I don't see any problem with them paying someone in Canberra less than they pay an equivalent person in SF, but I think it's disingenuous to make it about "cost of living." Someone with kids and a mortgage has a much higher cost of living than someone without (in the same location) but do they automatically get paid more?
The local (tech) job market determines what the workers will accept, not (as others have noted) the cost of rent or beer.
Hopefully this equalizes out over time as more tech companies can properly adopt remote workers and thus even out the employment field away from centralizing in a few specific cities but we are a long way from that.
I used to think that way, but in, like, the late 90's/early 00's. "Surely as internet access and software tools continually improve, remote work will become better and more common, democratizing blah blah blah."
Instead, while the internet getting better definitely happened, the pay differential and clustering effect in major tech hubs only increased.
As for why that would happen, I have a few different thoughts, but I think the gist of it is that the internet getting better spawned huge internet giants like Google and Facebook, and organizationally it's still an advantage to have people colocated so they went with that.
Or, that’s where companies are and they’ll take what they can get in the area because they like having warm bodies in the office rather than dealing with better qualified remote workers (like practically every company)?
On the other hand, non-collocated teams are challenging and if you have very little experience running a team (as many young founders do) it might be wise to hire locally -- at least at the beginning. I think a lot of founders also probably underestimate the amount of time they'll need to get off the ground. So if they have $5M, it might seem OK to have a burn rate of $2M per year (I'm using pseudo-random numbers). They'll think, "If we can't get another big round in 2 1/2 years, then we might as well move on to something else". So they are willing to pay the money.
Not anymore, someone will be following the "locality doesn't matter mantra" and will outbid you. What you are saying might be more true for entry level or very generic skill sets. But if you are hiring top talent, you have to offer the same best offer everywhere, because if you won't then someone else will.
Only one of those two things correlates strongly with market wages, though. But you may be right that it may be more transparent to just say "cost of labor" rather than "cost of living".
Just say "we pay the local market rate where you live" and if that's true, you won't have any problem with your offers. If the developer in Canberra expects a Mountain View salary they will presumably explain to you why that's in your interest, and you can be convinced or not. Everyone else will be OK with the local market rate, because markets.
Publishing your "Canberra Disadvantage Index" doesn't seem likely to get you anything but people complaining on the Internet.
(Though I do wonder what GitLab would do if they find someone in Canberra they really want to hire and she already makes a San Francisco wage. My guess is they hire her and ask her to keep quiet about the salary.)
For starters, you'd have to be okay with living a lie to your coworkers and putting your career at risk if you ever let the facade slip. You can't ever talk about local events at the virtual water cooler. Do you live in the same time zone as one of the high-cost-of-living cities? If not, you can't ever mention what time your kids go to school either. Is your employer ever going to fly you out to conferences or all-hands meetings? They're either buying your plane ticket directly or expecting to see a receipt; good luck explaining why you never fly out of your "home" airport. Does your employer report your earnings to the IRS? If so, you'll likely be committing some sort of tax evasion or at least having to submit a ton of corrective paperwork each year. Do they provide insurance? You'll have to explain to the provider why your address isn't what your company thinks it is or else risk voiding your coverage and/or committing insurance fraud. And so on, and so forth.
All in all, it's probably doable, but very few people would consider it worth the effort unless they are pathologically inclined towards fraud in the first place.
Bear in mind though that, for example, in the UK there's a differential of 50% for living 1-2 hours' train ride out.
I don't even know if towns I've previously lived in and commuted into London from would be counted as "London" by their calculator.
Or you work remotely for a year at a lower salary, then leverage documented experience excelling at remote work to get hired in a higher paying remote role.
By this reasoning, you'd expect to find the most "valuable" baseball players in areas devoid of professional baseball teams.
Something tells me you didn't completely think this through.
Gitlab is willing to pay high salaries for people living in expensive areas for essentially the same reason Google's dev offices are mostly located in expensive areas.
Why? Scarcity is dependent on demand. Something that absolutely nobody wants will never be scarce, even if the quantities of said thing are small in absolute numbers.
If there is no professional baseball team, presumably nobody needs a professional baseball player, and thus professional baseball players won't be scarce at all, but rather infinitely abundant and pay will reflect that by trending towards zero.
Whereas, there are many more software companies that pay roughly the same wages all of the world, and companies offer remote work, which will reduce the differentiation - but not eliminate it.
> there are many more software companies that pay roughly the same wages all of the world
The jobs with the really high salaries (and arguably the most exciting coding jobs) are disproportionately located in a handful of major tech hubs.
I question whether there are many companies that, aside from executives or other high value employees, pay similar salaries around the world. I imagine at least some pay comparable salaries across the US--or at least salaries that don't completely follow CoL--but pay Indian or Chinese developers what they pay Bay Area ones? That seems unlikely at any scale.
It doesn’t hold a candle to a bunch of guys in a room at a physical whiteboard, for the sheer collaboration bandwidth. Fully-remote has its use cases, but it doesn’t cover all use cases.
The issue is that today the people with the desired talent level are likely to have already moved to a HCOL area because that's where the highest concentration of available work is. You have to compete with the other jobs they could take that are scaled to the HCOL area.
Turns out popuplation migration is not instantaneous, spherical, or frictionless.
Maybe compensation/bonuses/promotions are the proper way to reward those who have proven their added value.
No, cost of living does not imply hotter markets for software developers.
Vancouver, London, Hong Kong, Moscow are very expensive with not tons of devs, and devs are lower paid.
> Vancouver, London, Hong Kong, Moscow are very expensive with not tons of devs, and devs are lower paid.
True enough, but rent correlates with tech salary pretty well within the US at least, where I'm guessing most of their employees are.
That's not real leverage. Leverage is provided by the minimum salary demands of the cheapest alternative supplier of labor that provides an adequate substitute. That you can walk away from an offer isn't leverage if I have someone else I can hire for the same salary and get the same benefit from employing.
Location has no relevance (it may be that desirable skill correlates with location, but then paying for that doesn't require a separate location adjustment.)
Now, for on-premise worker a worker in a higher CoL area may have more leverage because the minimum demand substitute workers is higher, but that doesn't apply to remote work where the employer can hire people from elsewhere.
(please excuse my english)
Sure, the employer has more power in that negotiation, but it's not like there aren't others out there.
But... couldn't any dev easily just move to San Francisco? This isn't 1900; it's easy to move to a new city.
Maybe we should start a service that lets everyone receive mail in SF, so you can put a SF address on your resume.
I live on the east coast. My family lives within 30 minutes of me. My closest friends live within 30 minutes.
Moving would require leaving that behind. That's not (emotionally) easy for myself nor my family.
Depression is on the rise. Suicide is on the rise. We have all these "freedoms", society has made all this "progress" and our youth is sadder than ever. Explain? More divorces, more disconnected families, more violence. Offer your theory than the easy trope.
You might have your theories, I have mine. Doesn't make it horse shit and I stand by it, so unless you have something constructive to say, you can shove it up your ass.
Not all devs are in our..."tier" so to speak. They're not picking up full relocation packages or even a few grand upon signing to make the move easier. They'll need cash in hand to get a place.
Funding a move is hard enough as a new grad without many possessions.
It gets even harder (unless you keep sharp enough to get paid relo) to move as you add vehicles, maybe buy instead of rent a property, and gather stuff like furniture.
That's before factoring in how some people have social ties to their current town. SF is good for well-compensated mercenaries or the few lucky people that got to grow up there.
I find it ironic how you point out someone else as tone deaf elsewhere in this thread.
Is it expensive? Sure. But it's still pretty easy to move if you don't have a family tying you down. Moving anywhere is a pain, but people do it.
No, someone not already working at SF wages quite likely can't easily just move to SF.
I’ve seen companies that’ll reimburse all moving expenses, offer an upfront cash moving bonus, provide temporary furnished housing for the first couple months, and, if necessary, help handle immigration and other legal details. Sometimes companies even provide a moving consultant that the new hire can delegate tasks to like hiring a moving company or arranging for their childrens’ school transfer.
Janitors often make more than you think (both in terms of compensation and benefits), because while their job is easily replicated, they also require a great deal of trust.
I think this concept can extend across all jobs - you're not just paying for skill. If someone is dependable and trustworthy, it might be worth paying a small premium to keep them around versus an unknown quantity.
Every time an employee who might have stayed if that had a slightly higher wage, you run the risk of a toxic person coming in.
Government janitors, sure, because the government consistently pays above market-rate for low-skilled positions and under market-rate for high-skilled positions.
But in the private sector, I'd have to see some data. I'm not saying they all make minimum wage, but I don't think it's good money.
I can just move to London.
Pay differences across visa barriers might make some sense. Within a country it's just odd.
It's effectively saying 'go and live in London, or we'll pay you less'.
The barrier of entry to 'live in London' is about 6k a year for a flat share. Way less than GitLab's pay differential.
(It's actually kind of funny that a hack would be to subsidise someone living in London, have that registered as your address, and live in a place with a lower cost of living in a nice house.)
Well, guess I'm never working at GitLab now. Oops. :P
But it's more hassle, and it would mean giving up your current friend network, may be a burden on your family, like if you have kids, or your spouse already has a good job. Someone already in London doesn't have to deal with that. Ergo, they have more leverage.
I get a small flatshare and do the Mon-Fri working thing. (Loads of people do this for on prem jobs because homes in London are small and/or pricey. You get the train in on Mon, stay till Fri, and go home to your big country house).
Then I stop doing the commute because it's a remote job and this is obviously silly.
Basically it seems like this whole thing rests on arbitrary rules set for no reason.
I can't figure out how working for GitLab in a northern English town would work at all and why anyone would apply when they could rent a postbox (or even an entire flat) in London and come out way ahead.
If the differences were a few grand it'd be different. It's more like half the money for living a couple hours north on a train.
Employees are never only paid based on value. If that was the case, janitors would make great money, since having a clean work environment is very important and valuable.
What you're missing here is leverage. Janitors don't make much money because most people are capable of basic janitorial tasks, and thus they have little leverage in the job market because they could be easily replaced.
In the case of Gitlab, employees in hotter job markets have more leverage because they could more easily find a high paying job where they live. People living in weaker job markets don't have that. Gitlab is paying the former group more precisely because they have more options.