[keepamovin]

Exactly, man! That's the way it should be done. It's not a company's business to decide how much your life should cost. It's its business to reward you for the value you provide, and that value is not tethered to your location, so neither should be your salary!

[dewey]

This really is one of these things where every employee in a cheap cost of living area will say "Exactly, man!" and people in an expensive area will see it differently because it might cap them lower than what they could get.

I always find that a very naive point of view, of course I would want to earn a US tech salary while living somewhere in the country side, who wouldn't. But I'm also aware that this is not how the world works in reality, there's different tax systems, different expense costs and we don't live in a global one-market world.

I find the strategy of defining different "zones", like most of the remote first / salary transparency companies much more realistic.

[wild_egg]

> of course I would want to earn a US tech salary while living somewhere in the country side

It's not about what you want, it's about knowing your value. If your work is worth a SF salary then that's what you should be getting.

Moving from Idaho to SF doesn't magically make you more productive. The company knows it's still getting more value from you than what you're being paid. They just want to keep more of that value for themselves whenever possible.

Have some respect for yourself and know your worth

[OkayPhysicist]

Being in SF makes the market for your labor more competitive. If I'm living on a ranch in rural Idaho, I would interact with very few people on a given day, and most of them would be the same people I interacted with yesterday. In SF, I'd be interacting with far more people, and far more new people, with a much higher probability of those people working in tech, some subset of whom will be willing to offer me a job.

[Aurornis]

> Moving from Idaho to SF doesn't magically make you more productive.

If your entire world consists of staying home and interacting remotely with a company, then you are correct: Location doesn't change anything.

However, moving to a high-energy city with a high density of experienced engineers and tech companies can increase your rate of learning, career advancement, and experience much more rapidly than living in a smaller city. You have to actually branch out and interact with local companies and people, but it does happen.

But this is all beside the point. Hiring is a labor market. Developers who live in SF have more high-paid job options to choose from than someone living in Idaho. As a result, you need to bid more to get them into your company. Hence, the higher salary.

The discussion about cost of living misses this point. The real reason developers from places like SF get paid more is because if you don't pay them wages that are competitive with their local companies, they're just going to walk away and take any number of higher paying jobs they have access to.

[carbotaniuman]

Or, it could be that being San Francisco has agglomeration effects (granted most startups/companies uterrly fail at this part).

[spacemadness]

I am so confused by this. I demand more in the Bay as Bay area landlords and their Nimby pals are exploitative jerks and California taxes and fees add up quick. Why is that cleanly separated from the discussion? I see it as more “I will demand more here than other places” vs. “I know my worth and it’s exactly X”

[osti]

I'm only worth as much as what people are willing to pay me. There is no inherent value in whatever I'm doing.

[throw0101a]

> This really is one of these things where every employee in a cheap cost of living area will say "Exactly, man!" and people in an expensive area will see it differently because it might cap them lower than what they could get.

Well the co-founders live in the Silicon Valley area, with their physical HQ being in Emeryville:

* https://en.wikipedia.org/wiki/Emeryville,_California

[almost_usual]

If you owned a home in the Bay Area prior to 2020 and refinanced down to a sub 3% mortgage 200k is plenty. If you’re trying to buy now on that salary it will be challenging.

[dewey]

Early stage VC-backed startup compensation is very different from later stage companies or bootstrapped companies. It's very common for founders or early employees to receive a lower salary and receive equity instead.

[throw0101a]

Holding paper-gains equity doesn't provide monthly cashflow to buy groceries. :)

[dewey]

I'm sure 200k will cover that, even in the SV.

[cdchn]

I got some bad news for you.

[a_imho]

Assuming interchangeable human resources there are basically 2 options, either the company is extracting more value from everyone than the salaries they pay, in that case paying fairly would eat into the company's bottom line. Poor CXOs would not turn extra profits by keeping less fortunate employees on low salaries but just the regular one. Or the highest paid employees are not pulling their weight and their salaries are already subsidized by the rest of the company, which is also not quite fair.

Nevertheless, I agree everyone looks at this problem from their own POV, however it should not be the norm to provide equal compensation for equal work.

[keepamovin]

Can you explain more about your view that it should not be the norm to provide equal compensation for equal work?

[a_imho]

It was a bad edit, it (should not be controversial | should be the norm) to expect equal compensation for equal work.

In slightly more detail

https://elsajohansson.wordpress.com/2017/09/13/what-does-a-w...

https://elsajohansson.wordpress.com/2022/09/16/the-wage-gap-...

[keepamovin]

I understand! That's what I suspected, but wasn't sure. I tried understanding it for a minute then thought I'll just ask you! :) haha

Also, thank you for the links. I'll read this because I'm interested in knowing more about thinking behind this. My instinct is in this direction regarding salaries, but I want to develop more clarity. :)

[keepamovin]

If that's your blog, well done! I am totally on board with everything you say there. I've been thinking this way for years, thanks for articulating some more reasons why this is really important! Love your work! :)

[a_imho]

Thank you for taking a look. Be warned though, I'm personally affected and just as biased as everyone else on both sides of the issue.

[tock]

It's just crab mentality unfortunately.

[wuliwong]

Hmmm...I actually had to look up what crab mentality meant but I don't see how it applies here. From my quick lookup, crab mentality apparently refers to a reactionary state of mind where a person wants to sabotage another's success even when it doesn't directly impact their own.

In the case of everyone making the same salary, you could certainly still sabotage someone's success but I don't see how having the same salary makes this type of mentality _more_ likely than at a company with a more typical salary distribution.

My concern with everyone having the same salaries is that, potentially, employees have less motivation to excel in their individual work and are more likely to do the minimum to just stay in good standing with their employer and not get fired. Maybe a company can offset the lack of direct financial motivation with more of a team motivation that the financial success of the company as a whole results in financial reward for the individual or some other way of recognizing individual success inside the company.

I am doubtful this flat salary structure will result in a more successful company overall but I do think it's good to try new things. And yes this has probably been tried a number of times before but maybe not exactly like this. Or maybe some other external variables have changed w.r.t. other attempts in the past and this time it works. The typical salary structures we see in US companies today are the result of a large number of trials and errors and learning.

[tock]

Ah I think you misunderstand. I think employees in the west being pissed that someone in a third world country makes the same salary as them is crab mentality.

I totally understand why companies want to pay less though. It's massive cost savings and it makes sense for them to hire for less money.

[azinman2]

> of course I would want to earn a US tech salary while living somewhere in the country side, who wouldn't

I wouldn’t. I like cities and center of culture and human activity. And the stats generally show cities growing globally, so I’m not the only one.

[dewey]

Replace "somewhere in the country side" with "some other place where the cost of living is lower than the highest one in the country" if it makes you happier.

[azinman2]

The same argument applies. Places with high costs of living are high because they’re desirable. There are no cheap cities I’d want to live in.

[keepamovin]

Is that why you went to Berlin? How does Berlin compare to SV for cost of living?

[dewey]

This site is usually helpful: https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...

[keepamovin]

Interesting, it's almost double in SV the cost of Berlin!

How much salary do you think should allocate to base and how much toward any location adjustments, in general?

[dewey]

I can't answer that, but there's some companies that do all that in public:

- https://handbook.gitlab.com/handbook/total-rewards/compensat...

- https://www.checklyhq.com/blog/open-sourcing-our-pay-calcula...

- https://buffer.com/salary-calculator

[keepamovin]

Hey, nice resources, man! Thank you. No worries that you can't decide on the amounts, it's OK :)

[KomoD]

No, that should not be trusted, any random person can go mess with the numbers.

[dewey]

Just like Wikipedia and many other information sources. Don't trust one source blindly, do your research and you'll be fine. It gives a good enough general indication. A comparison like this will always depend on too many factors to make it applicable to everyone in any case.

[keepamovin]

Your perspective on egalitarian salaries is intriguing, but it's important to remember you can't speak for others regarding their intentions or their whys, or what it is for them. You can't pretend to define that for someone who is not you.

While you argue it's naive and cite different tax systems and costs, companies are successfully adopting this approach even in high-cost areas like the Valley. It might be hard to argue that the world doesn't work like that in reality, given that it’s already happening.

While it may not be widespread, it doesn’t mean it’s without merit or unrealistic. After all, remember that today's 'unrealistic' could be tomorrow's norm! It's tempting to think that people in less expensive areas would be the main proponents of a uniform salary, but the reality is nuanced. Preferences are likely influenced by a variety of factors, not just cost of living.

Your later points about the differences between compensation at different company stages are well taken, however it could be difficult to assert how much this dynamic affects preferences given the practice is not limited to early stage companies and equity vests often fail to yield returns.

In addition, your suggestion that only people in poor places want egalitarian salaries, could be seen as disrespectful of other people, because it seems to ignores the totality of an individual while preferring to try to reduce them to simplistic motivations. In that way, it’s also considered abusive. And can also be seen as disrespectful of others experience, and maybe arrogant: "Only people in poor areas want such naive, unrealistic salaries."

Looking deeper, this aspect of your comment, combined with its narrow focus on a single explanation, might be interpreted as your attempt to express your personal frustrations at your own salary performance, or justify and rationalize why you may not be making more. This might occur because you may find it easier to view something you don't have as unrealistic and naive, rather than the result of choices you could change.

In short, while you mention that egalitarian salaries and enthusiastic support of them is naive and unrealistic, it could be argued that the view espoused in your comment is naive and unrealistic because: it lack awareness of complex dynamics; ignores the totality of an individual while preferring to try to reduce them to simplistic motivations, and dismisses real practices as unrealistic, which might also be seen as out of touch. Overall, your views unfortunately could be interpreted as narrow and an expression of personal frustration, instead of a reflection of underlying real dynamics.

To conclude, while it's likely there's some truth to the correlation you propose, it's also likely true that even if some correlation exists, location is not the only factor at play. People may have various salary preferences, independent of their location, just as the value they provide is also independent. Finally, indeed, your view could be expressed more respectfully of others.

Anywho, it's understandable you may have that perspective, given what your background might be. Yet it's always good to remember that you can adapt your view over time, can grow and can include more data to expand that awareness of reality which you value! :)

[caymanjim]

Except if everyone gets paid the same, you're not being rewarded for the value you provide. I don't think salary should be tied to location, but it should be tied to experience, ability, and effort.

[keepamovin]

You raise an important point. There's certainly multiple ways to look at it.

The egalitarian way where a business can divide the share of revenue that is allocated for salary equally, no matter the role. This makes sense from a philosophy of everybody being a team and contributing equally to the results of the company. It can foster an esprit de corps and and a sense of fairness. On the negative side it could encourage companies to have more burdensome measures of fairness and contribution, and lead to resentment towards colleagues who don't pull their weight.

Then there's the other method, where a value-based salary is allocated to each employee taking into account their experience, ability and effort. Crucially, however, this salary is not adjusted for location. That's the case to which I was speaking, specifically, even tho the type used by 0xide is clearly the egalitarian one.

[dgb23]

> I don't think salary should be tied to location, but it should be tied to experience, ability, and effort.

That's the labor theory of value (see: Smith, Marx), which in theory sounds meritocratic but it can't really be measured or assessed.

In reality compensation either becomes a function of power, social currency and negotiation skills, which is the general norm in professions, or you have an institutionalized, perhaps even democratic process to determine salaries. Both of these variants generate overhead and are only approximations to what anyone would see as fair.

The variant here where everyone gets the same, generous piece of a pie seems refreshingly simple and honest. I would also assume that it attracts the right kind of people, who are intrinsically motivated (at least after the threshold of a very high level of comfort is reached.)

[slibhb]

Saying that people should be paid according to experience, ability, and effort is absolutely not the labor theory of value.

The idea that contribution "can't really be measured" is a cop-out. Contribution can't be measured perfectly but it can be estimated with some accuracy by people who are involved in day-to-day work. "Some accuracy" is really all that's required: as long as contribution is correlated with compensation to some extent, you have a functioning meritocracy.

> The variant here where everyone gets the same, generous piece of a pie seems refreshingly simple and honest.

I bet it works great if you have a small team, are extremely picky about hiring, and quickly fire bad hires. Otherwise it will be awful.

[dgb23]

The problem is that in the end, power, negotiation and social currency often dominate over merit (such as effort, experience etc.) when it comes to compensation.

Even if you actually do measure and agree on metrics, then the measurement can easily become the goal for those who are not intrinsically motivated. Work ethic can't be taught by dangling carrots in front of people, because acquiring the carrot becomes the goal instead of moving the cart. This can be detrimental in a highly collaborative workplace.

Having a flat, generous salary might solve this problem, because you filter out carrot hunters and get cart movers.

> I bet it works great if you have a small team, are extremely picky about hiring, and quickly fire bad hires. Otherwise it will be awful.

Finding the right people to work with is difficult regardless. The same worker can be miserable in one place and flourish in another.

[PaulDavisThe1st]

> Contribution can't be measured perfectly but it can be estimated with some accuracy by people who are involved in day-to-day work

This is handwaving in the extreme. Anyone involved in software development knows that a single line of code can be critical to success or failure, as can a blob of 100k LOC, so product-quantity metrics are of almost no use. The "estimate" you're talking about generally comes down to general "feelings" about who works hard, which have repeatedly been shown to be poor metrics for actual contributions.

[slibhb]

Life is full of handwaving. In almost any workplace, it's very simple to know who's doing the work (and it's usually a shockingly small number of people). It's the idea that we can reduce this to a mathematical formula (the opposite of handwaving) that's odd.

> The "estimate" you're talking about generally comes down to general "feelings" about who works hard, which have repeatedly been shown to be poor metrics for actual contributions.

How has this been "shown"? Anyway, you're begging the question that there's some way to determine "actual contributions" that we can compare to "feelings".

If you actually work with a group of people on a daily basis and can't rank order them in terms of usefulness, I find that astonishing. And remember, rankings don't have to be perfect, they just have to more accurate that random.

[PaulDavisThe1st]

> And remember, rankings don't have to be perfect, they just have to more accurate that random.

No, they have to better than both random and "everyone is, on average, and over an extended period of time contributing roughly the same". That's quite a challenge.

Do you go to customers and ask them which features provide the most value to them, and then follow the code back to the people who implemented them? Do you go to the customers who paid the most, and repeat the question to them only?

We're not talking about some award-prize ceremony speech in which we acknowledge that Dmitri and Aneka led the work to get version 8.0 which has been a huge success. We're talking about actual salaries, which are presumably linked in some way to actual sales, and I'm insisting that connecting individual developer efforts to the sales numbers is extraordinarily hard. "More" and "less" are not enough to come up with actual numbers.

[iamawacko]

That is not the labor theory of value. The whole point of LTV, at least in Marxian economics, is that workers can't be payed according to their socially necessary labor, because a surplus labor is extracted.

Besides, LTV as a theory is meant to be a description of the world as Smith, Marx, etc. see it, not a prescription for how things should be done.

[dgb23]

You're right that it is descriptive and not normative.

But the underlying belief of paying someone according to their effort, is very much based on the same premise.

What I'm saying is that nobody is _really_ paid according to their effort, experience etc. because those things cannot be reasonably measured.

The typical process of determining compensation is based on negotiation and power. In some places the process is more democratized and rules based. Both of these are only to some degree related to actual effort, experience and so on. This discrepancy becomes larger the more people are involved as well.

[svnt]

Presumably their equity is not evenly split.

[closeparen]

Location independence is not the interesting part of Oxide’s compensation strategy. It’s that everyone makes exactly the same. There are no negotiations, no levels, no promotions, and consequently no promo packets or promo projects. This is extremely enticing to FAANG types who are tired of a certain kind of bullshit, at the cost of a certain level of ambition.

[systemvoltage]

I wonder if they offer equity. Hierarchies always form, they tried this with Gore Associates in Arizona (totally flat company structure) and has major problems.

[steveklabnik]

We are compensated with equity, yes.

[Aurornis]

Do all employees get the same equity?

I've worked at two companies where everyone got the same base salary, but the variation came in equity.

[steveklabnik]

I don't know to be honest, but I assume that the equity is variable.

[sunshowers]

As a FAANG to Oxide refugee, I think what we're doing is orders of magnitude more ambitious, especially considering our small size.

[cdchn]

Selecting for lack of ambition may have some negative consequences on your businesses' ambition.

[closeparen]

But the problems of engineers optimizing architectures and project plans for their career trajectory over business need are also well-known.

[systemvoltage]

Yeah this I’ve seen everywhere, but more related to the company size. In a 50 employee company, it’s hard to pull that off. As organizations get larger, you get this as inevitable part of human nature. If the salary table is flat, then highly ambitious people will ask for more skin-in-the-game.

The skin-in-the-game bit can be promotions, equity, stock compensation, etc.