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).
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.