It's not about the actual numbers. It's the WHY. How come the company was ok to pay X when the employee was coming to the office, but now that the same employee is WFH (and thus may be saving some dosh) they are only entitled to 0.85*X? Presumably the said employee was producing a value of Y (where Y may have been > X). Has Y changed? If yes, then it's fair to do the reduction, but I doubt that is the case. It might be ok to lower the salaries of the new hires, but why punish the current employees?

Playing the devil's advocate here, why is it OK to pay a developer in India $3000/year when they could command $300,000/year in Silicon Valley?

Also, unless they joined within the last year, the current employees signed contracts obliging them to come to work 5 days a week. If they wish to permanently move to working from home in their pajamas for 5 days a week instead, the company is basically saying "Sure, but that will be a 15% paycut because we feel that makes you less valuable to us". You're welcome to disagree with the company's view, but it's not particularly "unfair" to me.

IMO, it's perfectly fair and fine if they want to take that approach

Likewise, if I'm looking at an offer for $350k total compensation from Company X, and $300k from Company Y because they think my time is less valuable when it's remote, I'll probably go with the higher pay

Indian engineers who could do a $300k job in the SF Bay Area aren't going to just hang out in India making $3k a year for long.. sooner or later they'll get a lot more of that value they're generating. "This lazy fucking American who fixes the bugs my tests find is making 100x as much money as me??"

It isn't OK and has always been wrong.

The value you produce is just the theoretical upper limit of how much you could get paid. If you could measure this value accurately, then it would make no sense to pay you more than that. It has little bearing on how much you actually get paid, that's based on the market rate.

They pay you less, because presumably by going remote you're changing the market in which you're based and your value in this new market is lower. They had to pay you, say, $200k before because otherwise they would never hire anyone if the other companies offered 200k. If you move remote, and your local companies/other remote options only pay 100k, they would be stupid to keep paying 200k. They can pay you 150k instead and still keep you. What are you going to do? Rage quit and join the 100k company in protest? Most people are not going to do that.

I see the argument that developers should be paid more because the company has some profit per employee that is a multiple of the employee’s wage.

From an employee perspective I understand how there would be room and desire to receive more money. However, I have a difficult time understanding why a company would want to pay more. Perhaps I’m a sucker, but in our engineering economics course we went over costs associated with projects. Typically when hiring on new employees to projects you want them to provide a return on the salary.

If the salary is increased to then absorb the profit the company makes on that employee, then there is no point of hiring the employee because the company isn’t getting anything from them anymore.

If a product line ends up breaking even, then companies look to see what can be done to reduce costs or increase prices. Why would employees be any different? What am I missing in these arguments?

There are a couple angles you argued that from. 1. In any for-profit company, it’s unreasonable to expect a margin of 0. Even if the company is worker-owned or something, you still want a (small) margin in order to build up a rainy-day fund so that the company can still operate during a future rough time.

2. I think you’re making the mistake of only measuring the things youth at are easiest to measure. If a company can bring “non-adversarial working agreement” to the bargaining table, that’s worth something to most people. In other words, a company which offers you frequent good raises without you having to fight for them is actually offering you good money PLUS giving you back all the time and effort you used to spend fighting political battles inside the company and keeping active on LinkedIn. Also as a result, you’re going to stay working there longer. Which also means they can amortize the cost of your ramp-up over a longer period of time. And look at that: the non-adversarial wages just “paid for themselves” from the company’s point of view.

But really: no employee wants their employer to be their adversary. And employers likewise gain from stable relationships with their employees, and even more so by crafting an environment that lets the employee focus on work instead of other concerns (like money or “fairness” or politics).

It depends on your POV. They could say when you were coming to the office they were paying you for the time lost for commuting, for having to pay higher rent, for having to deal with incompetent managers and constant interruptions in the open-plan office. Now that you don't have to deal with all these, they take away that bonus.

In any case, no matter what they say, the ability to WFH, either completely or partially, it's one of the very few good things that the pandemic brought. We need to protect this advancement in spite of the efforts of CEOs wondering why they bought monstrous campuses and how they are going to explain the sunk cost to the shareholders (hints: it's their problem, not ours).

I used to work in an office. Commuting for a total of 1.5hr a day to/from work. I was paid about $50 usd per hour ($8000 a month). When we went WFH bc of covid I saved about $200 a month in gas, $150 in food and $1500 (1.5x20x$50) in my time.

That was $1750 of $8000 which is more than 20%. My lifestyle changed way too much for the better. Once the CEO decided to get back to the office I searched for a new (remote) job and not only did I find it. They even gave me a raise

Employee salaries are mostly driven by market forces, and are barely affected by "value produced" alone. Companies will pay as low as employees will bear

And we can stop bearing

WFH isn't why gives you a pay cut. It's working from a cheaper location. Should you work from home within commute distance of your office, your pay wouldn't be affected. In that sense current employees aren't punished. They are taking a pay cut in exchange of a new option that wasn't present in their initial contract.

So everyone living in a city should have to move to a cheaper area because their pay was cut for no reason? If anything the company should be paying more, because they save money on office space which now the employee is covering.

That would happen if there's no pay cut. Why would I live in NYC, Hong Kong or London if I can get the same salary and live like a king in a cheaper country?

The pay cut will not apply to people working remotely in an expensive city (at least it doesn't in my company)

What makes you so sure that would happen? Many people like the city and have friends & family there. And for the company it makes zero difference if you work from some small town in Mississippi instead of NYC.

In my company working from home results in a small pay raise (2€ per day worked from home, it’s a small contribution to the home fees).

A pay cut is absolutely ridiculous, you can’t defend that. And 15%? That’s fucking outrageous. You need unions.

There's also the commute time factor and prepping for work (dressing, shaving, prepping work lunch, etc). If commuting + prepping takes 1.5 hours each day, then eliminating that would save you ~375 hours per year, equivalent to ~18% of your hours worked.

I wish my employer would give me the option of remote, even if it did come with a paycut.

> I'm surprised so many people are so angry about the pay cut.

I think that's because many people think (rightly so, IMHO) that this is just exploitation by companies that sense they can squeeze a bit more out of employees because employees will likely accept (partly for the reason you mention).

A pay cut makes a lot of sense. Without it you're less competitive. I currently work for a decent size US company from Ballynowhere in the middle of Ireland and I'm a lot more competitive in part because my cost of living is roughly €0. Meanwhile someone in SF needs $150k just to keep the lights on.