[lunarhustler]

Except the market ain't going to bear it, not for a long time anyway.

If I am a CEO of a remote-first company and it truly doesn't matter for me where the employees are located it makes no sense to overpay for labor in high cost of living area.

So if there's a company A that pays $X in high COL area, and $X/3 in a low COL area. And then there's a company B that pays $X/2 everywhere. Then people from the low COL area would go to the company B, and people from the high COL area would go to the company A. As a result, company B gets the same results 2 times cheaper.

Repeat this process enough times and the salaries will be equalized. Of course it's not immediate, there are companies rigidly set in their ways; there are people who won't move no matter what; there is limited supply of both companies and workers; etc, etc. But eventually the market forces will do their thing.

[cj]

I run a remote-first company, and this is basically how we do it.

We don't give people different offers based on where they say they live.

Rather, we have a salary range for a job, and we look for people who are attracted by that salary range. This usually means people in SF, NYC, and other high COL cities disqualify themselves, so we end up hiring many people outside of tech hubs.

In other words, if you simply stop hiring in the top 20% COL cities, you can hire talent at significantly less salary ranges simply because we're not competing with Google, Amazon, etc in Silicon Valley or NYC.

Which allows us to hire a greater quantity of people. E.g. 2 engineers at $150k instead of 1 engineer at $300k.

But the key to this is not making a salary decision based on location. Instead, just set a salary range and you'll find what parts of the country people are willing to work at that range.

[Jcampuzano2]

One thing I don't like that is a bit specific to my own situation about most companies that aren't really remote first, but switched to it due to circumstance is that to them remote means - "you will literally always be located at XYZ address and do all your work from there".

I have my home address, but I actually only spend maybe 4-6 months of the year physically located there. This kind of pisses off most employers due to the tax situation as well as them treating it as if I'm gaming the system by being physically located for much of the year in lower cost of living areas (though sometimes I've even gone to higher cost of living areas for months at a tiem).

A situation like this where the salary doesn't really depend on location so it wouldn't be treated like I'm actively trying to game anything would actually be preferred in my situation, and to many others I know as well.

[cj]

> A situation like this where the salary doesn't really depend on location so it wouldn't be treated like I'm actively trying to game anything would actually be preferred in my situation, and to many others I know as well.

Exactly. We've had multiple employees move to different cities/states during their tenure. That wasn't a problem with us (from an employer perspective) and there was also no expectation that salary would be adjusted in response to a move, since location wasn't factored into the original offer in the first place.

[dorwi]

"As a result, company B gets the same results 2 times cheaper" - that's just an assumption. If I turn it around, it sounds - "people on average in high COL area do the same work two times faster than in low COL area".

[bcrosby95]

If you're paid $300k/year it's probably some kinda fancy faang job. How productive you are in that environment doesn't necessarily translate into productivity in others. And vice versa.

Beyond that, highest paid people I know aren't paid well because they're 5x as productive, they're paid well because they solve really hard problems - the types of problems you don't run into at most companies.

To use an analogy: neurosurgeons aren't expensive because they're really good at "doctoring". Even if you had all the $$$ in the world you wouldn't consult one for a sprained ankle.

[Kbelicius]

What assumption is being made? What are you turning around?

[danaris]

The assumption they're claiming lunarhustler made is that engineers in Silicon Valley and engineers in (say) Utica, NY work at approximately the same speed and quality.

The assumption dorwi's asking you to make is that moving to Silicon Valley somehow makes you work twice as fast, or that only engineers who work twice as fast live there.

Basically, lunarhustler is making the assumption that humans who can program end up at roughly the same quality no matter where they live or how much you pay them, while dorwi is making the assumption that how much you are paid is directly related to your productive output.

[wooger]

There are reasons to want to live in a high COL area that attract people to live there regardless of job prospects alone. If you want to hire young smart people who're into culture and nightlife and not having to drive everywhere, the best will be in expensive cities.

[lunarhustler]

There are places in e.g. Europe where a young smart person can live like a king on their American tech salary, while still putting off most of it into savings... I assure you the culture and nightlife aren't bad there either.

[RestlessMind]

May I ask how big your company is? And how many senior (as in, actual VPs, Directors or Architect level) employees you have? In my experience, I found all these candidates to be present in HCOL areas and the real good ones had plenty of options paying HCOL comp.

For run of the mill junior-ish employees who are treated as disposable cogs by my company, your strategy worked effectively. So we ended up with junior employees in LCOL or foreign countries (mostly Canada and Mexico) and senior levels in SFBA / NYC.

[bsenftner]

> But eventually the market forces will do their thing.

After you're necessity for that market equalization is long gone.

We're in a situation where the wealth class can literally wait it out for more than a generation for market conditions they prefer to normalize. The Market is manipulated and owned, and not by us. The tipping point is past, and the majority of society has yet to realize, our only hope at this point probably requires violence and capital destruction, sadly.

[lunarhustler]

> We're in a situation where the wealth class can literally wait it out for more than a generation for market conditions they prefer to normalize.

It might be there are people who are able and willing to burn money for a long time. Sure as hell it doesn't stop me the startup founder to set whatever salary ranges I believe are efficient.

[eru]

Huh? What's your evidence for these kinds of claims?

And who is 'us' in that comment?

[bsenftner]

Anyone not within the circle of a family with generation spanning wealth.

[eru]

Not quite sure what you mean. Normal people in the western world are richer are better off than ever before. The same goes for people in South Korea or Singapore, countries which have recently joined the rich world.

Seems to be all going pretty well.

[danaris]

Two things can be true at the same time: both

"Normal people in the western world are better off than they were at any/nearly any given time in the past."

and

"There is a staggering amount of wealth inequality in the western world right now, and there are very concerning signs about what it is doing to our politics, economy, and culture."

[eru]

Global inequality has been going down at a tremendous rate over the last few decades. (Mostly by China and to a lesser extent India going from dirt poor to middle income.)

Not sure what you mean 'what it is doing to our politics, economy, and culture.'? All those are doing ok as far as I can tell. At least not worse than in the past.

[wooger]

Better off how?

Can't afford to buy a house or start a family at anything like the rate 50 years ago that's for sure.

[eru]

The kind of low quality houses you could buy 50 years ago are (perhaps sadly?) outlawed today in most places.

You can always afford to start a family. The question is what trade-offs you want to make.

People used to do with less.

[toyg]

That doesn't disagree with what I said. With remote, employers get leverage over workers and they will use it to push down their salaries. HCOL workers will eventually have to bear the new levels.

There is no real equilibrium in markets, only forces that push constantly in one direction (maximizing profits, lowering costs, increasing capital efficiency).

[boringg]

Strategy only works for so long and for small companies. Then you will have to adjust. Salaries and the employment market are highly dynamic and competitive. No strategy works forever.