He neglected to include the selling side. "Everything is worth what it's seller will sell it for." And that in turn is often going to be dictated by what other offers are on the market for the same good. This is a big problem for sellers of software labor in Kansas City.

The problem for the hypothetical KC Googler is that there are substantially no other high paying tech jobs in KC. There's Cerner, but they pay seniors ~1/3rd what Google pays (and it seems to get further from Google comp as you go up the ladder). So if you want to negotiate with Google to increase your pay, you have no credible best alternative to a negotiated agreement (BATNA). If you want to work for any other high paying tech company, you have to leave town. Google, knowing they are the best game in town, would face less upward pressure on wages.

I mean, as a matter of simple fact, Google does not pay the same in different metros. Nor do any other large companies I'm aware of. The pay is adjusted to what is required to attract talent in those metros.

This is right: they and the rest of the FAANGs pay based on the local market.

On the other hand this means areas with lower costs of living but strong tech job markets can be a very good deal: Pittsburg is one people often bring up.

Boston isn't as cheap as Pittsburg, but it's far cheaper than the Bay Area with pay that's nearly as high. I'm very happy here.

If your money goes 2x further after the move, then you might be much better off even with a salary reduction. This means a move could be a win for both google and the employee.

Also, pegging your salary to corporate profits has its downsides. At Boeing, a good chunk of the worker bees negotiated their bonuses to be pegged to the quarterly profits. They were pretty unhappy about this when the 737MAX problems tanked profits, and the bonuses vanished.

I think profit sharing is totally awesome in all forms and losing bonuses when your business kills people is more than reasonable.

But anyway to me the math isn't about win/win but just supply and demand. If they can afford to pay it and were willing to before, it's not like you can't make the same amount (if not more) and have better future prospects without the stress and cost of moving.

I think a more realistic take would be a more decentralized approach to labor in general and allow many smaller satellites to pop up (which they already have) in many places and allow their people to move freely with minor salary adjustments. That way the costs and benefits even out in the long run, mass relocation to a single location probably isn't great for anyone involved long term.

Supply & demand is exactly about win/win. People don't wittingly make deals where they are worse off than if they decline the deal.

> They were pretty unhappy about this when the 737MAX problems tanked profits, and the bonuses vanished.

I have no doubt, likely more unhappy at lost bonuses than the fact they contributed directly to many lives being lost.