There are many differences between a worker in a clothing company and software engineer. Skill, education, scarcity just a few differences. It sounds wrong to say, but workers at clothing company are expendable. Meanwhile there's a constantly growing scarcity of good engineers. That's one difference.
Secondly, clothes manufacturer is not a remote work. It's work on the site. So again, I don't see how we could compare the two. It sounds like, if we really make a hyperbole out of this, everyone should be paid the same. No matter profession, no matter experience, difficulty, danger...
Thirdly, clothing companies would never be able to hire a worker from Bay Area to work in their Vietnamese branch. It would just be too expensive. Facebook, just like most of the companies, is trying to pay the employees the least amount possible so that people still work there. This is terrible. I cannot wrap my head around why would you advocate for this stance?
This, to me, really sounds like comparing apples and oranges. It doesn't make any sense.
There is nothing bad about some, let's say software engineer from Vietnam making only a fifth of what someone in London or Munich does make, as long as their cost of living is in the same or an even better relation to their income. I know at least one country in Eastern Europe where developers working as freelancers only have to pay an income tax of 5%. I am at up to 51% here in Germany. That's a lot of room to compete with me on the price, assuming the same quality of service.
I imagine that one long-term result of the remote-working trend is some degree of "evening out" of these factors anyway. If remote work means that fewer professionals have a reason to be in expensive cities like San Francisco, house prices in SF should be driven down by reduced demand. The converse is that if cheaper cities see an influx of highly-skilled remote workers pulling high salaries from elsewhere, their own cost of living should be driven up.
Or at least, that's the theory. It's not like the ultimate result will be for every city to cost the same, because there are zillions of other factors that affect CoL, and there will always be lots of jobs that can't be done remotely.
There are going to be losers as well as winners in this shift. More opportunities for middle-class people to work remotely means fewer opportunities for working-class people to make a living as cleaners, security, cafeteria staff, other roles that help offices stay open. What are those people going to do when the offices close down?
Comparing USA wages against countries that pay slave wages and take advantage of their work force isn't a very good base to use. Lets uplift everyone....
Haven't seen this argument but it made me curious- is it possible that they are lowering salaries to attract workers who care about the company and less about the comp? I think Facebook is past the stage of being cool and is moving into the IBM years. I assume there are many reasons they are doing it, rather than a single one, even if a single reason supersedes the others.
Buying a product is same as hiring software engineers? You don’t buy a product because you think a 100 USD shirt is worth it basis the location of the factory or workers. You evaluate basis the value it gives you e.g. quality, durability, style. You can draw the parallel with hiring engineers till this point, both are priced basis the value they provide. But the product gets sold a bit cheaper if you can reduce the cost to produce it. That is how mass scale productions become cheaper. Same logic doesn’t apply with engineers. You don’t see how much cost went into making that engineer. He might have got an expensive degree, spent a lot on education, you don’t care. You won’t hire him if he is mediocre. So this comparison is ridiculous. If quality engineers can be mass produced, the salary they draw will reduce. But that’s a supply-demand scenario. I feel people should stop making sensational posts without putting much thought to it.
One counter point to this and a lot of the comments is that at least some tech companies do have a moral backbone and aren’t afraid to pioneer a more just system. Granted, the number of such companies has dwindled, and the moral backbone of those that remain has softened, but it’s still vaguely there... Especially if the tech workers within those companies put enough pressure from within. Perhaps that’ll be something the new tech unions can push for, we’ll see.
It really does come down to a simple equation, employers will reduce the salary of anyone they can if they believe (true or not) that they can just replace you with someone that will provide equal value, that also applies in other hidden ways when native citizens are simply replaced by foreign imports that employers see as equal replacements at lower costs. The only way that this topic of location based pay will be resolved is by reducing the supply of cheap labor, whether through domestic import of artificial supply (i.e., immigration) or by outsourcing to foreign supply. As long as the supply is easily inflated, the location pay question will NEVER be fair. As stated, as long as companies can do it, they will pay whatever they can get away with and as long as they keep people believing that artificial inflation of supply, i.e., what they falsely pose as "diversity" and "immigration" and as positive things, it will always remain a buyers/employers/billionaires' market and they will dictate where you will live and what you will do with your life.
In general, you are paid what it would cost to replace you. What you are worth to the company is an upper-bound, but not a lower one. Employee location makes a difference to salaries only in that it opens a larger pool of people who are able to replace you, which drops the price you can charge.
Why pay more for people located local to the company office? Well, if the company feels there is no difference, then expect salaries to drop radically as the pool of replacements becomes everyone in the US, and then again when it the pool of replacements are the entire world.
I think the main hope for keeping SF-style salaries are (1) being local turns out to be important to productivity and (2) that most of the highly skilled programmers have already immigrated to California, so there simply aren't that many possible replacements in the rest of the world.
I don't really believe (2), and (1) may be less of an issue that being able to halve your salary costs.
This feels ultimately like a supply and demand issue. If enough skilled workers leave the Bay Area and refuse to take a lesser salary, eventually companies will have to pay fair(er) rates or lose access to the talent. That said, I completely agree about being careful what you wish once. Once companies know they must look for talent elsewhere, they won't just be looking for the Bay Area ex-pat, the whole world becomes an option.
Remote freelancer here.
There are many differences between a worker in a clothing company and software engineer. Skill, education, scarcity just a few differences. It sounds wrong to say, but workers at clothing company are expendable. Meanwhile there's a constantly growing scarcity of good engineers. That's one difference.
Secondly, clothes manufacturer is not a remote work. It's work on the site. So again, I don't see how we could compare the two. It sounds like, if we really make a hyperbole out of this, everyone should be paid the same. No matter profession, no matter experience, difficulty, danger...
Thirdly, clothing companies would never be able to hire a worker from Bay Area to work in their Vietnamese branch. It would just be too expensive. Facebook, just like most of the companies, is trying to pay the employees the least amount possible so that people still work there. This is terrible. I cannot wrap my head around why would you advocate for this stance?
This, to me, really sounds like comparing apples and oranges. It doesn't make any sense.
I think the fundamental underlying principle is that of opportunity cost: https://en.wikipedia.org/wiki/Opportunity_cost
There is nothing bad about some, let's say software engineer from Vietnam making only a fifth of what someone in London or Munich does make, as long as their cost of living is in the same or an even better relation to their income. I know at least one country in Eastern Europe where developers working as freelancers only have to pay an income tax of 5%. I am at up to 51% here in Germany. That's a lot of room to compete with me on the price, assuming the same quality of service.
Yep, it's a complicated issue.
I imagine that one long-term result of the remote-working trend is some degree of "evening out" of these factors anyway. If remote work means that fewer professionals have a reason to be in expensive cities like San Francisco, house prices in SF should be driven down by reduced demand. The converse is that if cheaper cities see an influx of highly-skilled remote workers pulling high salaries from elsewhere, their own cost of living should be driven up.
Or at least, that's the theory. It's not like the ultimate result will be for every city to cost the same, because there are zillions of other factors that affect CoL, and there will always be lots of jobs that can't be done remotely.
There are going to be losers as well as winners in this shift. More opportunities for middle-class people to work remotely means fewer opportunities for working-class people to make a living as cleaners, security, cafeteria staff, other roles that help offices stay open. What are those people going to do when the offices close down?
Comparing USA wages against countries that pay slave wages and take advantage of their work force isn't a very good base to use. Lets uplift everyone....
Haven't seen this argument but it made me curious- is it possible that they are lowering salaries to attract workers who care about the company and less about the comp? I think Facebook is past the stage of being cool and is moving into the IBM years. I assume there are many reasons they are doing it, rather than a single one, even if a single reason supersedes the others.
Buying a product is same as hiring software engineers? You don’t buy a product because you think a 100 USD shirt is worth it basis the location of the factory or workers. You evaluate basis the value it gives you e.g. quality, durability, style. You can draw the parallel with hiring engineers till this point, both are priced basis the value they provide. But the product gets sold a bit cheaper if you can reduce the cost to produce it. That is how mass scale productions become cheaper. Same logic doesn’t apply with engineers. You don’t see how much cost went into making that engineer. He might have got an expensive degree, spent a lot on education, you don’t care. You won’t hire him if he is mediocre. So this comparison is ridiculous. If quality engineers can be mass produced, the salary they draw will reduce. But that’s a supply-demand scenario. I feel people should stop making sensational posts without putting much thought to it.
One counter point to this and a lot of the comments is that at least some tech companies do have a moral backbone and aren’t afraid to pioneer a more just system. Granted, the number of such companies has dwindled, and the moral backbone of those that remain has softened, but it’s still vaguely there... Especially if the tech workers within those companies put enough pressure from within. Perhaps that’ll be something the new tech unions can push for, we’ll see.
It really does come down to a simple equation, employers will reduce the salary of anyone they can if they believe (true or not) that they can just replace you with someone that will provide equal value, that also applies in other hidden ways when native citizens are simply replaced by foreign imports that employers see as equal replacements at lower costs. The only way that this topic of location based pay will be resolved is by reducing the supply of cheap labor, whether through domestic import of artificial supply (i.e., immigration) or by outsourcing to foreign supply. As long as the supply is easily inflated, the location pay question will NEVER be fair. As stated, as long as companies can do it, they will pay whatever they can get away with and as long as they keep people believing that artificial inflation of supply, i.e., what they falsely pose as "diversity" and "immigration" and as positive things, it will always remain a buyers/employers/billionaires' market and they will dictate where you will live and what you will do with your life.
In general, you are paid what it would cost to replace you. What you are worth to the company is an upper-bound, but not a lower one. Employee location makes a difference to salaries only in that it opens a larger pool of people who are able to replace you, which drops the price you can charge.
Why pay more for people located local to the company office? Well, if the company feels there is no difference, then expect salaries to drop radically as the pool of replacements becomes everyone in the US, and then again when it the pool of replacements are the entire world.
I think the main hope for keeping SF-style salaries are (1) being local turns out to be important to productivity and (2) that most of the highly skilled programmers have already immigrated to California, so there simply aren't that many possible replacements in the rest of the world.
I don't really believe (2), and (1) may be less of an issue that being able to halve your salary costs.
This feels ultimately like a supply and demand issue. If enough skilled workers leave the Bay Area and refuse to take a lesser salary, eventually companies will have to pay fair(er) rates or lose access to the talent. That said, I completely agree about being careful what you wish once. Once companies know they must look for talent elsewhere, they won't just be looking for the Bay Area ex-pat, the whole world becomes an option.