more than the difference in CoL so it's "free" for me. From the company's point of view, I just became more expensive for no reason and at no gain to them, but that's their policy so ¯\_(ツ)_/¯
Time zones past a certain point perhaps. I routinely deal with a 5-6 hour spread (eastern US to Europe) and it works pretty well. No particular audio issues either--at least any more than video calls generally. I would agree that more than about 6 hours starts getting harder unless the people in one of the zones really shift their workday.
Not the OP, but I think you bring up a great point and just wanted to chime in...
IMO cultural compatibility is valuable and worth paying a premium for, both within an employer's team, between an employer and their customers or their marketers, etc.
The support culture can be vastly different between cultures, as can design sense, time prioritization, team dynamics, etc. It's hard to work effectively with someone who barely speaks your language, doesn't get your jokes, doesn't like the same food, isn't used to communicating the same way -- whether in body language or slang or powerpoints, etc. (And it goes both ways -- I'm not just talking about American companies offshoring, but also Americans trying to work overseas, or people moving to/from China for opportunities, etc.)
But in an actually free market, where capital, labor, and customers are all free to pick and choose as they please, I doubt the difference would be as large as it is now, like 5x-10x difference for the same work just based on cultural compatibility. I've met plenty of foreign (to me) people who work harder and are just plain better at my job than I am, but get paid less because of the circumstances of their birth.
In a hypothetical world where people were free to work and live where they please, I don't know what an appropriate value of that "cultural fit premium" should be, maybe 20-30%? Certainly not orders of magnitude. But we don't have that hypothetical world, and our protectionist borders seem to be getting more defined by the day, not more blurred, as the West goes through a cultural backlash against globalization.
The dark side of "equal pay for equal work" is that Americans often enjoy higher pay and a higher quality of life for less work, sometimes MUCH less work, compared to their counterparts in international tech sweat-shops. We have hard-won labor protections that took decades of organizing to achieve, and even then there are horror stories of abuse and burnout.
Ideally we'd be paying all workers the highest wages and letting them move where they please, but doing so would also cause hyperinflation across the world and in turn drive down purchasing power. And cause a horrifying housing crunch in all the desirable areas of the world. The whole system is rigged such that there can ever only be a small % of comfortable people, or else it all falls apart =/
Other options are to pay the lowest common denominator (and lose all your highest paid staff), just don't outsource, or apply a cost of living adjustment, etc. None are perfect or easy solutions.
But salary transparency is a great start, especially while there are still people doing the same job in the same OFFICE, sometimes on the same team, who get paid differently. It at least gets the conversation going so we can start thinking about solutions...