> when the same talent can live outside of the bay area and can do with 1/3rd of the salary

What makes you think this is true and not just a post-hoc rationalization? Let me put it this way: offer that salary worldwide and you will still have difficulty finding top-tier talent, as many remote-first companies are finding out the hard way. Having been a hiring manager in such a position before, I will tell you that you are still competing against every other remote tech company to find and hire from the same global talent pool.

Secondly, you're not accounting for communication ease and timezone differences. A huge amount of the world is cut out if you optimize for remote candidates within +-1-3 TZs.

Finally, the assertion that the average valley firm doesn't need a $200k+ in 2020 USD terms engineer is also not necessarily true. Demand for senior talent is significantly higher than for mid range and junior talent, because mid-large size firms want it (to bolster their senior roster and make it easier for teams to subdivide), and small firms absolutely need it (they simply do not have a senior engineer and need at least one).

The current gig I've got, if they'd had a senior engineer - even as an advisor - from the outset, basically the last ~8 mo of work split between myself and a different senior engineer would have been unnecessary.

I wasn’t asserting or claiming one way or the other. I’m asking the question. Your response assumes some stance I might have - I don’t. I found your response pretty unpleasant and combative even though there is truth in what you’re saying.

> I wasn’t asserting or claiming one way or the other.

You verbatim asked "why pay $200k for a software engineer same talent can live outside of the bay area and can do with 1/3rd of the salary" and you got a response. If you think there's truth in what I'm saying but find that response "unpleasant and combative", I have two suggestions for you:

1. Communicate more clearly. If you are meaning to express an argument rhetorically or as a "devil's advocate" but it's easy to misinterpret your statement as if you simply support it, consider rewriting your comment for clarity.

2. Rethink your premises. If you actually do believe what it is you're saying, consider that you're the argument of "same talent for 1/3rd of the price" is the original offshoring argument, which has well known conceptual issues.

If you're more thoughtful about checking your assumptions when you could be wrong, it will be much less likely that you end up in a situation where you find yourself saying "Gee, I found so and so's response unpleasant and combative, even though there is truth in what you're saying." If you put your hand on the stove, do you criticize the stove, or do you realize that maybe it was a mistake to put your hand there and then move it away?

I accept the first suggestion - yep, should have be more clear. I reject the second one - now that's just pedantry.

My feedback is to learn how to write in third-person grammar [1]. It is one of the most important skills in effective communication and it puts the issue at the forefront.

[1] https://www.grammarly.com/blog/first-second-and-third-person...

If you only meant the statement as a rhetorical device or devil's advocate then the second part doesn't really apply to you. For what it's worth, I do think there's value there, so here's how I would have phrased that statement if you're curious:

"The question I have is what portion of the $200k salary is 1) due to the raw talent of the individual 2) because they live in the bay area. From a company's POV, if they have to pay a 2x premium for the local talent, what are they getting for that price, if anything?"

First of all, I switched around the order so you're leading with your priors. This sequence makes it clear that the statement "what portion of the $200k salary is 1) due to the raw talent of the individual 2) because they live in the bay area" is not your conclusion, but your starting point. I phrase the second sentence that way rather than "same for 1/3rd of the price" because it focuses on why people are _already_ paying the extra money when they could buy the cheaper "substitute" product rather than leaving unquestioned the presumption that the two are substitutable.

Sorry if this advice is unwarranted, but given that you've clarified what your intentions were from your post, I think the underlying curiosity is still pretty valuable, and I believe it's worth exploring. I would just personally take a different stylistic approach as described to explore it.

If this were true, remote positions would pay just as well as the highest paid places in the US, but they generally don’t, because they don’t have to.

It’s only difficult to hire developers anywhere because you don’t want to pay what it would cost to get a yes.

Remote positions are not monolithic. Some are highly selective and highly compensated. Others are the opposite. If you're looking at a random cross section of the global remote opportunity pool, you're likely going to see reversion to mean that reflects that.

Upvoted because you ask a great question. I'm just speculating here, but here are a couple points for further questioning:

1) How many people transfer to rather than from the Europe or India office? I'd wager that it's mostly in one direction, which is towards the higher wages.

2) Are RSU grants are adjusted downwards after the transfer? I believe the answer is no. Which means that the total package is not decreasing significantly until cliff.

3) What's the pre-existing financial situation for folks that move towards a lower CoL area? If you've already made a significant enough amount of earnings in the US that you could survive off of them in your destination, the base salary is going to matter a lot less.

4) Is there lateral incentivization in terms of trajectory? If you get to start a new office in a different country (or head a new team or something along those lines), the clout you develop long term may be enough to balance out the temporary salary loss, as when you return back to your origin country, you could have leveled up substantially and retain your level. You're effectively engaging in arbitrage here.

Suffice to say, I don't have a great answer, but I will note that this is a pretty specific exception, enough to make me repeat that platitude that "it's the exception that proves the rule."

Isn't this a win-win-win though? Salaries become more normalized across the country so people can work from where they choose, SF rents will go down as techies start streaming out of the Bay Area, hiring pools for companies become inclusive of people who don't want to move to the Bay Area (or the other 2-3 tech cities). The rest of the country also certainly doesn't pay 1/3rd of your salary.

Will people start streaming out of the Bay Area, though? The thing that always interested me about the Bay Area was that my friends in Mountain View would be posting long bike rides throughout the winter. Where it's snowy and below freezing in New York, it's 55 degrees and sunny there. I imagine people like that a lot, and is part of the reason it's a popular place to live.

There are other places in the US that are warm in the winter, of course, but less of them are also nice in the summer. Then among those, very few of them match the Bay Area in friendliness to things like LGBT causes.

I have a feeling that many people will continue gravitating to the Bay Area.

Is the Bay Area unique in the US for being progressive, relatively walkable/bikeable, and having great weather?

This is a sincere question, by the way. (It's also a practical one - I just accepted a fully remote position, and I'd move to the Bay Area in a heartbeat if it weren't so expensive.)

I think its too progressive where you cannot be a centrist or people will look at you like they look at centrists in alabama.

Bay area has one of the most closed minded people when it comes to politics. Jack Dorsey (Twitter CEO) talked about it in his interviews with Joe Rogan and such - how do we make sure that voices across the spectrum are represented on Twitter and just not what silicon valley thinks is acceptable? There is definitely bias.

I don't want to open a can of worms, but I personally don't like living in the bay area.

People who think you can't be a centrist in SF or Alabama spend too much time on Twitter.

If by unique you mean in the vast minority, yes, if the only one, then no. Bay Area isn’t really walkable as it’s really vast. Mostly just San Francisco.

If you remove the requirement of having to commute into the Bay Area, finding a place where you can bike every day of the year just becomes even easier. The American Southwest probably has a dozen places that are LGBT friendly and you can bike all year in beautiful nature. For half or less rent.

If it's anything like Seattle, there are great and beautiful communities a few hours away - you get the same weather and even better nature but it's too far to commute. And they're a lot cheaper.

Personally I like the weather of the pacific northwest, but many people from California will tell you it rains too much.

Seattle is also as expensive as New York and the Bay Area.

As a Canadian who moved to Palo Alto 10 years ago - this is the real answer! I love biking in the 'winter'

But isn't the rest of the world coming around on LGBT causes as well, and that you don't have to live in NYC or SF for LGBT friendliness? So I think most cities with decent weather is viable.

I wfh and I won't work for a company that bases my pay on my zipcode (Gitlab). I want complete flexibility on where I live. There are plenty of remote companies that don't do that, especially now post-covid.

I wish more people would reject zip code COL so that companies starting to WFH don't just take Gitlabs idea of it.

I'm with you. GitLab would be near the top of my employer targets if not for their bizarre location-based salaries. I want a remote-work job in large part so that I can move around. I relocate every 2-3 years, all over the US and internationally. If I get hired in the NYC area I'm not willing to take a 50% paycut because I want to spend a year living somewhere else.

Their calculations and reasoning are completely irrational. Rent is more a lot more in NYC, but utilities are the same; medical costs are the same; groceries are roughly the same (I found them cheaper in Manhattan than in nearby suburbs); you don't own a car (or two, as a couple); you don't have the expense of maintaining a large home and yard; etc. It costs a lot to live in NYC, but you can't compare the rent on a 1BR NYC apartment with a 1BR suburban apartment and say it's three times as expensive. It's a completely different lifestyle, and the choice for people like me is between a shoebox in the city with the perks of city life, or a comfortable 3BR home with a yard in the suburbs and a car and maybe a swimming pool or a boat or something. It's not a cheaper life, it's just a different life.

Is this a popular thing inside of gitlab? Personally, I'm conflicted: it's an interesting experiment, and I get where it comes from, but it's perhaps a bit too nearsighted.

In the end, I think zipcode (and COL) is a weak proxy for talent. It's very easy to measure zipcode, compared to talent.

But, think about it from the other angle: if you have a history of this talent (earning high salaries in high-COL zip codes or otherwise), why on earth would you accept anything less than that, when moving to a lower COL area?

To me, it seems like a decision that would hurt the employer more than help them, since the people with proven talent would work for companies that don't discriminate on zip codes. And that costs more than the investment in assessing incoming talent levels.

Gitlabs salaries are historically low compared to what I'd expect, but their talent is also much more global than a lot of big tech corps so while you won't find someone from CA expecting a "high" CA salary there you'll find a lot of great global talent that probably has a more difficult time working at a $big_name since they might not have offices in their country.

None of the salaries I've seen there seem remotely "senior/architect" level if you want Bay/WA talent.

That's the way I see the company, at least.

I'm glad you are principled. Get paid what you're worth folks!

All this might change if there are enough candidates that have become suitable now there is a WFH policy in place.

Wait, so you can move to a super expensive place and the company will subsidize your mortgage investment?

My company generates revenue and my talent directly affects the revenue. The salary that you give me is correlated to that revenue that I help to generate. The company figured out my value when they made me an offer.

My location during any of this transaction bears absolutely zero significance. If I'm worth $300k to generate $5mill for you don't worry about whether I'm living in NYC or on a ranch in Wyoming.

If you're willing to take $60k for a remote job you can make $160k at because that's the actual global market value you're doing all of us in the field a disservice by working for the low COL wage. It's bad enough salaries have barely risen for other fields since the 70s. Our field can work anywhere but we need to make sure we don't let our salaries slide by letting the Gitlab style take hold.

Often on hn I see people thinking they need to take a pay cut to work remotely. You don't! Same thing.

Agree 100%. Same employee, working remotely, but they move somewhere else? Great, we pay them less even though it affects their performance in no way at all. Makes sense /s

When I was looking for remote work I had hard time finding any offer beyond 60k.

Don't forget that there's a really high competition among applicants so someone will take those 60k offers. And when it's 8-10x their average salary in their home country, then you can't really blame them.

I live in Barcelona which is almost on par with Madrid. My plan for my next job is to get a remote job with Barcelona salary, then move to Canary Islands which is much cheaper but way nicer.

I'm not really serious, I can probably get a better offer from a US company, but it still irks me.

I'd also imagine remote employees are cheaper anyways because they don't require office space.

Yep. Gitlab's salary formula is publicly available. You can go take a look. I'm currently in the bay area, but I would love to permanently move to Southern Oregon (where I already own a house). Gitlab's salary is normalized to the bay area (i.e. the bay area gets a 1x multiplier). If I wanted to do the exact same job from Oregon, my hypothetical salary at Gitlab would arbitrarily get multiplied by 0.6x... and that's why I'm never going to apply to Gitlab.

I think you have things the wrong way around. If you are able to pass the interview bar for a selective company that pays market rate in a tier-1 tech city, then yes, you get to move. But, if you don't, you won't get the job whether you move there or not.

No they're saying for a Gitlab employee moving to a higher COL area is essentially getting gitlab to pay for the mortgage (assuming the higher wage actually covers the increased mortgage of course).

Adjusting by CoL is only good for the employer, if a worker is worth X working remote in SF they're worth the same amount in the middle of nowhere.

Yeah I get it, I just don't buy it. Move to a higher COL area, and you tend to get access to a market with expanded labor demand. So, it's $HIGHER_COL_MARKET_EMPLOYER (or $HIGHER_COL_MARKET if you catch my drift) increases your wages which pays for your mortgage.

But the competition tends to be fiercer in a higher COL area, so you are still not guaranteed even a median pay job in that area if you cannot get it. Many do not. The "higher COL area = higher pay" equation seems magical except it hides that it also includes higher competition.

But we're specifically talking about someone who already has a job at Gitlab here and how the CoL adjustment affects them and the weird situation it creates, so the competitiveness doesn't really matter, they've already got the job.

> But we're specifically talking about someone who already has a job at Gitlab here and how the CoL adjustment affects them and the weird situation it creates, so the competitiveness doesn't really matter, they've already got the job.

Of course the competitiveness matters. It informs the level of optionality and leverage they have to negotiate. I would say that it's the only thing that matters. What about the CoL adjustment is weird besides it being reflective of the somewhat ugly and distasteful truth that to the company, you are a human resource and fungible cog? That's what they're paying for.

This employee will have to think about what happens if they do not come to a favorable agreement with their employer. Their BATNA completely depends on 1) the demand of other firms in the area (or remotely) and 2) their relative ability to compete. If they can perform well enough to move to a competing employer in the same locale that pays better, they will.

>There are plenty of remote companies that don't do that

Care to name some?

This is a good list and lets you know if they're globally competitive or not. I'm not sure how much it's been maintained since covid so ymmv; https://github.com/yanirs/established-remote

I work for places that pay me for what I'm worth, I don't work for places that pay me based on where I live.

I'm not cranking out code that is somehow less effective while living in the NW England, and so to pay me less than someone else is downright insulting.

I also, to be clear, don't have any hard feelings about people who live in even cheaper[0] places than me, it's their choice. I used to work with a guy in the Phillipines who was on the same as me. Good for him!

[0] It's not that cheap in the NW England. It's clearly not SF, NY or London, but it's not cheap.

How do I find a job that pays me top dollar independent of where I live? I'm a software engineer in a lower cost of living area of the US and I've considered moving to the bay area because wages stagnate here pretty early on in your career, and are generally far lower than in other areas of the world.

I can tell you how I think I did it.

- Work hard

Reputation is a thing. You don't have to kill yourself, but the industry isn't that big, so getting a reputation for being a slacker isn't going to help.

- Be a nice guy/gal

This can be a reputation thing too. No-one that is worth hanging out with expects you to drink, or stay out late if you don't want to, but the more you get to know people and the more pleasant to be around as a person you are the more likely you are to succeed. Meeting people if you can (conferences, meetups etc.) and convincing them that you are a nice person (bonus points if you are) can kinda remove the first stage of interview.

An ex co-worker invited me and a friend round for dinner a couple of years back while we were travelling. It wasn't some polo-shirts-tucked-into-slacks and golf networking type thing, he just did it out of the kindness of his heart. I remember that, it's good for people to remember you like that too.

- Convince people you are smart

Being smart is one thing, but you have to market yourself too. Don't be obnoxious about it, but don't hide it away. This can be anything from emailing/slacking the company "Hey, check out this cool thing I did that you might be interested in" to just chipping intelligently (but respectfully, see the nice thing) in conversations/meetings. Going to conferences and talking intelligently to people about stuff helps, or the harder route, contributing towards open source. "I have three rails commits" a lot more impressive than "I have no rails commits" (if you're into Rails, check out the Rails github issue tracker, you can literally create PRs and get them merged).

- Take an interest in people, and listen

Even if it's hard, like it is for me.

- Focus your attention in the right places.

Like on upcoming or hard to hire for technologies that smart people are starting to use but that aren't ubiquitous yet. No-one with a "bums on seats" mindset is going to consider a remote PHP or JS dev if they tripped over 5 walking from their car to the office that morning. For me this was Rails. It's still hard to hire Rails devs and that means that companies are having to consider remote people, and the wages are good.

Go is another wave. Popular, used by some smart people, hard to hire for. There are others I'm sure.

- Apply anyway

Just like it's totally possible to get a job that asks for a degree when you don't have one (my first job ever for instance), you can apply for jobs that don't allow remote then ask to work remote. Let them tell you no if they want (don't get too invested of course), but I've worked at companies that have tried to fill spots for over a year, good developers for a lot of technologies are hard to find, and at a certain point companies that aren't friendly to remote working, with the right candidate right there, but who wants to work remotely might just re-consider.

- Apply to companies that are remote

Gitlab famously pays location based wages, but might actually be a decent stepping stone to somewhere else. Shopify does remote, I don't know if they do location based wages. Basecamp pays SF rates. You can apply to all these places, and maybe be rejected, but then apply again in the future. I know that there's at least one person who didn't get into Basecamp on the first application.

- Meet people, if possible

It helps that when people see your CV they think "Oh hey, I remember ngngngng, they talked intelligently about threads vs processes at that conf". If you're shy, that's tough and you'll need to work round it. I was shy and worked round it, so it was possible for at least me.

- Become a contractor/consultant

You need skills that you can market to a company (I do Rails performance/scaling and upgrade consultancy, I made someone's controller in the critical path 1500 times faster and orders of magnitude smaller the other day, that's good marketing).

You also need to market yourself. Reputation helps, but then so does a website that tells people how much you've helped other people in the past.

- Once you are there

Make sure to tell people about your successes. If you're working at a company that is not fully remote this is even more important. "Hey peeps, I thought you might be interested in this thing I did" again.

- Have an idea where you want to be in 6 months, 1 year, 2 years, 5 years.

Mostly this is about not letting yourself get stuck in a rut rather than having a fixed plan. Don't let yourself get used to the grind.

- I don't know, maybe do move to the Bay area

Are you young and single with no kids? It might not be a bad move. It could be a stepping stone. I have visited SF a few times and loved it, but then each to their own :)

Once again, this is I think what I did and I think what worked for me. It's all cumulative though, and I'm 40 now, and starting the local Ruby user group maybe 13 years ago was a long time ago, and a distant first step on the path to where I am now.

> I work for places that pay me for what I'm worth, I don't work for places that pay me based on where I live.

That is very short sighted. Your dollar value is highly dependent on where you live, that's just reality.

Two things here.

1. That is very short sighted.

Short sighted? You mean, the area-independent wages I've been earning for the last 10 years or so are going to stop? I can't see that happening, if that's what you mean.

2. Your dollar value is highly dependent on where you live, that's just reality.

Only if I am doing something that requires me to be in a certain place, because that's where the value is created. There is a local market for drywall fitting in SF, and there is one in Bunghole, Montana. You can't make the CA rates in MT because you can't provide the value in CA while still being in MT.

As a programmer though, I can provide value wherever it is needed from pretty much anywhere I want to be. I'm not providing value in my house, here in England, I'm providing the value at the place I work for.

It's for this reason that I'd fully expect to be able to charge Polish rates to a Polish company, and SF rates to an SF company.

I think you're missing the context here, we're talking about remote positions. Maybe what the company expect to pay depends on where the company's HQ is, if they have one, that kind of makes sense. But the company's cost for an employee shouldn't take the location of the (remote) employee into account because that has nothing to do with the hiring/work whatsoever.

Yeah, I think that's partly my fault, I didn't go into enough detail.

If I applied for a job/contract in Poland for instance, I'm not going to stamp my foot and throw a tantrum because they won't pay me SF rates. I'd expect them to offer me Polish rates. I also wouldn't expect them to pay me NW England rates (which are likely much higher).

I've had a related thought: is it ethical to pay a person less based purely on where they live? I understand that there are different cost of living factors for different places, but that's on the employee's side and should be none of the employer's business. If they employer can pay $200k/yr for a remote employee, it shouldn't matter where they live, and so scaling that value seems discriminatory to me.

Anyone have thoughts about this?

> If they employer can pay $200k/yr for a remote employee

It's interesting that folks envisioning a globally uniform payscale tend to posit SF salaries in Hanoi rather than Hanoi salaries in SF.

Not really. I think we just assume that the situations where housing can't keep up with employment would shift the `income minus necessities` equation in our favor, making the massive assumption that we're willing to move somewhere cheap, or that enough other people are willing to move somewhere cheap, or just not move here in the first place. If the necessity of commuting to SF goes away, SF housing prices are less impacted, so it's more like Portland salaries in SF, and closer-to-Portland cost of living in SF.

Fair point. I was just copying the parent post's number. Likely it would be somewhere in between, as you seem to suggest.

Yeah, these guys are going to get slapped back into reality so hard if this WFH thing really takes off.

The US Government, normally a very conservative org, has cost of living increases for federal workers and (I think) military service members. Based on that, I think it's pretty well accepted (perhaps incorrectly!) that it is ethical.

Or maybe practical beats ethical.

What if we took that thinking and turned it around:

The minimum wage for a McDonalds cashier in NYC is $15/hour.

McDonalds also operates in India, and hires cashiers that do essentially the same work. If the employe was able to pay $15/hour for the same type of work in NYC, then shouldn't they pay the Indian cashier INR 1,125 / hour? Or what about the other way around, why shouldn't the NYC cashier get paid at the Indian cost-of-living?

And forget wages, how about the cost of goods and services? A 4BR house in Columbus, OH can cost about $300,000 — but the same house might cost about $3M in Palo Alto. Is this unfair / discriminatory? The house itself might be identical.

I disagree with both of those examples because the physical location of the job/house is the important factor affecting the cost. In the McDonalds example, the physical restaurant is embedded in the community and partakes in the market forces of that physical location. In the house example, same thing, the physical house is embedded in the community and partakes market forces derived from the demand of others wanting to live in that community. The location of the job or asset affects its value.

However, in remote work, this is no longer true to the degree of other jobs (disregarding regional taxes, paperwork, etc). The job can exist anywhere and the value derived from it (all else being equal, like worker quality, etc) does not change.

> In the McDonalds example, the physical restaurant is embedded in the community and partakes in the market forces of that physical location

Wouldn't this be true of remote software engineer jobs too? Market forces would drive wages downward. If you live in Minnesota and demand SF-salary, your neighbor (who is similarly qualified) might accept a lower salary, and their neighbor might accept an even lower salary, etc until you find the local market equilibrium.

Are you suggesting that that's unjust?

The difference is that the equilibrium reached from SF-based neighbors undercutting eachother, would be different from the equilibrium reached from Minnesota-based neighbors undercutting eachother, for the same job and qualifications.

Yes, and?

The net result of that is that software engineers in Minnesota get paid lower than software engineers in SF.

My question is: how is this unjust? By your own argument, the difference in salaries for physical cashiers across the globe can be attributed to market forces. I'm making the same argument re: remote software engineer salaries.

I don't know that it is or is not unjust. I am suspecting that it is because the employer has an information advantage (knowledge of the employee's location) granted implicitly by government regulation (employment paperwork). It is not normal market forces. This information advantage doesn't exist in the same way for non-remote work.

That's not really an information advantage — the employer can demand that information even without the need for employment paperwork (ignoring the impracticality of that for argument's sake). An employer has an interest in knowing in which time zone their remote employee is situated. If there is onsite work to be done with clients in different geographies, knowledge of where employees live so as to be able to efficiently deploy them is also another use case. And finally, the employer can simply demand that the employee divulge that information through negotiation leverage — the same way that they can force an employee to divulge their name.

Also, this argument can be used the other way around. Why should an employee know what the employer's finances are? Perhaps the employer has the raw ability to pay an employee more (even if it's not economically expedient), but why should the employee know this? Why should the employee know where the employer is physically situated?

In every market, the employee and employer both have information on where the other is situated and how much they are able to pay / receive. That's not really information asymmetry.

Also, at this point, remote software engineer salaries are some of the most well published in the industry, though there is definitely room for improvement in salary transparency. All that being said, I don't think you can convincingly argue that ALL remote software engineers ought to be paid exactly the same, regardless of their local cost of living. They can certainly try to negotiate their wages up, but there will also be downward pressure on wages if the labor market is loose enough.

I disagree with the idea that an employer can demand information that the state does not require. If an employer asks for salary history, a candidate can simply tactfully say "no," and walk away if necessary. Saying no doesn't preclude working there (except in how it may agitate the negotiator). Where a candidate lives is not something you can convince the employer to negotiate without, because the state requires that information. You cannot have the job without revealing it. So I still think it's different.

Just playing devils advocate: is it ethical to pay someone SF salary despite them living in a third world country where they are essentially richer than kings and can wreak havoc on the economy/culture if they themselves aren't ethical (paying off government, etc). Salary is not a number, its a "standard of living". But paying two engineers in two different zip codes the same number, you are technically paying the person in the cheaper location more. They have a much higher "standard of living".

My main PoV for this is it doesn't particularly matter to the business where the employee is if they're working 100% remote, they're getting the same value out of the same employee regardless of where they happen to live. Trying to judge how much a salary is worth to the person just lets businesses justify getting similar value for lower cost when they're already coming out way ahead.

> is it ethical to pay a person less based purely on where they live?

It's not just rent/mortgage price differences, there are also different laws regarding taxation, healthcare and retirement.

On the other hand you can't offer someone in the Bay Area a Eastern Europe level salary. Nobody would come, but you can offer a slightly higher than average salary in E.E. and they would definitely come. It's just that a global company needs to hire in both regions to be competitive.

I would be inclined to agree with you if your residence wasn't information you were required to give to your employer. It takes the normal market negotiations out of the equation.

It's like if your rent was information you were required to give to your employer. They could then make lower offers to people with lower rent, because the market conditions are now warped in favor of the employer.

I live in Atlanta and make over $200k total comp. As do my coworkers.

I think your perception about salaries outside of the valley is skewed.

no offense intended, but how does that compare the an equivalent position in the valley? The point is not so helpful without the reference.

For example, are you equivalent to a L3 with 0 years of experience at google making 200K, or an L6 with 10 years experience making 600k?

You can make far, far more than $200k in the bay area. An E6 at Facebook (not an extremely senior position) can make $600k+.

Looking at the disparity of incomes of tech workers across regions, makes it abundantly clear that wages would be 50% lower if they could hire anywhere in the country, and probably 80% lower if they could hire anywhere in the world.

We've all worked with highly qualified offshore resources (as well as many bad ones). Do they really deserve that 20k salary when we're making high six figures?

I've started hiring abroad. It's a different form of management, sure, but you absolutely beat the return on investment.

My advice is to try to stick with the same timezone, and the same language (or roughly anyway).

> Then why pay $200k for a software engineer in the valley when the same talent can live outside of the bay area and can do with 1/3rd of the salary

That is a pretty ridiculous assertion. Rent and taxes are higher but they are not $130k/year higher.

You can even save >$70k of the $200k you make in the bay area without being exceptionally frugal, which you obviously can't do if you're making $70k/year.

If i can work remote at facebook for 200k or work remote at google for 210k who would I pick? Salaries I expect would dip slightly as the pool of engineers grows then go back up as it gets more competitive. Salaries would only go down if the supply of jobs goes down. I don't think that happens in the short term.

Regarding raw talent, didn't Google, Apple, etc. form a cartel a while back to suppress the wages of engineers? I highly doubt wages are tightly bound to value output.

In my own experience throughout my career I've been both severely overpaid and underpaid relative to my economic impact.

There's an interesting theory about this based on game theory.

https://en.wikipedia.org/wiki/Shapiro%E2%80%93Stiglitz_theor...

Bingo! I often talk about how you can rent a 3BR apartment in my home town (Nowhere, Michigan) for like $900. This is true -- I've verified it recently. The drawback is that you have to live in my home town.

I can certainly see companies wanting to pay less based on CoL simply to make the bottom line better. Given the way capitalism works, I'd say this is a near inevitability. The end result will probably be that the big tech companies are going to start "offshoring" work to the Midwest, and other low to very low cost of living areas. ("We'll pay you $70k per year, but you can live wherever you want in the US!")

I can't see this being good for employees, because there are significant benefits to living in a place like NYC or the Bay Area, and those benefits would be lost if people had to live in the middle of nowhere to make it worthwhile.

> I can't see this being good for employees...

... that want to live in NYC or SF. For everyone else, who doesn't want to live in places like that, this is awesome. (And that's a word I never use)

Is it awesome? It raises the cost of everything everywhere else (because for the majority of young, educated people there aren't _that_ many desirable cities). We are already seeing that in places like Austin or Colorado.

"Desirable cities" for me, as a 30-year-old software engineer, include Brevard, North Carolina and Dahlonega, Georgia. Notably, that list does not include New York City, Los Angeles, and definitely doesn't include San Francisco (I'd quit a job if it required me to move there, without a second thought).

"Desirable" is a multivariate subjective assessment, not an objective trait (or even a mostly-consensus one).

One of the best DBAs I've had the pleasure of working with would, from what I've gathered, prefer to be in a boat on a lake somewhere in rural Alabama than to be in many of the major "tech hub cities". Being a software engineer doesn't mean you have the same opinions as other software engineers (as a quick search of programming language trends might show, at least on a superficial level).

There aren't enough people employed in tech for their escape from SF to raise cost of living meaningfully across the globe. There are enough places to live in (with no shortage of real estate), so bring it on.

And I think there'll be more desirable cities to live in in the future if remote work becomes the norm across fields where it is possible. People will start to liven up locations that nobody would otherwise look at as long as the jobs aren't there.

Do you know why there are enough places to live? Because nobody wants to live there. That's why you can buy a 4BR house in Allamakee County for $115k: https://www.realtor.com/realestateandhomes-detail/304-Highwa...

And, yes, maybe there are not enough software developers in SF, NYC, Austin, and other tech hubs to drive up prices, but this move will certainly drive down compensation. I have a hard time believing such a move would end up being good for workers.

If the scenario you're describing happens, some startups will appear and pay SWEs 160k/year to live wherever they want, and the good engineers will leave to work at those startups.

The fundamental problem (for the cost-cutting employer) is that good engineering orgs really do generate that much value.

This happened with the wage-collusion attempts in the valley. Facebook was willing to give more raises than Google or Apple. In the latest roll of the dice, AirBnB, Uber, Lyft, and friensd were willing to pay more. It's the cycle of business.

It's the rate the market dictates.

The thing is, if more people are remote, the market includes people -outside- of SV.

The market already included people outside of SV (big companies have many satellite offices). That hasn't depressed SV compensation because the best engineers cost a lot of money anywhere you look.

This is essentially the same as saying "the sky is blue because it just is"

But in the end it is reality. The question is who is actually in a position to be able to modify it? Because, this rate was reached by the cummulative effects of many many individuals optimizing their decisions for their own particular situation.