> But if a company is fully remote, why should it adjust for costs of living at all? Candidate A lives in an expensive place and Candidate B has an expensive hobby. Neither is the company's concern, is it? The bottom line is that each is worth $X to the company and wants $Y in compensation.

Because if it wants to hire workers that live in SF, it has to pay SF wages. It doesn't have to pay SF wages to workers living in Tulsa.

Think about it flipped around a bit. Let's say that instead of hiring employees, you're buying candy bars. Someone running a bodega in NYC isn't gonna give you a discount just because you're going to have the candy bar mailed to Oklahoma.

The bottom line is not the $X value and the $Y compensation. It's a lot more complicated than that. Just like the company's bargaining position is a complex mixture of the value that different employees provide and the opportunity cost of leaving a position unfilled, the employee's bargaining position is affected by the salary the company is willing to provide and the opportunity cost of accepting this job offer instead of another.

> It doesn't have to pay SF wages to workers living in Tulsa.

Not yet. When Tulsa engineers wake up to their value, they hold the cards.

I’ve been on the hiring side for good senior engineers. They’re hard to hire, period.

They take a ton of time to properly screen and by the end of the interview process, the company has wasted so many resources that could have been used for development if they don’t land that person.

I work for a company based in a major west coast city from a non-major city in the southeast. My employer has different buckets it puts cities in and then limits your base pay based on those buckets. Even with that limitation, my compensation is much higher than what I would make at a local company but not the rate I would get in a 'premium' market.

The most impactful benefit for me is I get to work on $big_city problems with $big_city talent. $Small_town problems and the $small_town talent are mind-numbing and deeply frustrating to work with

Strangely, you could be getting paid from the premium bucket. They have that budget. It’s there. You provide the same value as Adam from SF.

Why not you?

Short reason is because the market is driven not only by what value you provide, but how strong your negotiating position is.

As an analogy, imagine someone from NYC traveling to Mexico City to get tacos from a cart on the street at 9 pesos a pop (about 50¢ US). Those tacos are better than the tacos in New York, so why aren’t they paying $4 each?

The market is / will be self-balancing in this case. If companies can't hire people they'll have to come up with more than you're offering. If you're unemployed, you'll have to accept less than you're asking.