Would that be a bad thing, though? I mean, besides smaller number < big number, more purchasing power means smaller salary gives you a better standard of living. Or the same standard.
What I'd worry about is a scummy place like Facebook using this opportunity to lower people's standard of living under the context of readjusting cost of living equations. But overall, being paid less when you're in a cheaper area doesn't inherently bother me. Seems rational and better for everyone involved.
I think location based pay is reasonable, but I feel like actually cutting pay because someone started working remotely (which saves the company money by not needing office space and whatever other amenities in office employees get) isn't great.
Adjusting pay according to the local market in all cases is fair to everyone. We can't remain consistent if we make exceptions to the policy and allow someone to make greater than local competitive rate for the same work others in that region are doing (or will be hired to do). We realize we might lose a few good people over this pay policy, but being fair to all team members is not negotiable. It is a value we stand behind and take very seriously.
It intially feels wrong, and it is messy because large companies do affect the local pay that local industries are subject to. This doesn't eliminate the need for a well thought out policy though.
Another take is paying everyone the same number but their local currencies differ - thats not quite the same but is a good illustration imo.
Been using UNIX since the late 80s; Linux since the mid-90s; virtualization since the early 2000s and spent the past few years working in the cloud space.
Location
Alexandria, VA, USA
Education
B.S. Psychology from Pennsylvania State University
In any given job-region (i.e the total area described by the commute-radius from a given corporate work-center), there are expensive neighborhoods and cheaper neighborhoods. If they're not doing ZIP-by-ZIP adjustments then their "fairness" doctrine is a sham.
The work being done has a specific value. It's the value of the work that the pay should reflect, not whether one employee is more able to afford to take a lower compensation just because they live in a cheaper ZIPcode.
Fair cost of living-adjusted pay doesn't equate to living in whatever neighborhood you want, it is fair for the local region. Usually that is at the state level. To suggest that isn't fair enough because they aren't paying per-street corner is some type of disingenuous fallacy. You can be plenty fair with compensation without ZIP-by-ZIP adjustments.
I'll also add, work output value !== employee value. In a good fit, employee value > work output value.
Been using UNIX since the late 80s; Linux since the mid-90s; virtualization since the early 2000s and spent the past few years working in the cloud space.
Location
Alexandria, VA, USA
Education
B.S. Psychology from Pennsylvania State University
I live in the DC region. Within this region, there are several job-clusters with the average commute-radius for any given job-cluster of around the 25mi mark. If you placed a centroid at the Washington Monument to encompass most of the job-clusters and their average commute-radii, the overall average commute-radius is easily 45 miles (with some uber-commuters driving +60mi each way every day).
Using that 45mi radius circle, you're talking about an area of well over 6,000 square miles. even if you go with a more conservative radius, you're still over 3,000 square miles. Within whichever commute-area you wish to use, there are three different state-level jurisdictions. There are six county-level jurisdictions just within the inner-ring of suburbs. Even within a single, county-level economic territory, there are significant differences in cost of living that aren't accountable for simply by assuming "oh, you chose to live in an expensive neighborhood". Especially when you evaluate over time.
To illustrate, there's my case. Unlike many of my peers, I was conservative: I bought into a neighborhood that I was well within my "comfortably afford" envelope yet was still a sub 45-minute commute to the job-clusters I wanted to have access to. Between my 2002 purchase and the 2008 market-collapse, my house price more than doubled in value (and real estate taxes along with it). The post-collapse recovery means my initial purchase is now less than a third of its currently assessed value (which, again means my property taxes are 3x what they were when I first bought). Yet, four miles away — across a river as well as in a different state and county — a house of similar size and on a similarly-sized plot of land can be had for approximately half my current monthly outlay (though, at the time of my initial purchase, the delta was considerably lower). And while those arguing for the fairness of state- or region-wide pay-zones would say, "just move four miles," not only don't understand the economics of the region, they don't understand that moving four miles in that direction would add an average of 30 minutes to any existing commute (under normal traffic conditions). This is one of those areas where one measures commutes less by distance than by traffic-patterns.
So, no, greater-granularity in location-based salary-adjustments isn't a disingenuous argument if one is going to argue that it's reasonable for an employer to institute location-sensitive compensation.
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Would that be a bad thing, though? I mean, besides smaller number < big number, more purchasing power means smaller salary gives you a better standard of living. Or the same standard.
What I'd worry about is a scummy place like Facebook using this opportunity to lower people's standard of living under the context of readjusting cost of living equations. But overall, being paid less when you're in a cheaper area doesn't inherently bother me. Seems rational and better for everyone involved.
I was looking at Gitlab's reasoning, for example, and I can't argue against any of it - about.gitlab.com/handbook/total-re....
Edit: this coming from someone in northern Virginia where all the houses start at 800k.
I think location based pay is reasonable, but I feel like actually cutting pay because someone started working remotely (which saves the company money by not needing office space and whatever other amenities in office employees get) isn't great.
I agree with GitLab. Here's a nice excerpt.
It intially feels wrong, and it is messy because large companies do affect the local pay that local industries are subject to. This doesn't eliminate the need for a well thought out policy though.
Another take is paying everyone the same number but their local currencies differ - thats not quite the same but is a good illustration imo.
In any given job-region (i.e the total area described by the commute-radius from a given corporate work-center), there are expensive neighborhoods and cheaper neighborhoods. If they're not doing ZIP-by-ZIP adjustments then their "fairness" doctrine is a sham.
The work being done has a specific value. It's the value of the work that the pay should reflect, not whether one employee is more able to afford to take a lower compensation just because they live in a cheaper ZIPcode.
Fair cost of living-adjusted pay doesn't equate to living in whatever neighborhood you want, it is fair for the local region. Usually that is at the state level. To suggest that isn't fair enough because they aren't paying per-street corner is some type of disingenuous fallacy. You can be plenty fair with compensation without ZIP-by-ZIP adjustments.
I'll also add, work output value !== employee value. In a good fit, employee value > work output value.
I live in the DC region. Within this region, there are several job-clusters with the average commute-radius for any given job-cluster of around the 25mi mark. If you placed a centroid at the Washington Monument to encompass most of the job-clusters and their average commute-radii, the overall average commute-radius is easily 45 miles (with some uber-commuters driving +60mi each way every day).
Using that 45mi radius circle, you're talking about an area of well over 6,000 square miles. even if you go with a more conservative radius, you're still over 3,000 square miles. Within whichever commute-area you wish to use, there are three different state-level jurisdictions. There are six county-level jurisdictions just within the inner-ring of suburbs. Even within a single, county-level economic territory, there are significant differences in cost of living that aren't accountable for simply by assuming "oh, you chose to live in an expensive neighborhood". Especially when you evaluate over time.
To illustrate, there's my case. Unlike many of my peers, I was conservative: I bought into a neighborhood that I was well within my "comfortably afford" envelope yet was still a sub 45-minute commute to the job-clusters I wanted to have access to. Between my 2002 purchase and the 2008 market-collapse, my house price more than doubled in value (and real estate taxes along with it). The post-collapse recovery means my initial purchase is now less than a third of its currently assessed value (which, again means my property taxes are 3x what they were when I first bought). Yet, four miles away — across a river as well as in a different state and county — a house of similar size and on a similarly-sized plot of land can be had for approximately half my current monthly outlay (though, at the time of my initial purchase, the delta was considerably lower). And while those arguing for the fairness of state- or region-wide pay-zones would say, "just move four miles," not only don't understand the economics of the region, they don't understand that moving four miles in that direction would add an average of 30 minutes to any existing commute (under normal traffic conditions). This is one of those areas where one measures commutes less by distance than by traffic-patterns.
So, no, greater-granularity in location-based salary-adjustments isn't a disingenuous argument if one is going to argue that it's reasonable for an employer to institute location-sensitive compensation.