What is being described here is supply/demand economics. If you think you’re being underpaid, quit, find something else that pays you more. The reason why you won’t quit is the reason why the company doesn’t pay you more. You don’t have other options, and if you quit, they know there will be 10 other people ready to take you place for those wages.

Part of the reason why wages in places like the Bay Area are high is because companies are competing with each other for talent and if you don’t pay people, they are ready to quit and replacements aren’t easy at lower wages.

I'm just imagining this dude quitting and his manager suddenly realizing that no one else knows anything about the parts he worked on and how fucked they are now. Just because a bunch of people could take your job doesn't mean they'll give a shit about the job. Good, well motivated, employees are extremely hard to find. Understand your value and don't let some dude in a button down shirt who has never written a line of code trick you into thinking you aren't valuable.

I would bet its rarely a case. We like to think that we are irreplacable, but after our quit company/project is still moving on.

I agree that life goes on, but it's not rare at all. It happens all the time. People leave and things are f-d up for a while.

The thing is, it's not a permanent condition. People adapt, new hires are eventually found to fill the gap, or others who were thought of as not up to the task take the opportunity left by someone's absence to step up in their career.

One person leaving won't sink a company that is large enough. That doesn't mean it won't hurt, however. And how the company handles things after the departure is very critical.

Perhaps more important (and dangerous) is the morale hit that the others will feel as their peers start leaving. There very much can be a "rats-leaving-the-sinking-ship" effect that can be precipitated by a key person leaving.

Oh, yes. One person does not sink a ship, but I've seen cases where whole teams leaving destroyed companies.

And while I was under no illusion of my importance and did not expect any breakdown of the team or anything like that, I did think I would get at least ONE question after I left from my previous teammates about some obscure thing that I thought only I knew.

Nada. No one asked me anything - they had no issues for which they had to reach out to me. Team did a re-org and things just kept moving. It was a humbling realization to say the least.

More likely no one cared.

It also depends how regimented the team is, places like Amazon have large numbers of coders on the same project, watching over each other. But they also compensate their employees well.

Over the decades this has proven itself to be true so many times. I've been part of big enterprise organisations as well as smaller startups that had some "vital" proces which relied on that one person. When they left however, it didn't really change anything in the big picture, sometimes it let to the entire guts of a company getting ripped out and replaced by something different, but in the big picture it just became another thing to solve.

I think it's a good thing to learn, both as a manager but also as an employee. Because at the big picture, what "irreplaceable" really means is "liability", and that's not a great thing to be at a company.

Good managers will work with you on how to reduce your importance, and great employees will know how to do so themselves. In the world of work, a good work relationship is one where the organisation you work for give you opportunity to grow, and sometimes that means, outgrow the organisation itself. But it goes both ways, and you should try to respect that, even if you're the rockstar employee because it'll make you even more valuable.

they are fine with throwing their money around until a problem is solved. and would much rather hire someone with 1.5x your pay than to give a 10% raise. its just a political / power thing...

internal politics and preserving imbalances in distribution of power is much more valuable than adding a little inefficiency to worker output

In the rare occasion that a single person is valuable enough that if they leave, the company would shut down, the person is well compensated.

Only in an imaginary world of perfect information and labor liquidity, which is about as far from what we have (and could have) as can be.

Location-adjusted pay for remote US workers is indeed a social norm, proposed by some firms and accepted by enough of labor for it to work for them. It persists mostly because it exists and because there’s no organized effort to disrupt it.

Nonetheless, their are still many firms that don’t do that, many employees that don’t settle for it, and some firms that initially negotiate from it while accepting counteroffers that reject it.

Reducing an extremely complicated market to an oversimplified post hoc theory, just because it exists a certain way, is neither correct nor helpful to the issue at hand. It does nothing but shut down richer discussion and reinforce an incidental status quo.

OP is also correct in that the following is how HR at almost every large company thinks about comp:

1. Comp is usually not set by a Hiring Manager and is specifically based on "comparable" which is based on job type and location.

2. Job type and location is by far the easiest way to create a heuristic for pay rates because the data is public

It's basically impossible to individually value everyone's contribution consistently and without bias across hundreds or thousands of employees - plus I don't think people would want to actually be judged with any method that puts granular measurement on something as vague as "value"

So if you can come up with a better way to determine pay *at scale* other than the open market approach, I'm super interested.

The only way to do this in my mind is to never pass -- lets say -- 100 employees.

I would just like to add that I have found myself extremely happy working for a company of ~100 people (especially when compared with my previous company of ~30,000).

That's backwards, though. It's a social norm because it's the most workable solution. Firms that overpay salaries (defining overpay as paying far above the market rate in any given region) will not be able to afford as many employees / highest quality employees / as much marketing / as much downturn stability or runway / as much other investment as their competitors, so they will lose on average.

And this makes sense. The same forces that drive salaries up (competition from other employers willing to employ the same person) also drive it down. You can't only have upside.

Why the market rate in any given region? Why not just the market rate?

So salaries might go up in one region if people want to do business there, for the sole reason that there is competition amongst employers for the employees there. They'll go down (or stay the same) if there's competition amongst employers for employers.

How does your example raise salaries all over the world to the most expensive salaries, worded in a way that also explains how those expensive salaries came about?

Hell, I worked for a Canadian company that paid Canadian employees 30% less.

The question is, once the company has decided it wants you, what’s that going to take? Making national median offers to Bay Area candidates essentially swears off of ever hiring them. That could be a choice, but for now it remains a bench of talent and experience that companies want to draw from, even if not exclusively.

Making Bay Area offers to rural candidates is giving them 4-5x their next best option, which is characteristic of either a) the devil, or b) rich people making expressive displays rather than business transactions.

It’s like everything else, your leverage is your next best alternative, and until work goes fully remote location is a factor in that.

EDIT: I will add that if you think calibrating an offer based on the worker’s alternatives is crass, think for a second about what exactly your skills, education, and experience are for. Those work through the same mechanism. If that mechanism is wrong, you should be happy to work for the national median wage across all industries and all education levels. Even a mediocre SWE salary is way too high.

Companies that don't operate from the Bay Area, almost never hire Bay Area remote workers; and companies that are headquartered outside of the US, almost never hire US remote workers. Precisely because they cost too much, for a company that gets no advantage from doing so. (Source: we are a Canadian company; we hire from everywhere but the US.)

I don't follow. This isn't true at all in my experience, plenty of companies in Canada and the US hire across Canada and the US. It's practically the norm.

If you work for a Canadian company that doesn't hire in the US then you're comically underpaid. Wages are converging very fast. Many companies are paying parity and frankly folks are selling themselves short if they don't fight for parity.

(If you're not talking about software development, then ignore me)

Wages might be "converging" to the same numeric value — CAD$N in Canada vs USD$N in the US — but those are, and have always been, very different amounts of money. The two countries are still nowhere near the sort of economic equilibrium-state where Canadian companies are paying the prevailing US salary exchanged into Canadian dollars.

Also, there are a number of costs related to hiring US remote workers (as a company headquartered outside the US) that don't apply to hiring remote workers in most other countries. You're expected to provide some kind of private insurance plan, for example. Take-home pay may be converging, but the cost to the company of hiring a salaried US employee — or even a US contractor, as long as you care about being equitable / not building resentment when your employees talk amongst themselves about relative total compensation — is still higher than the cost to the company of hiring elsewhere.

And to be clear, the prevailing wage isn't even that relevant, as we're not really talking about "hiring the median American" vs "hiring the median [person living somewhere else]." We're talking about hiring people who apply for — and are considered top candidates for — remote tech jobs, among a global candidate pool. In the US, these people mostly happen to live in HCOL areas (like the Bay Area); which means their BATNA is to be paid far more than the US median wage for an SWE, because that's what the companies in HCOL areas have to offer to retain local talent there. To hire these people, you can't just offer "the going rate"; you have to offer FAANG money.

You may be surprised to learn that this is quickly changing.

> Take-home pay may be converging, but the cost to the company of hiring a salaried US employee — or even a US contractor, as long as you care about being equitable / not building resentment when your employees talk amongst themselves about relative total compensation — is still higher than the cost to the company of hiring elsewhere.

This is not true in my experience. It's slightly cheaper to hire in the US than other markets, if you do not yet have any presence in those markets. It's a wash long term. Some firms offset the extra costs for US workers benefits by simply paying others more.

> To hire these people, you can't just offer "the going rate"; you have to offer FAANG money.

In the ballpark, but yes. The gap is rapidly closing. Plenty of seed or series As are paying near FAANG rates.

Probably only after they get to a certain scale and cannot find more talent in Canada? When did Shopify start hiring in the US - right from the beginning?

Example: Show me a startup in the YC job board based in Canada (there are many these days) that is hiring locally only for software engineers.

You're putting the cart before the horse. Investors live all over the place, and large funds have offices in markets where there is a signifcant number of possible high growth companies to invest in. And they'll invest where they don't have an office and always have.

The reason why so many investors are in silicon valley and san francisco is because of the companies. And the companies are here because of the environment. I've worked around the world but the reason I love working in the valley (specifically the peninsula) and not elsewhere, not even SF, is because of the extreme density of people, resources, markets, and just the sheer intensity of the place. I hire from all over the world, but really, just getting shit done is so much easier around here.

Ignore the bros. Those assholes get the press 'coz they're interesting to write about. I'm talking about nerds in true tech businesses like hardware, software, mechanical systems, pharma.

It's not for everyone, and even people who would like it may choose elsewhere for other reasons. Those decisions are all legit too.

DARPA made Silicon Valley, but Stanford and UC Berkeley — and nearby communities that evolved to become basically playgrounds for the students of them — kept it going. Entrepreneurs came (or stayed) to capture the supply of smart and bored college-aged intellectual labor; and VCs came (or stayed) because of all the entrepreneurs.

But that doesn't mean that seed-stage companies don't move to (or stay in) the Bay Area these days primarily because of the VCs, rather than because of the talent. Talent is free to move anywhere it likes — especially these days. An entrepreneur will find just as many potential employees for their startup in literally any college city.

But tech VCs (and especially ex-tech-entrepreneur angel investors) will, despite having a presence in many places, mostly still live and spend their free time in the Bay Area. And so you'll be much more likely to have your name on their lips if you're showing up at local events they attend, bumping into them at restaurants, meeting them on the golf course, etc.

Let me put it this way: every Canadian seed-stage startup I know of, has their CEO regularly fly to the Bay — even if they're located on the east coast of Canada! — to rub shoulders with the Sand Hill VCs, in hopes that they'll get more attention there.

No? If you budget to hire two employees at Bay Area salaries and don't care where they work, you should pay them Bay Area salaries regardless of where they work.

Plenty of companies do this. It's fine. I don't see anything devilish or expressive about paying all your staff the same wages.

> I will add that if you think calibrating an offer based on the worker’s alternatives is crass

I think you're foolish if you don't expect a worker's alternative might be in the Bay Area salary range in the year 2022.

> Even a mediocre SWE salary is way too high.

It's not. The dollar-value delivered by a mediocre SWE has been significantly high for a long time, often orders of magnitude the salary.

Making a Bay Area offer when you could just as well have closed the candidate with a locally competitive offer doesn't make business sense. It is exactly an expression of the company's values: that it thinks paying people the same is inherently, morally good. Which is not an uncommon set of values in tech! If you can find a company like that, more power to you. But whether it's sustainable to be paying more than necessary for some of the staff depends on the company's economic conditions. If the company ever needs to trim its sails, then reverting to location-based pay would be a natural step.

Yes, which is why I recommend not accepting location-based pay. It works!

> Making a Bay Area offer when you could just as well have closed the candidate with a locally competitive offer doesn't make business sense.

Sure it does. If your revenue isn't locale dependent then it makes perfect business sense. Obviously if you're selling local McRuralTown widgets for McRuralTown denizens and the cost of living in McRuralTown is peanuts then this won't work for you, but you're probably going to have a hard time hiring smart software people.

> If the company ever needs to trim its sails, then reverting to location-based pay would be a natural step.

Typically this is a non-reversible policy. Reverting to locale-based pay is a suicide pill unless you're churning your entire workforce, in which case the pill is likely already between your teeth.

The delta between the wage needed to get & keep the candidate vs. the wage you're actually paying them is essentially a charitable donation here. Of course businesses regularly do philanthropy, nothing wrong with that. Their own upper-middle-class employees are a weird choice of beneficiary though.

Business sense would be to keep the money and put it towards its most productive use, like hiring another employee or procuring labor-saving technology.

If you are doing location-based pay, the difference between the wage you are paying in inflated regions and the wage for a similar candidate in the least expensive region from which a candidate is available is a charitable donation.

Location-based pay means systematically overpaying for labor unless you are taking your own location-based pay schedule into account when hiring and preferentially selecting candidates from low xost regions unless the quality of the candidates from the high cost region makes up for it. But that's just a roundabout way to get to the equivalent of location-neutral value-based pay.

Right, if you can find them. But the distribution of talent isn't random: bright ambitious people were responding to incentives to migrate to tech hubs at least up until the pandemic. People grew from intern to senior working in the industry's most respected engineering shops there, learning from the best. And that includes global talent: H1Bs are everywhere. There's a case to be made that this cohort is overrated or overpriced and you don't need them - fine. But if you want to hire them in numbers, you're going to have to pay wages that are competitive where they live.

I agree you wouldn't want to hire very junior or unimpressive candidates from the Bay Area/New York/Seattle for remote work, when you can get similar candidates for much cheaper in LCOL regions or countries. But if you're looking to hire from the top end, and your offers aren't competitive there, you're going to miss a lot of great options.

Right, so pay-by-value will probably end up paying higher wages, on average, in tech hubs, without any resort to pay-by-location.

That's not necessarily true. Many fully remote companies hire from anywhere and pay location-adjusted wages. So it's a roll of the dice whether the replacement makes more or less than you.

I'm not saying they should give more/better offers to people in 'cheap' locations, I'm saying location shouldn't influence the offer at all.

Once you get past that basic hurdle, you might find that the company is willing to pay more because they want a given skilled worker to be co-located with the team they will be joining to increase productivity which might come at a higher price than hiring into a different location but potentially trading off worker and/or team efficiency.

That's making a big assumption — that the team is in an HCOL area, such that "colocated with the team" is synoymous to "costs more."

There are a lot of companies who are headquartered in LCOL areas of the world; but still do location-adjusted pay, such that they might be paying someone working remotely from an HCOL area more than they pay the local team.

So you either: a) write off every candidate who is still in talent hubs, b) pay way above everyone else's competing offers so that your universal salary is also competitive in talent hubs, or c) pay based on location.

I don't think the OP would feel demotivated after learning their company pays competent employees more.

That's not quite true.

The cost of hiring your replacement is only the maximum they'll accept to pay you. But they will pay you only slightly above what they think you'll find elsewhere. So your pay is the MIN(cost of your replacement, what they think you can get elsewhere).

That explains location-based pay for remote jobs. Because they take into account that your alternatives are mostly local, so they only have to compete with local rates. The only way out of this is to be willing to relocate, or convince them you're getting enough good remote offers that they have to compete with that.

MIN(cost of your replacement, what they think you can get elsewhere, your value to the company)

But should location based pay be just accepted because that's the norm? There are variables that can't be used to do discriminate like age, gender, race, sexual orientation etc. We've accepted equal pay for equal work in these cases. Is it that far fetched that even location should be treated the same?

It’s got nothing to do with discrimination, it’s purely about hiring for the lowest cost. They have to pay more in EU and US to get employees, and less wherever you live.

The opportunity cost of not having that senior dev on board for more than 3 months is damaging for rest of the team and company goals/time lines. In the current market, my guess is that this person would be replaced with someone NOT in that location unless for some reason it is business critical to have someone in that area, which is almost never for software developers.

I work with HR team who sets compensations for our global workforce. If you think that HR and leadership does not take this opportunity cost in consideration when setting policies, you are badly mistaken. They are very rational in their decision making.

Because of that, the rare employee who does move can be paid the new location wage without increasing the costs of the people who don’t move. Companies don’t care about the costs of the <5% of people who move. They care about the costs of the >95% who don’t.

(Side note: There are companies who budget in headcount and work like GP suggests. I think most companies budget in money and work like you suggest.)

If we don't accept location based pay and start paying a uniform global salary, the wages will sync to Asian job market level rather than rising to SV level. Any company doing so will not be able to hire anyone in SV.

OTOH any company paying SV level wages to everyone will do so only for a short while before they realize that they can increase the profit by reducing pay elsewhere. Why would they not do that?

Plus I don't work. I'm disabled I collect SSI I get like $10,000 a year. That's it! I can't have more than $2k in my bank account. I can't invest. So uh, have fun making tons of money I could only imagine.

Sadly some careers pay more then others but that’s life. It’s why I worry about the education system eventually crumbling, since teaching and in some countries even healthcare professionals are woefully underpaid. I wish it wasn’t the case but some people get lucky and others successfully follow the money, whilst society allows governments and or private industries to milk human kindness for as much as it can get away with.

So do you advocate uniform global salaries across different locations in different countries?

And then obviously from the capitalist perspective, your employment only exists to the extent that the employer derives more value from your work than they pay you.

You're experiencing alienation from the fruits of your labor. Your labor being exploited to maximize profit. Unfortunately, the comments here are right. It "makes sense" in the sense these experiences are characteristic of life within capitalism as a laborer.

Functionally, your location is being "colonized," so to speak, by capital. I don't know if there's a real phrase for it, but I suppose it could be described as "telecolonization." Management has found a resource (your labor) that can be cheaply extracted by alienating you, the "telecolonized," from the value your labor creates.

It is bullshit. If you want solutions, your recourse is either collective action/unionization or finding a new job. You're being exploited by capital more than your coworkers. That is the context from which this sense of unfairness arises, I believe.

The USD exchange rate is just too good for exporation of goods and services. They simply offer more, despite the wage arbitrage. More money, more benefits. The typical US software developer salary is a truly ridiculous amount of money here due to the 5x multiplier, and even a fraction of it outcompetes every local enterprise I've ever seen.

I know exactly how it feels to see people in developed countries making 10 times what people here make on average.

You really think they won’t just stop hiring people from that country if they “took action”? Or if they could get another job at a higher rate they wouldn’t?

My take on the subject is they are providing the OP with an opportunity which they otherwise wouldn’t have due to the current job market in their country in exchange for a rate of pay that is relative to said job market.

Maybe it sucks, maybe it’s unfair (it isn’t) but it is preferable to the alternative which is to not have a good paying job.

To put it another way: Yes, zero exploitation of OP's labor is less than "some" exploitation of OP's labor.

It clarifies things for me to replace "cheaper labor" with "more profitable labor". Why would a company refuse to hire more profitable labor? How could the company not having any relationship with OP exploit his labor more than hiring him as more profitable labor?

Sure, because the foreign company exercises their access to capital to compete at a wage level that local companies can't compete with, but is still as low as possible to extract maximum value from the investment made by purchasing the worker's labor. Why do you think there's such inequality in economic opportunity, such that exploiting labor in this fashion is possible, in the first place?

> Is that exploitation any more than the US employee not getting paid 2x or 5 or 100 their current rate?

I'm not making any comparative assertions here. You seem to be making the case (by implication of your question) that in your opinion it's good for OP he's getting the opportunity to be exploited. And I'm just saying, it's exploitation. It is what it is.

> If the company is willing to pay me that amount in a different location, why can't it pay me the same here?

And my effort is also based on the cost to hire my replacement.

Having said that, I am not really buying it. There are significant pay differences based on location even in the same time zone for the same remote work.

Sorry, but this logic needs to stop. If a company is selling a product online for a fixed cost to an entire region then the people who contribute to that product that do the same thing should be paid the same amount. That is, indeed, a moral failing.

If a company wants to pay workers less based on where they live then their product should be similarly cheaper. We just don't see this though.

Anyway, the way I negotiated was very simple. Basically a version of ”I understand that this is a good salary relative to my local market, but I am not even looking for jobs in my local market. I am comparing your offer to offers from other US-based companies that I received for remote work.”

That was it. The part of other offers was true of course (even if for companies that I wasn’t too excited to work for). No need to even reply to their arguments of “company policy”, “cost of living”, whatever. I only have to state my point of view.

There is also the topic of me not receiving benefits like health care and 401k and other stuff that American employees get. I didn’t use this argument (didn’t occur to me), but I have the impression that this was considered in their calculation in how much to raise their offer.

I am close enough to US timezone (Brazil).

So, I guess you would be paying me what you pay US employees as well :)

Agreed.

> I am close enough to US timezone (Brazil). > So, I guess you would be paying me what you pay US employees as well :)

Works for me. I have no particular prejudice against any culture, my concerns are entirely practical. If you can participate in meetings during hours the rest of the team will be awake, and your English is good enough that everyone can understand 100% of what you say, you have equal value to someone sitting in the US.

In a remote-only culture.

https://en.wikipedia.org/wiki/Best_alternative_to_a_negotiat...

If you go this route and you don’t have any other offers, are you willing to walk away or will you settle? Or if you do have those other offers, are you willing to take one of them instead of the one you’re currently negotiating?

I find these jobs in either HN's "Who is Hiring?" or AngelList.

See https://remoteok.com/, etc.

If on he other hand, you are paid $200k and the colleagues are being paid $400k ... well you are well paid, might be harder to get a fully remote pay rise, but not impossible I think.

Now lets say you are paid $50k for argument sake, and you talk to your boss saying you want $100k and you can get that elsewhere. They would be crazy to let you go as $100k is still probably less than they are paying in the US if you are doing the same job.

What I have learned is the 'policy' evaporates under enough pressure. Of course they may still say no, in which case look around.

If they are paying you less than you are worth, they are not your friend, don't feel bad about moving to another job immediately.

This 1000℅. Honestly, even if they are paying you what you are "worth", remember the company is not your friend. (You may have friends that work there and you may feel loyal to those beside you in the trenches. That is great! But never forget that the company does not exist for your sake and you do not exist for the company!) Do what is best for you and your's and do not feel bad about it!

Someone from Asia who is pretty good at their work can get a fully international remote job that pays north of 100K USD? Is this practically possible or is it super difficult like say getting into MIT or CMU. I'm asking because this seems farfetched and I have no idea how these things actually do play out in the real world.

100k is high though; 100K in the eu is still not common at all. I know many people (with uni degrees and senior engineering positions) in Nl/uk/de who would switch jobs today if you offered something that. If wfh and reasonable interviews of course.

But they wouldn't replace him with an American for >$100k, they'd replace him with another local for $50k.

I think you should negotiate for as much as you can, but it is unrealistic to benchmark yourself against US employees of a US company based strictly on your skillset without any appreciation for other perfectly valid factors.

Barely anyone in Europe is working more than 40 (or 42) hours.

Are there super heavy hustle places? Probably, but most places realize more time is not linearly more output for creative/knowledge work.

(Similarly, the internet would have you think anywhere offering "unlimited vacation" is a scam but I used and loved it)

Like in my home town, C# is king.

Are you going to pay them more or fire them? I don’t work for less as an American Expat, I work for how much I’m worth (which is a lot more than local wages) and I live where I live because the money let’s my wife stay at home, in a nice house in a nice neighborhood instead of us both working our asses off just to have a decent house in a shitty neighborhood.

If you want to pay local wages, go be a local and hire locals.

They said they won't raise my salary and they expect me to stay in my region (Latin America). They also said that if I go to the US or Europe, it would be though to live there with my remote salary.

It felt somewhat insulting tbh. As if they said "we want you as disposable cheap labor, not to become a part of the company" directly upfront.

We should not expect everyone to be a horrible person, only motivated by profit, but we also should not expect people to act against their own interests all the time.

"The only reason the company hired someone overseas was to make more money. They would not have even considered these candidates if they weren't hugely more profitable. Instead, the company would have hired from the local labor market instead."

Yeah, what you are describing is practically the definition of exploitation of labor by capital, and alienation of the worker from the value they create.

Not the only reason: I have plenty of times hired people who had skills we needed and couldn't find locally. Sometimes brought those people over on H-1B, sometimes just hired them remote. And then if we had a few in the same area, opened an engineering office (though these days I am less likely to do that unless the folks really wanted it).

But it would be a great motivator if they actually bothered to relocate you in case you showed remarkable performance and added value to the company.

"We just want someone to work for cheap without prospect of progress" tells me that job will have a low ceiling for someone that wants to progress further their career

Ding ding ding - we have the winner here. In my company, all new headcount is from cheaper countries. We are no longer hiring in the US.

That is reasonable. But if you want to work on a schedule that is not the same as a US dev, then you are worth somewhat less to me. E.g. South America would be fine, India not so much.

> And what are you going to do if that dev moves to the US while working for you (such as on a partner visa)?

When we have devs come to the US on a visa, they are actually switching jobs to a US role. They don't come here unless we have an opening. Then they are able to compete as any other US candidate. It does happen periodically, but not too often.

Wow. So, a programmer, sitting in a seat during certain hours of the day is what makes a good programmer?

There's nothing like working with someone who is only a couple of hours overlap. Progress happens 24 hours a day, and never stops to sleep except a short 1 day weekend. There's nothing like waking up to find the interface you defined the day before already implemented and a quick chat/meeting to figure out what was done and needs to be done.

But for large tech companies that's not how you're hired - a body is needed to fill head count and the overlords determined that this particular position was better filled by a body in a cheaper country. Even if you do turn out to be very valuable to the company, the system is not set up to accomodate that scenario (and realistically, if you leave, the company can just hire another 5 people and hope to get another very valuable person among them).

Here's a different point of view.

A company can choose to consider people for work either close to their offices or remote. People who get hired close to offices come with an expectation that they will go in to work at some point, and be collaborative and possibly more effective than people who are remote. This point is debatable, but is up to the company to determine for itself whether it's true or worth the premium. There is a limited set of people living close to offices, and costs of living are generally higher, and pay reflects those factors.

If the company is to consider people who are remote and are not going to be coming in to work, that opens up practically the entire world for them as a labor pool (modulo time zone issues, etc). People in many other countries get paid far less and are willing to do much more work for the same pay than in the US.

If you are remote, you are competing against the labor pool that is similarly situated. If you can show that your value is disproportionate to the average, maybe you can negotiate.

Try to reason through things in a way that reflects more objective reality rather than your perception of it, or your feelings. No one is "forcing" you to migrate or do anything. You are seeking high pay and remote work. You're totally free to go out there and find the company that's offering that. Your company is offering pay and a job, at rates that you can decide to accept or decline. You make your choices, and either feel good about them, or not.

You might also try building some reputation on Open Source projects with a strong community, the type that's regularly being hired for. Get referrals from your colleagues in that project for people looking for employees or contractors. Cite the rates your colleagues make, and don't accept location-based reductions.

(Also, make sure you have a job or contract lined up before you leave, unless you're really confident you can get one at the rate you want.)

But the amount of options is overwhelming tbh, and the skills needed for open source projects are far from the backend API's the industry usually needs.

It appears you are probably employed somewhere in Asia and you are comparing with similarly titled roles within your company/outside your company in other geographies like US/EU.

Salaries are generally local labor market and demand-driven. Think of it this way. If you leave the company, chances are the company backfills your position with someone having the same job skills from the same local market. If there is a certain supply of labor force in your local market at a certain salary level, your company is going to use that to peg your salary; not the salary level at which they get similar skills in Amsterdam/London/New York/San Francisco.

Also, if the company has established offices in say US/EU and India, they are trying to play a cost arbitrage play. Certain goods/services cost higher in US/EU and lower in Asia (and vice versa too). Labor costs are higher in US/EU compared to Asia (most locations).

Unfortunately, this is the norm and has been for centuries.

My advice:

1. Stop doing exchange rate conversions of foreign labor market salaries for the similar positions and losing your mental peace.

2. If you are in a position where you can immigrate to the foreign country, consider doing that (if not permanently, at least for a few years).

3. If that does not work for you and if you have selling/business development skills, you may consider freelancing for clients from the US/EU regions and bill them as a contractor at rates they are used to domestically (this is a whole another ball game and you need to build a client roster and work may/may not be steady).

The contracter route seems feasible and actionable. I'll give this a serious shot. Thanks for bringing this up.

But in some companies, after they decide to make an offer, it will be "how much to get you to accept". So that wouldn't be a function of their options so much as a function of your options.

As to how the calculus changes when it comes to retention, in your company, I don't know.

(Tech companies overall are famous for being good at luring talent (e.g., huge pay bump from current place) but bad at retention (e.g., small raises that don't track with market and value to the company). Hence the common practice of job-hopping frequently, and all the long effects that might have on software engineering practice (e.g., resume-driven development, and people not around long enough to see how engineering decisions play out).)

Do you trust your manager to deal with you in good faith, to have your best interests in mind, and to represent you competently with the company machine? Maybe see whether your manager thinks the company is paying what the processes (not necessarily individuals) implicitly think is what they can get you to accept, rather than what it would cost to hire and retain someone who could provide as much value to the company. If it's the former, see whether that sounds exploitative to you and your manager. If it does, maybe manager can look into whether something leadership wants to reflect upon, and see whether it can do anything to improve that.

I hope my HR department doesn't act like that because it will be suicidal in the long run. Colleagues talk and salary details most certainly are shared. Once someone finds out what other person is making, it is a potential legal landmine because the company is not paying equally for equal work. Just imagine that a man takes a higher salary to accept than a woman. Suddenly there will be charges of sexism. Now play this scenario for other protected categories like race.

Location based pay is legally accepted so companies have nothing to worry about.

I'll also suggest treading carefully with "just start your own business". My read is that the first 3 months will be "program 14 hours a day and make something awesome", and the rest of your life will be meeting with customers and preparing slideshows for your board. If that's what you want out of your career, you should definitely do it. If you just want to be locked in some basement writing a lot of code for a lot of money, you probably want a non-customer-facing engineering role at FAANG.

Also you dont know where the "enough job" is going to be rated. Your manager will determine that

    I've raised this issue with my manager and they've told me that I can 
    transfer if i want those pay scales but that's not a possibility for me. If 
    the company is willing to pay me that amount in a different location, why 
    can't it pay me the same here?

I fully understand that larger organizations make the transition to an MBA bean counter mindset that attempts to homogenize and commoditize employees, and I don't have any suggestions to change this status quo.

But small owner operated companies don't have to play by these rules. If you are leading a small technology company you should be well aware that there are huge differences in output between employees and your ability to actually know your people by name along with each of their strengths and weaknesses is information asymmetry that you have over the bigger competitors.

There is no reasonable amount of money I would accept to return to my previous cooperation.

Another reason is because they know where you live, and the salaries in that location. Keep that in mind when someone says they have "nothing to hide" - this is how companies use such information. To better determine the absolute minimum they can offer you (or maximum they can sell you).

I don't know the size of the company or how the split is regarding the area you're from and the US/EU but they might have allocated budget to employment counting on this split and not be able to pay for a generalized change, hence why they'd offer if you moved, but offering while being where you are could be "dangerous" as other people in the same position as you might ask for raises as well.

I can't make sense of the "trapping" argument however.

Now, those are the reasons I can see for the policy to be in this way, you are free to disagree, as do I, but the only real answer is going to come from the higher ups. If it's a public company sometimes these kinds of things are listed in their releases with some notes, could be another place to look at.

Why do you want to debunk them? Is it:

A) You believe you can change the policy, and thereby get paid what your US colleagues get paid?

B) You want to validate your feeling (that the situation is unfair) and be certain that you are right?

C) You are curious about how the world works?

D) Something else?

(FWIW I've been in the same situation, working at a FAANG company outside US/EU, with lower pay scales.)

- You are dramatically underestimating the cost of food and energy in Europe and America.

- Countries with free functional education and healthcare have a much higher effective tax rate than India.

- With the exception of Mumbai, a senior software engineer should be able to afford a house in any Indian city. If that is not the case, it's very likely that you are getting short-changed. And keep in mind the median sales price of houses in the US from April to June was 440k USD. That's more than 3.5 crores.

- The pay difference between India and the West for software engineers has shrunk dramatically over the past few years. If you've been at the same company for a long time, maybe it's time to switch.

- Top up health insurance is cheap. There really is no reason why an illness should financially ruin you.

And if you apply to many and can't find a better one, then try to see it as 'they pay me better than anyone else' rather than they pay me less than others in the company.

I believe (but have no evidence) that smart companies will minimize the location differences to get better talent and will get a competitive advantage, but you may need to search ...

This is dubious. I see a lot of "I'm doing the same as him/her/that level but only getting paid x" and it's often not true. Either in terms of responsibility or expectations (for example nobody really thinks an offshore / outsource provider will deliver the same as in-house) you are probably doing less. The solution is to get the job you are comparing yours to.

Edit: this comment posted at the same time as mine is saying exactly the same from an employer's perspective: https://news.ycombinator.com/item?id=32718612

There where times in my life when I thought I was hot shit. And if you only looked at Jira and git, I WAS good, but I was also green and lacked a lot of knowledge and wisdom compared to more experienced coworkers who I assume got paid more.

You live in a poor country making $50k-$100k, and the US devs are making $100-200k.

You live in a poor country and get paid sub $30-50k, and US gets paid $100k+?

I used to live in Ecuador, and the “official” min wage monthly is ~$300USD/mo. So essentially you can hire a full time nanny, cook, etc for sub $1200 easy.

That’s never going to happen in the US with less than $400k+.

So in US 150k+ is top 20% of income or there abouts. But in a random poor country, $100k+ is probably top 0.01%, right? What am I missing here?

Also what is your skill level and could you quickly replace this job with another at the same or higher rate?

Lastly, if you really want to move, there’s 30+ countries you could move to in the interim if you really wanted out of your country. Canada is relatively simple, there’s tons of Caribbean islands that can grant you citizenship for sub $200k, which you can then use to travel freely without visa restrictions globally. Same with EU countries like Malta etc.

It's top 8% (92th percentile) according to: https://dqydj.com/income-percentile-calculator/

As far as how to deal with it, look a round you I bet your salary is a very good wage for the area you live in. If not then find a job with a local company that pays better. Software developers get paid well all over the world relative to where they live.

BTW, even with the wages in Silicon Valley, most developers there can't afford a house close to where they work. Inability to buy a house with local wages is a common problem in the big cities of the world so it's not an issue related to your area alone.

This would certainly be true for a business where all the employees and clients are local, but doesn't have to true for a global company with fully remote jobs. If I'm providing as much value as an SF-based employee and demand a raise to 80% of SF pay, the company would be foolish to let me leave.

One thing I've learned is that companies are extremely foolish when it comes to compensation and attrition.

The average 1 bedroom apartment costs $3,060/month [1] or $36,720/year. The tax rate is high, and depending on where in the world you are, there are additional expenses such as healthcare that need to be factored in as well.

If we're only concerned with fairness in compensation, cost of living must be a factor.

[1] https://www.zumper.com/rent-research/san-francisco-ca

No. The most fair thing a for-profit company can do is pay people proportional to how much value they add to the company. If it's a lot of value you can choose to live in an expensive city. If not, you have to live somewhere cheaper.

Companies are not social services, they don't aim to offer some welfare. It's a harsh reality, but their competition is not doing them a social service either. So everyone is doing their best to find the best balance which bring them the best outcome.

Fundamentally, if they can find a replacement at a lower cost, they will. Businesses are about the bottom line. No matter what their size is. Fighting that truism will only lead you to frustration.

If that was easy for them, they wouldn't have SF-based employees in that role.

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

*people are as much in control of their religion and veteran status as their location

https://about.gitlab.com/handbook/total-rewards/compensation...

You’re essentially a tool they try to buy as cheap as possible.

Your job is to sell yourself as high as you can.

The good news is that both you and your company have freedom to choose and compete with other entities.

So the only way for you to fix motivation is not talking it through, but rather to learn winning in this free market game.

For multinationals, one thing to note is the location of the employees normally has very little to do with the talent and staff costs but mostly tax, politics/corruption, networking, or leadership preferences. Employee talent and costs are really generally not the focus of why companies setup shop where they do.

It can mess with your mind, and feel really unjust when you know of US sized bonuses going out that equate to more than full time salary in other regions doing equivalent roles. Even staff that are generally mediocre can often wing it whilst others go over and above getting a pittance.

It helps my sanity to know that we are all just cogs in a system and it’s not at all personal. Salary is a cost for doing business in some locations and everyone is completely replaceable. Also AI is probably going to wipe the floor of us all soon enough…

I don't think that's the case. For example, there are plenty of large, mutlinational companies opening offices in Poland and hiring hundreds or even thousands of devs there specifically because you can get competent people for a fraction of what they'd cost in the company's mother country. Also, of course it's important for them that Poland meets the sane baseline you'd expect from a civilized country, in terms of infrastructure, stability, rule of law etc. - but once these conditions are ok, I think it's mostly about the levels of pay. Most companies at the top levels are ruled by bean counters after all, and they're are always looking for ways to increase profit (and hence stock value) - and reducing wages is a great and easy fix for that.

In the end it turned out the whole non-US IT world is a sweatshop now. Not like it wasn't like this before, but with exposure from apps like Blind the 500 pound elephant is no longer to be ignored.

Plus, the whole crybaby about remote work being kewl is USA-driven cost/time employee savings rationale too. In Europe, remote doesn't make much sense because it's 2x times smaller than the US.

You feel like a cog in the machine because you absolutely are one.

If your job requires you to be somewhere physically, your compensation is tied to what it would cost to replace you.

In my experience employers rarely know what their Cost of Vacancy really is… let alone their Cost per Hire.

I expect this will change.

It's a relic since 20+ years. And the end result is this discussion. Prices ultimately go down, because competition is rising and companies have the power to pay less. And automation will drive it even more to the bottom.

Debunking them on HN is pointless.

The only way to debunk them is to find a job that will pay you what you think you are worth.

At least now you know the pay scales and should have an idea for what you are worth based on the work you can deliver.

Despite how flippant other commenters may be with the "bad feels" of this experience, feeling bad about being alienated from the fruits of your labor, and being, essentially, colonized by capital, is completely normal, human thing. Especially so right after discovering the extent to which your labor is valued less than that of your peers.

This sucks bad, and don't pay attention to commenters who are trying to convince you that actually it's fine because that's just the labor market. No, it's totally valid to feel bad about this.

If there is an oversupply of qualified people in your country willing to work for lower wages, that is what you are competing with, not people in the EU/US.

Although there may be some coordination, coordination isn't necessary for wages to be unrelated to value produced, because that's the default condition. It would take some impressive central planning to have wages actually match value produced.

Doctrinaire economists used to argue that value produced sets an upper bound on pay, since why would a company pay someone more than the value they produce? But there are plenty of exceptions to that, discussed for instance in David Graeber's book Bullshit Jobs.

Yep. The prices of anything (incl. price of labor) are never about the value produced alone. The delivered value only sets a ceiling on the price (i.e. no one will pay for something more than they will get out of it), but, if the commodity in question is abundant, its price may be very well below the value it creates. For example, drinking water is necessary for survival, so the value it delivers is essentially infinite (i.e. you'd give anything and everything for water if you don't have any and are dying of dehydration), but at the same time it's so abundant that its actual price is almost zero.

I loved Graeber/Wengrow's last book, transformative, need to read BS Jobs (do other yc folks read graeber? I know for instance he tears down a few points others like andreessen and horowitz take for granted as axiomatic to their ideologies based on a recent interview with them; pardon the surprise to see you reference it)

You have to think from the employer’s standpoint: if they pay you US or EU salary, why should they not just hire in those locales where it seems the company has bigger presence, or is maybe headquartered. Why would a company take the overhead of maintaining an offshore presence if there is no benefit to it.

Moreover, you are paid the local replacement cost, as in what would it cost the company to hire your replacement in your market. Unless you bring a unique value to the company you will be paid local market rate. If you are unique, then you will be paid whatever you want.

I understand the basics of economics, but I must say this pay gap is pretty disappointing for me too. Yes, I'm living in a country where the cost of living is much cheaper, but the same country is classified as "not free" by Freedom House. The only reason I still live here is to save money before I, hopefully, move to any first-world country.

I want everyone to understand that the cheap cost of living usually comes with restrictions on human rights and mental illness.

Find a role for digital nomads and make the nomadic decision to stay put while claiming higher pay.

There are probably hundrends of people with your capabilities, where you're now, willing to work at your current pay scale and probably thousands elsewhere in poorer places willing to work for much less than you. Not to mention even more - who are as capable as you're - but lack the opportunity you have because things like infrastructure (internet access for example).

On the flip-side your colleagues are probably looking at you as a saleout - depressing thier already-high (to you) wages. And yes, they're absolutely right beause beside your skill-set, the company is saving money by paying you less and in addition to having more laverage on you. Remember the outsourcing debates in the past years? Someone else is probably saying you stole their job too! What do you say to such person yourself?

Even here in America, Silicon Valley salaries can be truly shocking for some of us outside the valley. I think it's a little unfair to us smaller campanies without millions of VC money to burn but such is life. If you started a company where you're - will you be paying American salaries?

I agree with you that you shouldn't migrate to get paid the same for the same job. Hopefully as jobs become location agnostic - we can only look into the future on how the market will change and balance out the unfairness you're feeling.

From what I've gotten from my discussions on my post is

1) I will start looking for contract work. Not going to be easy, but the best way forward.

2) Use some of the negotiation techniques mentioned like bringing up the fact I'm not competing locally, but internationally

3) Negotiate with my company and threaten to leave? Not fully sure of this. More alligend to leaving anyway as I find the excuses for location based pay pathetic. Will be leaving as soon as I can.

4) Always talk compensation with co-workers

You should negotiate, but do so from a position of strength and leave emotion out of it. The reality is that location-based pay is standard. This reason for this is labor market incentives. Whatever your manager says is not reality, it's just a story to try to placate you. How defensible the story is or how angry and demotivated you are about it is absolutely meaningless in terms of outcomes, and the sooner you come to terms with that and look at the situation from a purely rational perspective the better.

What matters here is how much leverage you have. The best leverage is having an offer in hand for more money. Short of that, if you are perceived as a top performer, that could confer some leverage, but keep in mind that location-based pay is probably baked into the cost structure of the entire office. You are likely better served by a strategy to demonstrate your individual value so that your raise isn't seen as precedent for why the entire location pay scale needs to increase.

6) While contract work sometimes calls for a generalist (#1 above)... try to be a specialist by becoming an expert in a high demand field(s). At that point you can charge whatever you want regardless of your location.

7) Don't exchange your time for money - get paid for your skillset (related to #1 & #6)

1. You have more experience (why would someone pick you as a contractor?)

2. Get better at negotiation.

Your concerns are valid, but that you didn't have the answers is a signal you're not wise enough to go into the contracting world.